How to Avoid Liquidation With Small Capital (Simple Guide)

đŸ”„ 1. Use Low Leverage (1x–5x only)

With small capital, high leverage = instant liquidation.

Low leverage gives your trade more breathing room and protects your entry during volatility.

👉 Rule: Never use 20x–50x with a $10–$200 account.

đŸ”„ 2. Always Set a Stop-Loss

No stop-loss = guaranteed liquidation in volatility.

A stop-loss closes your trade early so your full capital isn’t wiped out.

✔ Ideal SL distance: 1–3% for spot style, 5–10% for futures

✔ Never move SL further away hoping it will recover.

đŸ”„ 3. Don’t Enter During High Volatility

Avoid entering during:

News releases

Big pumps

Sudden dumps

After a huge candle

Wait for pullbacks, because entering at the top is the fastest way to get liquidated.

đŸ”„ 4. Size Your Position Correctly

Small capital should not use full money per trade.

✔ Use 10–30% of your balance per trade.

This allows you to survive losing trades without going to zero.

Example:

Balance = $100 → Trade with $10–$30 only.

đŸ”„ 5. Use Cross Margin Carefully (or Avoid It)

With small capital, isolated margin is safer because:

Losses stay inside that single trade

Your full balance won’t get drained

Cross margin can wipe everything if one trade goes wrong.

đŸ”„ 6. Choose High-Liquidity Coins

Avoid low-volume coins that pump/dump 10–20% quickly.

Best coins for small-cap futures trading:

BTC

ETH

BNB

SOL

These move more smoothly and avoid sudden liquidation wicks.

đŸ”„ 7. Avoid Emotional Revenge Trades

Emotional trading increases:

Over-leverage

Over-sized trades

Over-trading

All of which cause liquidation.

If you lose → Take break → Reset.

đŸ”„ 8. Plan Entry, SL, TP Before Entering

Don’t enter blindly.

Before entering, decide:

Entry level

Stop-loss

Target profit

Risk %

Small accounts grow by precision, not by gambling.

đŸ”„ 9. Wait for the Best Setup (Not Every Move)

Trade only strong setups:

Break + retest

Support bounce

Trend continuation

Reversal confirmation