Bitcoin Forum

Liquidation is something I fear the most in my trading history, because no matter how sure you are about a trade, the market can decide to go otherwise. If you've only set a take-profit (TP) without setting a stop-loss (SL), you'll surely face liquidation at the end of the day.
A seasoned trader once said it's better to hit your SL than to liquidate, because you'll have something to fall back on to recover your losses.

A word of caution is enough for the wise. I'm sharing this because of a close friend who saw me trading a few days ago and thought it was easy after watching some YouTube videos. He bought XRP futures and lost up to $1,000. Ironically, he later came to confess to me, which was already too late, as his overconfidence had led him to neglect setting an SL. I helped him fight for liquidation protection, and he managed to get $100 back here (https://www.bitget.com/events/activities/263f959a23f951eaa33a75745bfe309f?color=black) due to his larger trading volumes.
Now, he's back to learn from me. What advice should I give him?

Always put stop losses and take profit that is the real answer, the real enemy is your emotion. If you can control of yourself you can win that is why in trade there is a term called fear and greed. You fear when minus is coming to your PNL but sometimes we greed when our PNL is green.

If there is an option stop loss over liquidation the best option is always to choose stop loss

In trading stop loss is marketed as the insurance.
Buuuuut it fails, in situations of volume de or revaluation stop loss can let you loose.

https://www.thestockdork.com/common-stop-loss-mistakes-traders-make/

Never too get confidence that a market will not reverse even if your analysis plays out well for you. Hitting SL is far more better than liquidation and it’ll help you to have some hope that you can get what you’ve lost back by relying on your remaining balance to risk gradually again. Not setting an SL is the quickest way to liquidation, so as a newbie or professional trader, setting an SL in all trades should be a necessity and not a choice. When you’ve learnt from your loss and have no more capital to fall back on and trade, it can easily kill your morale to trade at that time. While you may still have money to fund again, practice proper risk management in order not to get liquidated at anytime in the market.

It is too careless if futures traders do not set stop-lose because we know market movements are difficult to predict, therefore people who are too reckless with SL have ignored their risks.

I've seen in X and this was widely reported if I'm not mistaken he was liquidated $1M when he was sleeping, because he forgot to set a stop-lose.
Futures trading is most avoided by me because I know the risk is so great that I don't want to not bear it.

Fear and greed is definitely a good indicator, I have always seen it work perfectly so far. Stop loss is one that I would agree, but take profit isn't one that I would fully agree with. I can see why that would feel the same way, but I hope that it would not be all that same. In the sense that if you do stop loss, then you avoid losing money and that is all what we should achieve here, just not lose money as long as we do not lose money, we are doing fine.

On the other hand, if we could just "not make profit" that is fine, it is not the same thing, because take profit makes you try to take your profit as early as you can, but without it, you still could just use stop loss and avoid losing. And that way you can wait for it to grow further than your take profit number and make even more money.

If you are not a professional traders yet, I do recommend we avoid future trading, because we can easily lose our money there compare to spot trading. If you are in  spot trading, if a coin dumps, if you can just hold, then with time the coin will bounce back if you are holding a strong coin, but when it comes to future trading, if the market goes against you, instead of you to hold and wait till it bounce back, if the price hits the liquidation price, then you will be losing everything.

Stop loss is really important if you are in market, and you are not really active online to monitor the market, at least if the market goes against you, it’s going to reduce the amount which you will be losing, instead of you losing all your money. It’s better to lose maybe 5-10 percent of your capital instead of losing everything, so stop loss it’s really a nice idea, but not everyone likes making use of it.

Am not the type that really involve myself in future trading, because have really learnt a lot, and have lost so much money in future trading, but now I only focus on spot trading, and I think that’s just better for me. You can easily make so much profits in future trading, if you make use of high leverage, but the risk also is too high, you can easily lose your money.

This means you have been trading just altcoins is what I am thinking and that you are not trading bitcoin. Or you are using a very high leverage if it is bitcoin that you are trading. High leverage is not necessary for altcoins to liquidate you because thet can go 2x at anytime. Just gamble with them those highly volatile altcoins.

Obviously if you like to trade with leverage then it’s best to use a stop loss. I really don’t advise leverage trading though, I think it’s fuelled by greed & impatience. The best way to make money in crypto is buying regularly, hold for multiple years. Sell bull cycle tops & bull bear market lows (as close as you can). It’s a game where you need patience but you are far less likely to lose money like with leverage trading.

Firstly, I am actually not the person as you have seen there and I believe that as a novice that he is, he was thinking that high leverage will make him alot of money which later backfire

Don't let yourself get liquidated and don't think its normal scenario in trading since if you have that mindset to win or lose everything then you might suffer from lots of issues on your trade.

So better set stop loss so that you can possibly minimize the damage you got especially if the market falls. Also don't ever think about its easy to earn money on trading and don't be so greedy trying to hit huge gain because sometimes those wrong expectation would provably put us on huge troubles.  Also better learn more about future trading and don't go there if you don't have enough knowledge since that trading option is so risky.

Getting liquidated then this would really be that only pertaining to those who do made out some futures trades but we do know or i have been able to experience those countless times into those trades on which it do give out that almost hitting up that liquidation price but ended up on having that rejection on which the trade did go through on what i have analyzed or predicted. This is where some traders really that being not wanting to close up their positions and would really be wanting to hit up those liquidation rather than on making themselves having that to those stop loses. It will really be that something situational because each trader does have their own approach and actions to be made on which this will really be that particularly be basing up into the current situation that they are really that getting involved with. Adjustments and outright decisions will really be the key.

If you arent that good when it comes to spot trading then never ever make yourself trying out to deal with futures trading. Some saying that futures is like gambling on which i could partly agree on this one. If you dont really know on what you are really that doing then it will really be better that you should really be that making yourself that learn up first about the basics. Try to be that sustainable at least then you would really be having the idea on what you should gonna do at the time or moment that you do touch up this unpredictable space.

I’m quite surprised, i mean no matter how much money a trader has stop-loss should be in the first measure to set in case the trade goes south. It can only be forgotten if the trader is a newbie.

I’m sure this is the reason Bitget organized an opportunity for new traders to be protected from liquidation because it’s certain new traders get liquidated the most. Though i’ve seen professional traders also make this mistake due to emotions. To avoid loss in crypto, one has to be very careful when emotions want to creep in.

Te challenges many people that called themselves traders are facing in the market is because of greed.
Greed has made so many traders that don't want to use risk management in trading lose most of their funds which they might not be aware about. Such kind of trading is known as gambling. So many traders are gambling thinking they are actually trading in the market.
For us to trade successfully in the market, we need to make sure that we trade with risk management which involves using stop loses, take profits and others to make money from the market.

Risk management is key in trading, and your friend’s experience proves it. The best advice? Always set both stop-loss and take-profit levels—that’s the real key to staying in the game. Teach him proper risk control, position sizing, and the importance of discipline. Trading isn’t just about making profits; it’s about protecting your capital to trade another day.

Start small and avoid futures.
That's the best tip that you can give to your friend if he has no idea of what he's doing. Learning from YouTube videos are fine but that's not enough for futures trading. It's a combination of many factors and experience will tell more for that friend of yours. That's why even if the others are lurking here, you shouldn't get into futures with that $1k. That's a huge amount to lose unless you're prince of saudi or sort of royalty where you are or simply rich.

Before opening a trade, it's mandatory to setup a SL and TP because they're the features to depend when trade are either going your direction or against it. We can keep complaining but that doesn't stop the fact that we need more time to be sitting round the table with smiling faces and hopeful for the market.

Liquidation is the worst thing that can happen to anyone in the market. OP you have already answered that particular question yourself. There's nothing more to give him other than guiding him on the right track, we know how broad the market have become and there's not a chance we should become reluctant. He should always setup SL if he's craving to learn more things about the market.

You can always set up an isolated margin account and if it gets liquidated you won't lose all your money.

the problem with liquidation that I faced is that sometime exchange force liquidation when the margin was supposed still able to mantain the position to certain extent for some reason, maybe because fee or whatever it is, I don't know but with SL
it's more accurate and there's no such thing unfair trade like that.

Historically it is better to touch SL than to be liquidated but it's just that when we trade and always set SL we will continue to touch it and after that our desire for TP is achieved but it's useless if it has touched SL, I myself am also quite annoyed if I have to set SL but only touch it not really reversing direction. But now I have a little understanding of how not to continue to experience losses, for example with capital (min $ 200) but setting a small price (max $ 15) and leverage is not too high (max 10x) that is quite far from liquidity and I have applied this even though sometimes the price reverses direction but I'm not too worried because the price is likely to return to its original state and receive profit but we also have to be patient waiting until the desired price is reached, yes even though the profit is not too big but it is enough to secure the mentality so as not to be too anxious when trading futures.

To your last question, he should be patient really. No rush, always use stop loss and always wait for his preferred entry before taking a trade. Now tell me about this liquidation protection you talked about. How does that work??

You know his flaws and like you said, you have strengthened him up for good trading indications and strategic trading of taking profits accountabilities and as well setting up the stop lost bots.
You did not talk about his financial management which could had been one major problem for him but ideally, he should not just trade on any listed crypto coins as due to variabilities of liquidations, he might just get tied of stocking useless coins.
He should be contented with any small profit but in a continues pace he would make it huge.

When you are trading you need to try not to be greedy because when you are to greedy there will be some kind of consequences that it comes with because it is not as if some people don't know what stop loss is or how to use it, they just deliberately seem not to care and if they don't do leveraging they might have the chance of making more money. They don't consider the risk that it comes with high risk of liquidation, people really are very funny, you don't want to be liquidated but you don't want to also do the right thing and this is why some times I don't actually pity when most of this traders are liquidated because obviously they know what to do and they did not pay attention to it and now they are regretting, if you are a beginner you will need to have learn to be patient because we know how careless we can be sometimes,  it will be better to just put all the important measures in place so that you don't  get liquidated. The more you trade the better you get at it.

After some people watch videos on YouTube, and they give it a trial and they win, they will start thinking they are already professional traders, until trading humbles them. You can only learn basics on YouTube, before you understand trading better, then you will have to put it into practice, and constant learning.

As a beginner, why will you even start with future trading? Or why will you even start trading with so much amount of money? As a beginner, you should start with spot trading, if you keep on understanding the system, then you can decide to start trading futures also, but some professional traders doesn’t involve themselves in future trading because of the risk involve in it.

Making use of stop loss is really nice, but not everyone prefers making use of it, some people prefer they monitor the market themselves, because some do complain that after the stop loss have been hit, the market do always bounce back, so they don’t make use of it.

Yeah, you will take risks you shouldn't, act as if you want more when you can't have it and overall will want more and more, never satisfied, reaching to an unrealistic expectation from the market. Like if you put 1k in, at x150 leverage, and hope to make 150k, there is zero joke that you could actually make that if you are correct and it goes your way.

However, if you do it again, but this time put 150k in, to make more, then you could lose it all. That is greed and as long as people do this kind of stupid moves, they are going to end up losing a lot of money and they won't be making any decent income. We need to realize these are difficult periods and it is not going to be easy if you are not careful with it.

I don't see anything wrong with what you say that you should always remember to set SL when setting TP, because it's also true that if you only set TP, the chances of being liquidated quickly are still high if the analysis you did for the asset you chose is contrary to your setup.

And in my opinion, the majority of traders here in the crypto space know that, because others are too complacent that they are doing the right thing when placing positions so they only place
TP but when the trend suddenly changes, they just hold their heads in their hands because they are liquidated immediately.

I assume this is about futures trading, right? If you want to manage your risks, then it is best to use stop loss. If you just put a long position with just take profit and do nothing to prevent any catastrophic losses, then you are not trading. All you are doing that is gambling with the hope that the price will never fall below a specific amount and that it will keep on rising. But this is not true. Any unexpected fluctuation in the market can cause the price to dip significantly for few seconds and this dip will cause you to get liquidated and this is what happens most of the time. Its best to have something left than nothing at all. You invest $100k  and you are losing money. At that moment being able to save even $10k would feel less depressing.

All of us who trading are familiar with Stop Loss. Every trader uses stop loss. The importance of stop loss in trading is immense. If the stop loss is correctly saved. Then there can be a lot of safety. Exposure of training no longer without Star Plus can increase a lot and bad situation for him can get worse. I think that the trading system should be part of the stock loss. In this way a trader’s loss can limit its loss if the market goes in opposite direction. And you always need to take any decision seriously and the amount of risk you can take will depend on you who should be careful about unexpected events. What you take and what the expected reward with him should be fixed from before this ratio will help when making his decision. Additional self-confidence can cause own damage so every trade has the right analysis and preparation to take place so that unexpected events do not happen.

Stop loss is very important in trading and I’m so surprised to come across people that don’t really fancy putting stop loss on their trades, they believe in their analysis so much and they believe it’ll never hit the zone that the stop loss was set to be. The market is very unpredictable and you can’t be so sure that your analysis will go well as we all trade base on probabilities and not certainties. A world of advise for newbies and upcoming traders, stop loss is very important in your trades as it gives you the privilege to get to trade again while learning to avert from your previous mistakes when taking another trade. It is better to hit your stop loss and not liquidate and I also believe in the the theory that it’s better to miss entry than to hit stop loss in a trade. All this is to avoid liquidation.

There are so many trades that had been liquidated over time because traders were so confident about the pairs they are trading.
Most traders problem is over confidence and we should always try to use stop loss because that is the only way we could safe our trading portfolio from crashing out.

There are so many whales that are manipulating the market and we need to know what we are doing so we don't finally lose all funds because of the mistake of not using stop losses. Those who have had bad experienced of their trades been liquidated because of lack of using stop losses and analyzing the market thoroughly before trading would understand how painful it could be to lose almost your entire bankroll.

That's nice if he is tired on those useless coins. They are useless anyways but there are also useless coins ( meme coins for instance ) that still can pump sometimes but of course, those coins with utility are still much better than them. Small but continuous profit sounds nice to you and me but not for others. For them it is better to earn huge even if it's rare to occur.

As long as they are not losing, I think there is no problem with that. Not all cryptos are legit or good in quality despite being listed, so yeah that we should not try and trade each of them. He already know his friends flaws, so this should include knowing how his friend manage his finances.

The rate at which people lose money to future trading is alarming especially now that the market is choppy and they aren't moving well. I'm very sure that your friend doesn't know how to trade properly, I will rather lose some dollars to stop loss than lose everything to liquidation, you can never go wrong with stop loss unless if there is high volatility of that coin and I mean if the price spike up and down and then return to where it was trading.

I was enjoying futures when Bitcoin price was going up but one thing I never did was using high leverage, that way I don't use stop loss only if I'm sure the market price will quickly go back to where it's trading and I don't trade all coins, I'm very reserve with Bitcoin most of the time, XRP is just that coin that is all about insider doing their lobby to move the price and after a while, you will see the price going down again, not good to bet on such coins on future.

If someone expects 10% profit from his investment from spot trading, then he gets 100% from future trading and sets TP accordingly. Because most traders use futures trading like gambling due to which his entire investment is at high risk. The higher the leverage he takes, the faster his TP and liquidation will hit. In futures trading, most traders set TP but do not set SL. This leads to more liquidations. Futures trading allows you to accept risks and losses like a gambler. So SL is not used much here. Most traders are overconfident here and instead leave their profits to their luck.