Liquidation and Leverage Issues

Man, this week has been rough in the market with prices taking a hit. Honestly, I think it might be a decent time to buy. From what I’ve seen, it’s a good strategy for buyers to scoop up assets when they’re cheap and just hold on. But ya know, that’s mainly for the traders. As much as low prices can be great, it’s good because things are cheaper and they will probably go back up eventually... but who knows for sure. The downturn seems to be driven by leverage liquidation, though. Some traders take out loans to pump up their trading positions. In the end, it can go either way: profit or loss. And whatever happens really impacts the market. So my question is, should we keep allowing leverage liquidation, or is it better to discourage it?

I don't support future trading or using leverages. It's quite risky in my book and could lead to net losses I still believe buying and holding is the best Barely requires any skill at part from protecting your asset. I have heard of people making it big in trading, but I'm sure majority should be from Spot trading. #HODL

Bitcoin just got to $106000. After the DeepSeek that caused downtrend, the market is back up. Just do not trade with leverage to avoid liquidation.

Yes crypto future trading is quite risky thats why we can pick the options we wanted to do our trading strategy. Spot trading is more good and much less riskier. Doing some holding can also ease tension and stress. I think that future are for those can manage their risk cause the percentage of winning is just the same on losing. So if you really not careful you could burn in this.

If you are still a less experienced trader, going into leverage trading is such a risky move. You could have end up losing all your funds in just a single trade, and fall into liquidation. Trade but never be greedy. Otherwise, if you rush into forcing yourself to make huge returns from trading, you will only regret in the end and even leave you drown into debt. Trading with leverage is good, but know that not everyone is capable to make it profitable from leverage trading. Focus on hodling instead.

Trading is a game of profit and loss, it's not something that someone that don't adequate skill or knowledge will think of going into. Considering the risk involve in trading I don't it's a wise decision for some to take a loan because of trading. Although, the price of Bitcoin have appreciated above $100k but instead of trading I think that the best way to invest in Bitcoin is to leverage the opportunity when the price depreciate and buy then hold it for long term for future profit when the price appreciate.

What usually happens in the market is a chain reaction. Now we all know that the markets are to move in any direction depending on what might have happened. It could have been just a correction after a recent uptrend or even new just like that DeepSeek AI news triggered a downtrend. The downtrend then triggers spot market stop losses, stop losses for long positions, and also some liquidations for other long positions that didn't have any stop loss. All those 3 triggers make the market to drop down further as the bidding side of orderbooks gets wipped out in a short time until the market stabilizes. So where you keep your position open or not depends on your risk management strategy, your liquidation price, funding fee rates for the contract you are trading etc.

that's just the usual risk with leverage trading sometime the market chase after the biggest liquidation point, what you can do in a nutshell isn't opening a leveraged position and having your liquidation point at that pain point where the market can chase your liquidation. other than that you can simply trade with no leverage, there's reason why majority of people trade on spot because they don't need to think about getting liquidated at the expense of having lower profit of course, but it's still better than seeing your position get liquidated only for the market to recover 10 second later. future trading is risky and if you insist on trading with leverage, you should just use small amount of money as a margin.

It's a product from exchanges, and if people don't have demand to use that product, it will naturally die with time. Now, you can think of whether people have demand to use leverages for their trading positions. I can say there is huge demand from cryptocurrency traders, and this leverage trading products won't die. Exchanges don't stupidly shut down a product that is money making for their business. You can see high demand and part of it was liquidated with this chart. https://www.coinglass.com/pro/futures/Liquidations

You know, if you enter these categories, you should really be prepared for the amount you can lose, especially if you know to yourself that your knowledge in trading is not that extensive. If those experts are considered to still lose in the end and are often liquidated, they still encounter us, so we don't have enough knowledge, right? So if you want to be safe, go to the spot or just hold for now.

When did 5% downturn become brutal in crypto lol I mean, we're all back at above 1k and looking to make new heights or break resistance, wait til you see 10% drop in a day, 3 days in a row. Its crypto, its normal Stops are there for a reason sure, but if you're doing leverage even at 10x then your 5% stop loss becomes almost impossible to maintain in crypto. Hence the 100x leverage guys I never get

These are the mistakes traders make actually. I wouldn't even start my position with more than 20% of my total portfolio because I cannot lose them all. However, some people invest their 100% portfolio and even take loans to increase their position size. This is a dumb decision, to be honest. No trading is 100% safe. So, how do people actually take the risk to invest their 100% portfolio in a single trade? A trader should invest 10% of his portfolio in a trade. In case he loses one, he could recover that loss with his remaining 90% portfolio. There is a possibility of losing trade multiple times in a row. Considering this, they should not open a position with more than 10% of their portfolio.

This trading behavior is most often characteristic of beginners who, having no knowledge of trading, try to trade like in a casino. And sometimes they get lucky and make a good profit, but fortune can't always be there and they end up losing their deposit anyway.

When the market candles are down immediately, the trader has nothing to do, everything is so miserable that it ends. However, last week, the Bitcoin market went down several times and other coins were completely red lights in the market. However, in that case, the person just watched his money shrink and did nothing to reverse it.

Absolutely, it just starts with one move and the market starts bubbling and rocking. High level of expertise is really needed to pull through.

too much insider game for a future trading to actually work indeed, the fact that there's always flash dump at one point means we're just gonna get liquidated by these flash dump basically losing for nothing. at this point, the risk outweight the potential profit for me that I just never really touched future trading nowadays, not to mention market is more turbulence than ever. but if OP insist, he can use 2x and limit to 2x, nobody is chasing after 2x leverage liquidation because it's not profitable.

It's a basic thing for a trader. Every trader knows that they have risk of losing their trade. No one can make a profit from every position they open. If someone goes all in knowing the risk of losing their money, then they are dumb. Even some people take loans to do this dumb thing. I cannot imagine myself there and not even my friends. If I ever know one of my friends doing this, I will have to talk to him. Trading is not entirely gambling even though there are some similarities. So, one should trade knowing that they can lose their trade and should not go for all in. Forget about taking a loan to increase the size.

Major incidents causes downtrend in the market so much, Ukraine war and Corona virus outbreak had major impact on the market too as well. Truth be told, every dip creates an opportunity for an experience investors to purchase and accumulate more, as that's a distinct tactics to follow. That's not what actually affects the market tho, if it's that then the market will be down everyday.

You are right to an extent that holding is a lot more easier than trading futures, and it's the best way for newbies investors, and  even some veterans to make money in the crypto market, but holding the wrong asset like most of this altcoins and memecoins can equally be as risky as trading futures, just take a look at what is happening in the market today, by abs large it is only bitcoin, and then to an extent enthereum, BnB, Solana and optimism that are quite trustworthy. While the rest has practically plummet in value because bitcoin fell from $105k to $102k, so even holding the wrong asset can be as risky as futures trading. But if you are actually skilled in the craft, your financial status can change forever, because you can actually make a whole lot of money in a very short period of time in futures trading but definitely not advisable for newbies.

You can use any correction to increase the number of coins in your wallet, but it will only be right if the market grows again after that. But you should be prepared for the fact that you will buy coins again, and the market will continue to fall, as this is not a correction, but the beginning of a bearish trend.