Why do contracts always get liquidated? Basically, it's because leverage is used too aggressively. Looking at the losing traders in the market, nine out of ten open positions with too high a multiple, then get wiped out by waves of volatility.

What is the correct way to trade? First, manage your leverage well. Beginners should never start with 10x or 20x leverage—that's digging your own grave. A safer starting point is 2 to 5x, and for mainstream coins like BTC and ETH, don't exceed 10x. For more volatile coins, you need to be even more restrained—3 to 5x is enough. Why? It's simple—lower leverage gives you buffer space. With 3x leverage, the price needs to move 33% in the opposite direction to be liquidated, but with 10x? A 10% move is enough to force liquidation. Think about how big that difference is.

Managing leverage alone isn't enough; position sizing is the second line of defense. Each trade shouldn't exceed 5% to 10% of your total funds. This way, even if you lose, your principal isn't hurt. Here's a simple formula: if your account has $10,000, set the maximum loss per trade at $200 (2%), then work backwards to determine how much to open. Don't find it troublesome—developing this habit naturally reduces risk. There's also an advanced technique called scaling into positions, for example, opening 30% first, then adding gradually as the trend confirms. This way, you don't put all your chips at risk at once.

In actual trading, you must also consider technical analysis. Set stop-loss orders below key support or resistance levels, such as the recent low points during volatile swings. Profit-taking should focus on risk-reward ratio; the potential reward of each trade should be at least three times the risk. For example, when going long on BTC, place the stop-loss 50 points below the recent low, and set the take-profit at three times the stop-loss distance upward.

One last detail: never trade during low liquidity periods, such as midnight or weekends. These times are prone to market manipulation, frequent "stop hunts," and novice traders are easily caught off guard.