Remember the feeling when you first started trading contracts—looking at the screen with 100x leverage options, your mind filled with dreams of getting rich overnight, not taking the risks seriously. It wasn't until later that I realized the market gave me a lifelong lesson in just 15 minutes.

At that time, I had 8,000 USDT in capital, and my mind was full of crooked ideas. To me, 100x leverage wasn't a risk bomb but a "shortcut" to financial freedom. But reality was cruel—just a slight market fluctuation, and 4,000 USDT disappeared out of thin air. Staring at those glaring red numbers on the screen, I suddenly woke up: liquidation is never about bad luck, but about a lack of respect for the market.

After that, I completely changed. No longer relying on feelings to chase gains or cut losses, I started spending time studying how the market operates. Gradually, I understood that contract trading is like a double-edged sword—it can make money or cut leeks, depending on whether you can control the risks.

**Where is the root cause of liquidation?**

Over the years, I've seen too many people fall into traps. After careful observation, liquidations usually boil down to a few common issues.

The first is improper use of leverage. Beginners are especially prone to this mistake, always thinking that high leverage is the key to quick turnaround. Little do they know, with 10x leverage, a 10% adverse price movement can wipe out your position. The principle is simple—the higher the leverage, the smaller the price fluctuation needed to trigger liquidation.

The second is over-allocating position size. Some people go all-in right from the start, holding a "bet it all" mentality and throwing everything in. The consequence is that once the market moves against them, they have no chance to adjust. Cryptocurrency markets are inherently volatile, and this approach is no different from going all-in at a roulette table.

The third—and perhaps the most common—is not setting a stop-loss. When losing money, many choose to hold on stubbornly, hoping the price will rebound, but end up with small losses turning into liquidation. Emotions cloud judgment, and in the end, situations that could have been saved are lost.