The Truth Behind ETH Liquidation: Why Even Smart Traders Fall into Traps

Recently, I watched a live stream by a well-known trader in the square and listened to a case sharing about a liquidation event. The story behind it is worth deep reflection. This trader, during his second large position long (habitually rolling his position), should have made a profit but ended up losing money. The problem wasn’t his trading skills but a fatal mistake: blindly trusting a “100% win rate” whale holding position. Since the whale didn’t close its position, he kept holding and didn’t cut losses, ultimately leading to liquidation.

The psychology behind this case is worth studying. Why would a seemingly rational trader lose judgment under the influence of a whale’s demonstration? This highlights three common traps in trading markets that are often overlooked.

External Data Should Not Be Your Trading Guide

Many traders closely follow news, macroeconomic data, and US stock trends, as if this information determines victory or defeat. In reality, these are just references; glancing at them is enough. To be blunt, not looking at them has little impact—your actual trading decisions should rely on your own judgment.

News and macro data can create an illusion: that you hold the market’s pulse with this information. But markets rarely follow a script. Traders blindly following external signals will ultimately be taught a lesson by the market.

KOLs and Whales Are Learning Resources, Not Trading Guides

This is the easiest trap to fall into. Many beginners see a KOL succeed in a few trades and worship them; if they lose a few trades, they completely dismiss them. This way of judging is inherently dangerous.

Deeper down, most KOLs lack genuine logic and methodology. Even if some of their analysis looks good, they tend to indulge in “expectation building”—using subjective emotions to guide market expectations rather than basing decisions on objective chart movements.

What is the correct approach? Learn the analysis logic and methods of KOLs, then judge whether these methods suit you. Absorb what fits, discard what doesn’t. As for whale holdings? They do influence the market, but they shouldn’t be the reason for your position. Whether whales close or not is their choice; your decision must be based on your own plan.

Technical Analysis Is the Fortress of Trading

Finally, and most importantly: Successful trading ultimately depends on your technical analysis.

Trade based on your own logic and close positions according to your signals. What are the benefits? Even if you lose, you can review and understand where you went wrong and how to improve. This feedback loop keeps your thinking coherent, and repeated iterations bring you closer to consistent profits.

In contrast, blindly following others’ trades is of little significance even if you win. Why? Because you don’t understand the core logic. Winning is luck; losing is the tuition fee. Only trading based on your own judgment can reinforce your methods when you win and help you improve your system when you lose.

The road of trading is long, and ultimately, the winners will be those who have independent judgment and the ability to think independently.