it is very important to be most careful while day trading when volatility is high, just as it has been in a few days now, this is specially for those who trade the futures market, trading futures is 10x more risky than trading spot, in futures trading, a simple miscalculation or failure to use proper risk management could lead to you being liquidated and all the money invested gone in a twinkle of an eye.
I am sharing this based on a story a friend of mine told me yesterday about how he lost crypto NetWorth in just one trade on one faithful day way back last upper year which is 2022.
According to him, he went long with all of his entire crypto NetWorth on an Altcoin because he was expecting the price of the altcoin to jump back up, after a news (which was later confirmed to be fake) caused the cryptocurrency to go down, but unfortunately for him, by the time he woke up from sleep the next day, on checking on this trade, he discovered that he had been completely liquidated because the price of the crypto currency ended up dumping even harder than before.
Anxiety and fear made me deposit more money and he try to see if he could DCA the dip and make some of the money he lost back, and at a point, the price reached his take profit target but unfortunately, the take profit did not fill before the price of the altcoin shoot up again and at end, he was liquidated again.
This experience for me showed that he was really inexperienced when it comes to trading futures, but the truth is that, such a thing can happen to anyone in times when volatility is very high, when price runs become really high, it makes sure to liquidate both long and short position in a matter of seconds and minutes, most especially, if you open a position with a very high leverage.
Best to avoid trading futures in times like this, but if you must, make sure you know what you are doing, and use proper risk management like the stop loss and take profit features, also ensure you are only trading with an amount of money you can afford to lose, and remember not to put all your eggs in one basket.
Happy trading ya all.
I used to actively trade perpetual futures on Bitcoin and alts, but after a few years I saw that they don't give huge positive difference comparing to spot. So I switched fully from futures to spot, and now trade on futures only when I'm sure that it's a good time for a short position or when I feel that leverage x2-x3 is okay to use because of some circumstances. But in general - futures is place where 99% of people lose and only 1% makes money in the long term. I definitely prefer spot and tell everyone to use it. Because in my opinion every derivatives trader finishes with one scenario - loosing gained money and even more, just on one unlucky trade, which he can't close because of greediness or other unpredictable situations. This is only my thoughts, you may agree or disagree, but I still think that spot in the best option for long term financial success.