Liquidation is something I fear the most in my trading history, because no matter how sure you are about a trade, the market can decide to go otherwise. If you've only set a take-profit (TP) without setting a stop-loss (SL), you'll surely face liquidation at the end of the day.
A seasoned trader once said it's better to hit your SL than to liquidate, because you'll have something to fall back on to recover your losses.
A word of caution is enough for the wise. I'm sharing this because of a close friend who saw me trading a few days ago and thought it was easy after watching some YouTube videos. He bought XRP futures and lost up to $1,000. Ironically, he later came to confess to me, which was already too late, as his overconfidence had led him to neglect setting an SL. I helped him fight for liquidation protection, and he managed to get $100 back
here due to his larger trading volumes.
Now, he's back to learn from me. What advice should I give him?
Te challenges many people that called themselves traders are facing in the market is because of greed.
Greed has made so many traders that don't want to use risk management in trading lose most of their funds which they might not be aware about. Such kind of trading is known as gambling. So many traders are gambling thinking they are actually trading in the market.
For us to trade successfully in the market, we need to make sure that we trade with risk management which involves using stop loses, take profits and others to make money from the market.