If you are trading crypto or have just entered the field, you have definitely heard the term liquidation.
But the problem is that many people enter trading without understanding this term… and that is a cause of heavy losses.
Let's understand the topic simply 👇
🔹 What does it mean to liquidate buy or sell positions?
Liquidation of positions happens when:
You open a buy (Long) or sell (Short) position.
And use leverage
And the market moves against your expectations by a large percentage
Then the platform forcibly closes the deal
To protect itself, not to protect you.
What does your capital mean?
💥 Liquidated.
And this happens a lot in major currencies like $BTC or even strong projects like $ETH and $BNB when the market is violent.
🔹 Why do people say liquidation is forbidden?
There are two famous opinions 👇
📌 The first opinion (religious)
Many people see that:
Leverage has a gambling connotation
Loss happens suddenly and without control
The platform profits whether you win or lose
That's why they consider this type of trading impermissible.
📌 The second opinion (practical)
It's not forbidden… but:
Very risky
It relies more on luck than planning
And most of those who use it end up with a loss
And this is a reality we've seen thousands of times in the market.
🔹 The problem is not in trading… the problem is in the approach
Trading itself is a tool
But the difference between:
Someone is trading with capital management
And someone enters with high leverage and without a plan
What's the difference between:
📈 Continuity
📉 Or liquidation in a minute
That's why the smart trader:
Enters calculated trades
Chooses a good timing
And understands that the market isn't always in his favor
🔹 So what should I do as a user who wants to learn?
If you're still a beginner:
Stay away from high leverage
Understand the market first
Follow the price movements
And learn without rushing
Trading is not a push of a button
Trading is a decision.
✍️ Summary
Liquidating positions is not a word to scare you
But the word understands you
So you don't enter a trade without knowing its outcome.
If you understood the risks
You will trade consciously
And then your chances of continuing increase.
💡 Final notes and tips
Not every price movement is an opportunity
The market always gives an opportunity to the patient
Read, learn, and then decide
