How to establish your own risk control system?

1. When it comes to risk control systems, the most important thing is your own position management. BTC allows a maximum of 10x leverage, while ETH can only be 5-7x leverage. Therefore, the first step to prevent liquidation is to reduce leverage.
2. Find a trading system that suits you and continuously refine it. Every trade must have a logical basis; avoid trading randomly.
3. Reduce your trading frequency. Not to mention whether you work for an exchange or not, frequent trading can lead to a mindset of constantly seeking opportunities. When losses and drawdowns occur, this mindset becomes even stronger, leading to revenge trading, and ultimately heavy positions that cause huge losses or even liquidation.
4. Never play with altcoins. Here are a few reasons: first, even if you are lucky and make money on altcoins, you will lose it back eventually. Second, the maintenance margin rate for altcoins is very high. To explain, the relationship between maintenance margin and liquidation risk: for example, $BTC has a maintenance margin ratio of 0.5%. Altcoins' margin requirements are 10 to 20 times higher. Therefore, trading altcoins makes it easier to be liquidated because the exchange's risk control system doesn't want you to get wiped out. They increase the maintenance margin for altcoins because of their poor liquidity and insufficient depth. Even with low leverage, it’s useless—using 10x leverage on altcoins, you might think you can withstand 7.5% volatility, but if the maintenance margin is 10% and the initial margin is 12.5%, a 2.5% fluctuation will force your 10x leveraged position to be liquidated. Plus, expensive funding fees make liquidation inevitable. We don’t have unlimited bullets, so remember the advice: never play with altcoins. Don’t envy others making money on altcoins!
Finally, I wish everyone early financial freedom. Follow me for more useful knowledge.