Contract trading, to most people, is as dangerous as a flood beast, but for a few, it is a powerful tool for wealth growth. If you plan to engage in contract trading, you must first understand the following content clearly.
Assuming the liquidation probability is 0.1%, when you conduct 1000 trades, the total probability of liquidation will rise to 63%; if the number of trades reaches 2000, the liquidation probability is as high as 87%. The liquidation probability mentioned here is based on theoretical assumptions. In actual operations, due to the price trend probabilities usually following a normal distribution, and as the leverage ratio continues to increase, the liquidation probability will grow exponentially. This means that when using 10x leverage, the probability of liquidation is much higher than when using 5x leverage.