I believe many friends who trade contracts have experienced the 'spike'—the price suddenly fluctuates extremely, causing stop-loss orders to fail and directly leading to liquidation. Recently, a certain exchange experienced this situation, resulting in significant losses for many investors. However, I had already seen a piece of news from the exchange and had transferred my contract positions to a safer platform, perfectly avoiding this risk.
Key takeaway: the 'small actions' of exchanges often release signals in advance through news or announcements, it depends on whether you can understand them. That day, I saw the news released by the exchange: 'We will undergo a system upgrade soon, and during the upgrade, some trading pairs may experience liquidity shortages.' Many people thought this was just routine system maintenance and didn’t take it seriously, but I immediately recognized the risk. You should know that 'liquidity shortage' is a breeding ground for 'spikes'—when there are very few buy and sell orders in the market, a small number of large orders can cause significant price fluctuations, making it easy for the market makers to 'spike' and harvest retail investors.
More critically, I also saw another piece of news: this exchange was recently exposed for having issues with 'falsified trading volume,' and regulatory agencies have intervened for investigation. Putting these two pieces of news together, the risk signal became very clear: an exchange with compliance risks and potential liquidity shortages is undoubtedly a high-risk area for contract trading. My operation was very simple: I closed all contract positions on that exchange that day, transferred the funds to two leading exchanges, and split the positions while reducing the overall leverage ratio.
The reason many people fall into traps is that their choice of exchange is too arbitrary, thinking 'any platform is the same.' But in reality, the compliance, fund security, and liquidity of the exchange directly determine your investment risk. Remember my selection criteria: prioritize exchanges with public financing backgrounds, complete regulatory filings, and positive news coverage; stay away from those with negative news, frequent system failures, or exposure for violating regulations.
Another trick to avoid traps: pay attention to the 'funding rate' and 'position data' of the exchanges. If a platform's funding rate suddenly rises abnormally, and the position volume increases rapidly, it indicates that market sentiment is overheating, and the probability of 'spikes' will significantly increase. At this time, you need to reduce your positions in a timely manner or even temporarily exit contract trading. Last year, there was news reporting that a small exchange triggered a large-scale 'spike' liquidation due to abnormal funding rates, leaving many investors with no way to protect their rights.
In the crypto space, choosing a reliable exchange is more important than picking the right coin. After all, the platform where you put your money is bound by its rules. Follow me, and next time I'll compile a 'Guide to Avoiding Traps in Exchanges' to help you identify those potentially dangerous platforms that might 'spike' or 'run away.' After all, in the crypto space, preserving your principal is the only way to have a chance for a reversal! Follow me @链上标哥 and don't get lost!
