Liquidation is often more psychologically devastating than having your account wiped out.

I've seen too many people rush into the contract market with dreams of "turning things around overnight," only to end up as part of the "nine out of ten losing" statistics. What's even more heartbreaking is—they clearly know they're losing money but simply can't stop. This isn't bad luck; frankly, they just don't understand what they're doing.

Here's the key issue: when you see platforms write "5x leverage" or "10x leverage," do you really think it's truly 5x or 10x? No. The actual risk exposure may have skyrocketed to dozens or even hundreds of times.

For example, if you have only 10,000 USDT in your account, and your maximum tolerable loss is 500 USDT, but you open a position of 30,000 USDT. On the surface, the leverage looks like 5x, but the real risk leverage is already 60x (30,000 USDT position ÷ 500 USDT actual loss limit). A slight market fluctuation, and you're underwater. This is no longer investing; it's gambling.

Experienced contract traders have long seen through this. They don't rely on leverage multiples to wildly amplify gains; instead, they treat it as a risk management tool—that's the real difference in gameplay.

The true face of leverage: showing 5x, but the risk is actually 50x

The most common pitfall with leverage is that most people only understand it on the surface. Seeing "5x leverage" and feeling safe, unaware that danger is already brewing.

Take the same example: you have 10,000 yuan principal, and the maximum you can lose is 500 yuan. But you open a 30,000 yuan position to bet on a direction. It looks like a 5x leverage, but in reality, you're enduring a 60x real risk to hold this position. A slight market shake, and liquidation happens, turning you into a prey for the market makers.

The essence of leverage is not about amplifying returns but about capital efficiency. Once you treat it as a "quick money button," it automatically becomes a bomb buried under your account.

Most people fall into emotional traps: why continue even when clearly losing

Why do people keep placing orders even when their accounts are bleeding? Several psychological traps are at play:

FOMO (Fear of Missing Out) is the biggest culprit. Seeing others make money while you're losing, this anxiety drives people to make reckless decisions.