The numbers on the phone screen suddenly reset to zero, and my heart stopped as well. Such things happen almost every day.

At two in the morning, the phone vibrated and broke the silence. On the other end of the line, an old trading buddy's voice trembled: "My 6000 yuan is gone... I had a full position with 5x leverage, it only dropped 3%, how could it have blown up like this?"

I checked his trading record, and he put in all 5800 yuan without setting a stop loss. This is what is called using the entire margin — betting all the money in the account on a single trade. If the market fluctuates randomly, the account will go straight to the bottom.

Many people think that using a full position is a quick path to wealth, but in reality, it's a direct route to zeroing out your account. According to data statistics, the maximum loss from this full position strategy can reach as high as -54%, and the win rate is shockingly low.

**Why do liquidations happen? The key is not the leverage multiplier, but how much principal you used.**

Let's look at two real comparisons. An 800 yuan account, using 750 yuan to leverage 5 times, will result in the account being completely wiped out with just a 6% reverse market fluctuation. Similarly, with the same 800 yuan, if you only use 75 yuan to leverage 5 times, it would need to fluctuate down to -86.7% to lose everything—showing more than 12 times the risk resistance capability.

My buddy put 96.7% of his principal into it, and with 5x leverage, he can't hold on when the market moves a little. Leverage is like a double-edged sword; it can amplify your returns but also exponentially increase risk. Even a small fluctuation can trigger a liquidation directly.

The cryptocurrency market has no limits on price fluctuations, and the inflow and outflow of funds can cause dramatic volatility of dozens of percentage points at any time. If you enter the market with a full position, it's akin to sitting in a paper boat during a storm—one wave comes, and both you and the boat sink.