#Square โ ๏ธ How does Liquidation happen in Futures? Newcomers must know!
Many start trading Futures, but they do not fully understand how Liquidation works.
The result? The entire balance disappears ๐
๐น What does Liquidation mean?
When your trade goes into a large loss and it is not possible to maintain the margin, the exchange automatically closes the position โ this is called Liquidation.
๐น How does it happen?
Suppose โ you took a position of 200 USDT using 10 USDT with 20x Leverage.
If the market moves slightly against you by a small percentage,
then your 10 USDT could be gone.
๐ The higher the Leverage, the faster the Liquidation.
๐น What to do to avoid Liquidation?
โ Use low Leverage (3xโ5x)
โ Always set a Stop Loss
โ Do not trade with your entire balance
โ Use Isolated instead of Cross (better for newcomers)
๐ก Important note
Futures are High Risk, High Reward.
If you enter without understanding, it becomes gambling rather than income.
๐ฌ What x Leverage do you use?
Write in the comments ๐