Understanding the risk of liquidation in marginal trade
The world of cryptocurrency trade has become increasingly popular, and many investors are trying to achieve their high returns from their investments. However, there are also new risks that should be carefully taken into account before the marginal trade.
Liquidation is one of the most important risks associated with the margin trade in cryptocurrency. Liquidation occurs when the location of the dealer breaks its margin account, leading to the loss of funds or forced sales. In this article, we explore what the liquidation means marginal merchants, which can protect themselves.
What is the liquidation?
Liquidation occurs when the dealer has exceeded its available margin in the replacement or cryptocurrency market. This can happen in different ways:
- Crossing the lever
: The trade of too much lever can quickly clear the balance, leading to liquidation.
- Unlawful positions : If you have stations that are no longer profitable but still open, the platform can force you to sell or risk to find out your account.
- Market variations : In high market volatility, prices can decrease rapidly, leading to loss of value and liquidation.
Risks in liquidation
Liquidation can lead to significant losses with marginal dealers, including:
- Economic Pilate : In extreme cases, finding your account can lead to financial spoils and wipe for years or even decades of savings.
- Emotional stress : pressure to make quick decisions and control the risks can be stressful and demo.
- Loss of Opportunities : Liquidation can also cause loss of potential profits if they are forced to close their position.
protects against liquidation
While liquidation is a real risk, you can take action to relieve the effect:
- Set clear goals and budgets : Set your investment target before trading and set realistic goals.
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- View portfolio : If you apply your investments to multiple property, you can reduce the risk and increase the likelihood of a profitable business.
- ** Understanding marginal requirements
- Use the lever with careful : Be careful when using lever effect as this can increase both profits and losses.
Best Practices from Marginal Trade Cryptic Currency
- Small : Start with a conservative position to test your commercial skills and control the risk.
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- Use reliable wallets : Save your encryption casting safe, serious wallets and make sure that the assets are safe.
- Check your account regularly : Follow your credit regularly to identify potential problems before considering major concerns.
Research
The margin trade in cryptocurrency can be high risk activity, but by understanding risks and measurement to reduce phases. By following the best practices and aware of possible pitfalls, you can successfully switch to the world of marginal trade while protecting your financial future. Remember that it is always better to be in the wrong investment side of caution.
Other resources
* Exchange instructions : Check out the exchange instructions and the marketing of the margin.