Liquidation Price: Don't Get Rekt
Trading with leverage (futures/margin) amplifies gains, but it introduces a deadly risk: Liquidation.
What is Liquidation?
If your position moves against you and your margin (collateral) isn't enough to cover the loss, the exchange automatically closes your position. You lose your entire initial margin.
Calculating the Danger Zone
Your liquidation price depends on:
- Entry Price
- Leverage Used (e.g., 10x, 50x)
- Maintenance Margin (Required % to keep position open)
Higher Leverage = Closer Liquidation Price
Always know your number before you enter a trade. Use the Liquidation Price Calculator to stay safe.