What is the true nature of liquidation? It's not just a small loss in your account, but rather a direct "liquidation" enforced by the trading system. When the market trend is contrary to your holdings, if the price fluctuates wildly, your margin will quickly become insufficient to maintain your position. Once the margin falls below the minimum level required by the system, unable to cover potential loss risks, the system will automatically execute liquidation, forcibly closing all positions. The purpose of this mechanism is very simple - to protect the account from entering a negative state. Therefore, liquidation is not a trivial matter; it means your holdings have fallen into extreme risk, and the system is "applying the brakes" for you.
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Tokenomics911
· 14h ago
Damn, this is why I got closed out last time without even reacting.
Liquidation is basically the system's final ultimatum, you can't escape it.
Leverage is truly a double-edged sword, a single pullback can wipe you out.
Just thinking about it makes me anxious, insufficient Margin means a dead end.
So, you see, when playing contracts, you have to leave enough buffer, otherwise just wait to be forcibly taken away by the system.
This mechanism seems to protect the account, but in reality, it's just playing people for suckers.
The liquidation prices set by some exchanges are really harsh, a bit shady.
I don't touch leverage at all now, I can't afford that thrill.
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RatioHunter
· 14h ago
Damn, another bloody lesson. Liquidation is truly the grim reaper of accounts.
Insufficient Margin leads to an immediate GG, and the system doesn't give you any reaction time at all.
I've heard too many frens say that only after being liquidated do they understand what pain is. Leverage looks so tempting but it can really be deadly.
What is the true nature of liquidation? It's not just a small loss in your account, but rather a direct "liquidation" enforced by the trading system. When the market trend is contrary to your holdings, if the price fluctuates wildly, your margin will quickly become insufficient to maintain your position. Once the margin falls below the minimum level required by the system, unable to cover potential loss risks, the system will automatically execute liquidation, forcibly closing all positions. The purpose of this mechanism is very simple - to protect the account from entering a negative state. Therefore, liquidation is not a trivial matter; it means your holdings have fallen into extreme risk, and the system is "applying the brakes" for you.