How to Reduce Futures Liquidation Risk

Customer Specialist Team
Updated

1. Choose leverage responsibly

CoinEx Futures trading supports maximum leverage of 100x. Please be sure to use the leverage wisely based on your risk tolerance.

Take BTCUSD inverse contract as an example, the maximum available leverage is 100x. Assuming your principal is 1 BTC, and you choose 5x leverage when opening the position, then your maximum openable amount is 5 BTC. However, to reduce the risk, you can set the buying/selling amount at 2 BTC. In this case, your actual leverage is 2x, and the risk of forced liquidation is relatively lower.

 

2. Stop loss in time

(1) Reduce position: When Mark Price moves close to Forced Liquidation Price, you can reduce your positions manually to minimize the risk of forced liquidation.

(2) Set stop-loss: You can preset a Stop Price to stop loss in TP/SL settings. When Mark Price or Latest Price reached your Stop Price, market orders will be submitted and all your positions will be liquidated at the best price. For more details, please refer to How to Take Profit & Stop Loss in Futures Trading.

 

3. Increase position margin

By transferring spot assets to the Futures account, you can increase your position margin and reduce the risk of forced liquidation.

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