If you're experienced crypto trader then you definitely know what asset liquidation and how important it is to consider the liquidation prices. If you're beginner and actually willing to level up your trading career then you should definitely consider switching to the margin trading and learn about leveraged trading option. So in here we're going to learn about liquidation process, which is an important part of the leveraged trading and you'll also find some awesome solutions to problems which you'll face after you switch to the leveraged trading.

What Is Leveraged Trading?

Leverage trading means trading the assets or in this case we'll consider very popular cryptocurrency Bitcoin. So in simple language, leverage trading is a type of trading which increases traders potential to buy or sell the asset even if trader does not have high funding. Some exchanges like Binance future offers 125x leverage. While in case of Forex trading some brokers offers leverage up to 200x. The most likeable thing about leveraged trading is that you can make profit in both situations whether price of asset rise or drop. There are two types of positions, long and short, if you think the price of Bitcoin will rise then you go with long and if you think opposite then you can make profit by going short on Bitcoin.

Now What Is Liquidation ?

So we've seen the positive side of leverage trading. Now it's time to look at the liquidation !! So liquidation is a process in which after opening the position if the asset crosses the mark, the position gets liquidated forcefully. Simply you'll lose your fund !!

The important thing to consider is that, higher the leverage lower is the liquidation mark, i.e if you opened a position with higher leverage let say with 50x leverage then your fund will get liquidated even if there is 2% movement in opposite direction. It is cleared that you should never go beyond 10x leverage even if you're experienced trader and for beginners I suggest you should keep playing at 2x leverage.

What's The Solution ?

Well solution is pretty simple, risk and capital management. Yes, from research it is proved that around 83% of traders got kicked out of the game due to their lack of risk and capital management, so they end up with zero funds. You might thing it's simple but when you start leverage trading then it's become difficult as lots of complexities get involved. 

Along with risk management and managing your funds properly there's another important thing is what platform you're using. Yes, platform matters the same as that of risk management, if you're trading with the platform whose intension (algorithm) is to liquidate your funds not then trust me you'll never win this battle.

I use FTX trading platform for trading leveraged tokens. This platform is developed by the Alameda Research, they're one of the largest traders in the trading industry, they trade millions daily. 25% of trading in cryptocurrency market is done by this firm.

While trading with this platform, I never got liquidated !! Yeah that's really great, no ? Okay then take a look at following stat comparing the percentage of liquidation volume compared to total volume in a single day on Binance Futures, BitMex and FTX.

So, picture tells the story !! If you're interested in leveling up your trading career then these leveraged trading and leveraged token will help you.

So that's it for now. If you've any questions regarding to article or anything related to cryptocurrency or any suggestions then please let's share our knowledge and grow together !! You can comment down, I'll be there in second !!

!! Thanks For Your Time And Appreciation !!

!! Good Luck With Trading !!