BitTap

Summary Risk Management : Contract trading involves high risks, so a detailed risk control plan is essential. Capital Management : Proper fund allocation reduces risk and prevents liquidation. Control Leverage : Adjusting the leverage ratio is key to avoiding liquidation. Set Stop Losses : Though more challenging than taking profits, stop losses are crucial for avoiding significant losses. What is Contract Liquidation? Contract liquidation occurs when market volatility causes your account’s margin to fall below the required maintenance level, leading the platform to automatically close your positions and clear any losses. This process can be explained by the following formula: Margin Rate = (Account Equity + Unrealized P/L) / (Contract Value × Leverage) When the margin rate falls below the required maintenance margin, the forced liquidation mechanism is triggered, and the system will close positions at the best available market price. In highly volatile markets, the liquidation price ...