Understand the risk of elimination in marketing trade
The world of cryptomic traffic is becoming more and more popular and many investors want to use high investment in their investment. However, this growth also leads to new risks which should be carefully taken into account before entering marginal trade, which is a type of trading where leverage is used to amplify profits and losses.
One of the most important risks associated with the marginal trade in cryptocurrency is the liquidation. Elimination occurs when the merchant’s position is contrary to its margin account, resulting in loss of funds or sales of forced assets. In this article, we will examine what the liquidation of the margins, the related risks and how to protect us.
What is elimination?
Liquidation occurs when the trader has exceeded its affordable margin on the stock market market or cryptocurrencies. This can happen in several ways:
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- Positions not exhausted : If you have positions that are no longer profitable but always open, the platform can force you to sell them or risk having your account.
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Market fluctuations : during high market volatility, prices can drop quickly, resulting in loss of value and liquidation forcing.
Risks of elimination
Liquidation can cause significant losses for margins, in particular:
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- Emotional stress
: Pressure on rapid decisions and risk management can be stressful and demotivating.
- Loss of opportunities : The liquidation can also lead to missing potential benefits if you are forced to conclude your positions.
Protection against elimination
Although the liquidation is a real risk, there are measures that you can take to mitigate its impact:
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- Use controls for loss of stop : The stop control parameters can help limit the potential losses of closing the positions if they drop below a certain price level.
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- Wisely use the lever effect : Be careful when using the lever effect, because it can amplify the benefits and losses.
procedures proven for margins in cryptomena
- Start small : Start with a conservative size position to test your commercial skills and control the risk.
- Choose renowned exchanges : Research and exchanges selections that offer solid safety measures and fair conditions.
- Use reliable wallets : Use safe and renowned wallets to store cryptocurrencies and make sure your assets are safe.
- ** Regularly check your account: follow your balance regularly to identify potential problems before becoming the main concern.
Conclusion
Trade with cryptocurrency margins can be a high risk activity, but by understanding risks and taking measures to mitigate them, you can minimize the probability of liquidation. By monitoring proven procedures and by performing potential traps, you can successfully navigate in the world of marginal traffic while protecting your financial future. Remember that your investments are always better wrong on the side of prudence.
More sources
* Exchange instructions: get to know exchange policies and margins trading rules.