$ETH During this round of volatility in perpetual contracts, a $11.47 million long position was liquidated.
Let’s use this figure to explain liquidations.
The amount is based on the position’s notional value; it doesn’t equal the actual loss. With isolated margin, if a 10x leveraged position is liquidated, the main loss is the margin—roughly 10% of the notional value.
The key to leveraged trading is that even if you eventually get the direction right, interim volatility can still liquidate your position early.
It’s much more reliable to work backward from where you’d place your stop-loss to determine your position size than to pick one arbitrarily.
Let’s use this figure to explain liquidations.
The amount is based on the position’s notional value; it doesn’t equal the actual loss. With isolated margin, if a 10x leveraged position is liquidated, the main loss is the margin—roughly 10% of the notional value.
The key to leveraged trading is that even if you eventually get the direction right, interim volatility can still liquidate your position early.
It’s much more reliable to work backward from where you’d place your stop-loss to determine your position size than to pick one arbitrarily.
