Understanding of the risk of liquidation by selling margins: Cryptocurrency Guide

In the financial world, margins have become increasingly popular with investors who want to strengthen their potential return. However, this high -risk activity is also related to the host or hidden trap, including the risk of liquidation. In this article, we will delve into the concept of liquidation trade, its influence on cryptocurrency investors, and give advice on how to mitigate the risk of dissertation.

** What is the liquidation?

Liquidation means a process where the lender or investor sells the property for a discount to recover the loss. In the context of the trade margin, the liquidation occurs when the market value of the cryptocurrency trades falls into the customer’s account balance, causes sales and causes losses.

Types of liquidation

There are several types of liquidation that can occur with marketing marketing:

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• Liquidation due to market volatility : If the cryptocurrency market value has fallen, the customer’s expense may be liquidated, even if it has sufficient margin or hostage.

Risk associated with liquidation trade margin

While liquidation can be useful for investors wishing to recover losses, they also arise with high risk:

• Capital loss : In the event of liquidation, investors risk losing part or their entire capital.

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• Risk of sadness

  : market volatility and fluid problems can lead to incomplete or delayed liquidation, so investors will be missed.

the risk of a particular cryptocurrency

The cryptocurrency space is particularly vulnerable to the risk of liquidation due to the following factors:

• High volatility : Cryptocurrencies are known for their extreme price fluctuations, making it difficult to predict market changes.

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Reduction of liquidation risk

Investors should: to reduce the risks associated with liquidation by margin trading in a margin:

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• Observe market conditions : Monitor market conditions regularly and adjust your trade strategy accordingly.

• Be informed : Be updated with regulatory development and industry trends that can affect the cryptocurrency market.

Conclusion

Although the liquidation in the trade margin may be a promising opportunity for investors who want to recover losses, it is very important to understand the risk. By recognizing a possible liquidation trap and taking action to mitigate the risk of dissertation, investors can reduce their impact on market volatility and make more reasonable investment decisions.

Refusal of responsibility

The information provided in this article is only for education purposes and should not be consulted as an investment tips.