How to Calculate Your Liquidation Price:
"Here is a Simple Method"📊🫰
Let's calculate your liquidation price step by step using:
Own money: $10
Leverage: 25x
Entry price of the coin: $120
Trade direction: Long
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Step 1: Total transaction size:
Leverage of 25x:
> $10 × 25 = $250
So, you buy $250 worth of the coin at $120.
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Step 2: Calculate the % rate before liquidation:
Leverage of 25x:
> 1 / 25 = 0.04 = 4%
Liquidation occurs if the price drops by 4%.
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Step 3: Calculate the amount before liquidation
Rate = 4%
Entry price of the coin: $120
> 0.04 × $120 = $4.80
Liquidation occurs if the price drops by $4.80
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Step 4: Calculate the coin amount at liquidation
> $120 - $4.80 = $115.20
The liquidation amount is $115.20
So:
If the price of the coin falls to $115.20, your transaction is liquidated and you lose your $10.
