📘 Crypto glossary from #cryptoland_88
Topic of the day: liquidation and margin — what it is, how to avoid losing your deposit
#Binance #обучение #Глоссарий #Фьючерсы
🔹 1. Margin
Margin is the collateral you deposit to open a leveraged position.
📌 Roughly speaking, you deposit $100, Binance "adds" $900, and you trade with $1000.
There are two types of margin:
Isolated — risk is limited to the boundaries of one position.
Cross margin — the entire account balance participates in maintaining the position.
💡 Important: when the price falls, you risk not only your margin but your entire balance (in the case of cross margin).
🔹 2. Liquidation
Liquidation is the automatic closing of a position by the system when your margin does not cover losses.
Binance will not let you go negative, it will simply close the trade at a loss.
📉 If the market goes against you and the price approaches the liquidation price, the system will "throw" you out of the position to avoid losing more than you deposited.
💥 A common mistake for beginners: trading with high leverage (10x, 20x, 50x) and not setting stop-losses. This is a direct path to liquidation.
🔍 Example:
You opened a long position with 10x leverage, deposited $100. Position = $1000.
If the price drops by ~10%, your $100 will be "burned" — position is liquidated.
🎯 How to avoid liquidation?
Use moderate leverage (x2–x5 maximum).
Set a stop-loss.
Choose isolated margin to avoid burning your entire account.
Watch the liquidation price before entering a trade.
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