📕 Crypto glossary from #cryptoland_88

Topic: What is liquidation, how it triggers, and how not to lose your entire deposit

#Binance #Фьючерсы #Риски

😬 Liquidation is when the exchange automatically closes your position to prevent you from going into the red.$BNB

This usually happens when trading with leverage, when the price goes against your forecast.

📉 You had a long position with 10× leverage on $100, the price dropped — and now your entire margin is gone. Liquidated.

⚙️ How does it work?

  1. You open a position with borrowed funds (for example, $100 of your own + $900 from the exchange).

  2. The market moves against you — your loss increases.

  3. As soon as the loss approaches your margin — the exchange closes the position and takes the leftovers.

📌 Reasons for liquidation:

— Too high leverage (10×, 20×...)

— Absence of stop-loss

— Poor risk management

— Overestimating your confidence

🛡 How not to lose your entire deposit:

✅ Set a stop-loss

✅ Do not use maximum leverage

✅ Do not invest your entire deposit

✅ Learn on demo or with minimal amounts

✅ Monitor the liquidation price — it is visible in the Binance interface

💡 Conclusion:

Liquidation is not an enemy. It is a protection mechanism.

But your protection is a smart approach and discipline.$LTC

Success in crypto = not losing on the first drop.$BTC

🔜 In the next issue: How to choose a cryptocurrency for investment?
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