#DayTradingStrategy

๐Ÿ’ฃ Why Liquidation Price Gets Closer When Holding a Long Position

In futures trading, liquidation happens when your position moves against you so much that your margin (collateral) can no longer cover the loss.

If you're holding a long position, your liquidation price is the price below your entry where the exchange force-closes your position to protect itself.

๐Ÿ”ป Hereโ€™s Why It Moves Closer:

1. Funding Fees or Borrowing Costs

If you hold for long, you pay funding fees (usually every 8 hours).

This eats into your margin, lowering the buffer and pulling your liquidation price closer ๐Ÿ“‰.

2. Unrealized Losses Accumulate

If the price drops and doesnโ€™t recover, your loss grows while your margin stays the same.

The closer you are to margin exhaustion, the closer liquidation becomes.

3. Auto-Deleveraging (on some platforms)

High leverage and low volume assets can cause your liquidation price to adjust even without price moving much, especially if volatility spikes โšก.

๐Ÿงฎ Example:

You go long BTC at $108,000 with 10x leverage.

If BTC drops to ~$102,500, liquidation hits.

But if youโ€™re paying fees, or if price hovers sideways or dips slowly, your liquidation price creeps up, say to $103,500 or higher ๐Ÿ˜ฌ.

โœ… Pro Tips:

Use low leverage (e.g. 2xโ€“3x)

Add margin to widen liquidation range

Close partially if trend turns

Avoid overnight fees stacking on sideways markets

AddinG.. margiN.. wiLL be.. A .. iDeA...๐Ÿ˜๐Ÿ˜๐Ÿ˜๐Ÿ˜