Leverage can amplify gains, but it also increases the risk of liquidation. Here are key strategies to mitigate this risk:
1. Set Conservative Leverage Ratios
Use lower leverage multiples to maintain a safety buffer against market fluctuations.
2. Monitor Positions Closely
Regularly track your positions and adjust stop-loss orders to limit potential losses.
3. Diversify Your Portfolio
Spread investments across assets to reduce exposure to any single position.
4. Maintain Sufficient Margin
Ensure you have enough collateral in your account to cover potential losses.
5. Understand Market Volatility
Be aware of market conditions and adjust your strategies accordingly.
By implementing these strategies, you can better manage liquidation risks and use leverage more effectively.