$BTC saw many friends asking why my margin only lost less than half before liquidation?
Let me explain the science behind forced liquidation fees and why I must advise you against going all-in.
Everyone can first look at the two images below, which are from a painful order from a certain European trader. If you look closely, you will find that with the same margin, the same position, and the same price, the calculator shows an actual loss of only 8200u, but the position was liquidated at 15140u, which means almost half of the liquidation fees! Scary, right!
So why is everyone saying not to use high leverage and not to go all-in? Because the winning rate is truly absurdly low. Clearly having ten thousand dollars but only being able to lose five thousand before liquidation, how is that supposed to work? In this order, the fee deducted was 1000u, and the forced liquidation fee was 7000u, so the actual fifteen thousand funds were used for less than half. Taking the order in the image below as an example, if his Ethereum rises by 16 points, he earns around 8000, but if it falls by 16 points, he loses 15000! How could the risk-reward ratio possibly make money?
Forced liquidation fees become more expensive with higher leverage, and I've even seen negative balances after liquidation, so definitely do not use high leverage and do not go all-in. As the old saying goes, in the crypto world, fast is slow and slow is fast.
Let me explain the science behind forced liquidation fees and why I must advise you against going all-in.
Everyone can first look at the two images below, which are from a painful order from a certain European trader. If you look closely, you will find that with the same margin, the same position, and the same price, the calculator shows an actual loss of only 8200u, but the position was liquidated at 15140u, which means almost half of the liquidation fees! Scary, right!
So why is everyone saying not to use high leverage and not to go all-in? Because the winning rate is truly absurdly low. Clearly having ten thousand dollars but only being able to lose five thousand before liquidation, how is that supposed to work? In this order, the fee deducted was 1000u, and the forced liquidation fee was 7000u, so the actual fifteen thousand funds were used for less than half. Taking the order in the image below as an example, if his Ethereum rises by 16 points, he earns around 8000, but if it falls by 16 points, he loses 15000! How could the risk-reward ratio possibly make money?
Forced liquidation fees become more expensive with higher leverage, and I've even seen negative balances after liquidation, so definitely do not use high leverage and do not go all-in. As the old saying goes, in the crypto world, fast is slow and slow is fast.