Empire Star

Account Liquidation in Futures Trading and How to Mitigate It
There are two common reasons that can easily lead to liquidation:
Significant market volatility exceeding the account balance.The asset reaching the liquidation price.
1. Case of exceeding the account balance
For example, if you trade the $XRP /USDT pair with 20x leverage and have 500 USDT in your account, what is the maximum position you can open safely?
Answer:
The safe amount for placing orders must not exceed 20x the value of your capital. Here, the calculation is:
20 x 20 = 400 USDT.
To ensure safety, you should not place orders exceeding 20 USDT per position.
2. Case of exceeding the liquidation value
When the traded asset is highly volatile, the liquidation price is much closer to the entry price. Conversely, with less volatile assets, the liquidation price is farther away.
To win quickly:
Choose highly volatile assets with a lower profit margin (as the risk is higher).For less volatile assets (e.g., BTC, ETH), you can opt for higher profit margins since the risk of hitting the liquidation price is lower.
This approach allows for strategic adjustments based on the asset’s volatility and your risk tolerance.
This is a simple formula to achieve profits with reduced risk.
If you have any ideas, let me know!
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