Trading glossary · practical definition
What is liquidation?
An exchange-enforced position close when margin falls below the required threshold.
Liquidation in plain English
An exchange-enforced position close when margin falls below the required threshold.
Liquidation uses mark-price and margin rules, not simply the last traded price.
Practical example
Higher leverage reduces the adverse price move a position can absorb.
Common mistake
Using liquidation as a stop-loss.
Related tools and guides
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