Are you one of the crypto traders in 2022? Then you’re probably losing a lot of money. Over $200 billion has been wiped out of the entire cryptocurrency market and many traders have been suffering liquidation, great losses, and even the pain to flee this dark jungle full of giant bears. If you survived the huge market crash, congrats! You are one of the lucky guys.
Of course, luck doesn’t last forever. Whether you’re a newbie or a veteran, you should learn from the experts how to avoid liquidation or recover your losses afterward. This article may help you get rid of the shadow of liquidation and become one of the few winners in the crypto carnage who have the last laugh.
How to Avoid Liquidation?
- Plan Your Trades
The best way to minimize your liquidation risk is to plan your trades well before opening them. Having a strategy and calculated approach will reduce your chances of unnecessary losses. A trading simulator is good for you to practice your trading plan, and test your strategies to improve accuracy.
- Keep An Eye on the Margin Ratio
Another way to avoid liquidation is to keep an eye on the margin ratio. It entails ensuring the margin does not hit 100%. When it gets close to 100%, you keep the position alive by adding more of it. This allows you to trade for long without risking liquidation.
Not having time? Too tired? Then you can try copy trading. It’s perfect if you are too busy to monitor the margin ratio and every market move. Meanwhile, you can increase your profitability by learning the best strategy from superior traders.
- Take Advantage of Leverage
Other articles may suggest you lower the leverage. Yes, they are correct: low leverage is the key to lowering the risk. However, you’ll have to invest more for the low leverage that increases your costs and your profits will remain elusive.
It is a two-edged sword. High leverage may increase the risk; however, you will not only take fewer losses but also reduce the chance of liquidation through profitability as long as you set stop loss timely. Smart traders know leverage is the same as putting in a coin and the platform lending you a sum of money, so why not use that money to ride out the market volatility?
How to Recover From Liquidation?
- Change Your Strategy
Fear the market crash? Don’t want any risks? Maybe it’s time to change your strategy. Choose a conservative strategy like putting your money in a high-interest rate wallet and slowly recovering from the liquidation to turn your losses into profits. An annual interest wallet is similar to a newbie village, allowing you to live a peaceful life and profit over the long term as the market fluctuates; or healing up the warrior to challenge the boss again when the bullish market comes.
- Increase Your Principal with Benefits and Tools
To re-challenge the boss called ‘market’, you need a sum of money – oh no, your money was lost in the last liquidation! Your capital cannot support your revenge! What should you do?
You can try to choose a platform with welcome bonuses, where you can get a preferred bonus if you deposit money in your account. Some even offer you a big reward as a new user. You can use this money to increase your principal, and more principal means greater mistake tolerance, lower risk of liquidation, and more profits.
- Choose A Reliable Exchange
You know why liquidation is terrible: many exchanges forcibly close positions when the balance loss of ≥50% (so-called liquidation). The balance after liquidation will be deducted which is extremely unfriendly to users who are being liquidated. We should select an exchange that would not deduct the users’ balance like Bexplus.
Bexplus does not deduct the users’ balance after liquidation. It closed the positions when the balance lost ≥70%, which gives users more opportunities for fault tolerance. If the user’s balance loses to a negative value, the loss will be borne by Bexplus. Its user-friendly mechanism makes users feel secure and protects users’ profit.
Recommended User-centric Crypto Exchange —— Bexplus
Bexplus is a leading crypto derivatives trading platform offering 100x leverage futures trading on various trading pairs: BTC, ETH, ADA, DOGE, XRP, etc. Furthermore, It also boasts of the following features:
Bexplus never stops the pace to provide users with advanced and effective opportunities to trade. Click here to register, get a 100% bonus and share the $5000 reward!