Futures Trading on CoinDCX: Update in Liquidation Protocols

Understanding Liquidation in Crypto Futures Trading

In crypto futures trading, liquidation occurs when a trader’s margin balance falls below the required maintenance margin level, typically due to adverse price movements. This triggers an automatic closure of the trader’s position by the exchange to prevent further losses.

For traders, liquidation serves as a crucial reminder of the importance of managing leverage effectively and setting appropriate risk management strategies. By maintaining adequate margin levels and utilizing stop-loss orders, traders can mitigate the risk of liquidation and protect their capital in volatile market conditions.

Additional Read: Liquidation in Crypto Futures Trading: Strategies to Minimize & Prevent it

Update in Liquidation Protocols: Up to 1% Liquidation Fee

CoinDCX is implementing a liquidation fee of up to 1% for futures traders who face liquidation in the market. The liquidation fees may vary up to a maximum of 1% of the initial position size for all crypto futures open positions, depending on the market situation and slippage while liquidating the position.

How Can You Avoid Paying Liquidation Fees?

You can easily avoid paying the liquidation fees on the CoinDCX platform while futures trading by simply building the practice of using stop-loss orders on all your open positions in the crypto futures market. This enables you to have proper capital and risk management in place for your trades.