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A Beginner’s Guide to Avoiding Liquidation on BITGP Futures
BITGP
2025-11-30 12:53
Trading Futures on BITGP offers massive profit potential through leverage — but it also brings significant risks, especially liquidation. For beginners, understanding how liquidation works and applying proper risk-management strategies is essential for long-term success. This guide will help you avoid common mistakes and protect your capital while trading Futures on BITGP.
What Is Futures Liquidation?
Liquidation happens when market volatility drives your margin ratio below the maintenance requirement. At that point, the system will automatically close all your positions at the best available market price to prevent further losses.
Formula:
Margin Ratio = (Assets + Unrealized PnL) ÷ (Position Value × Leverage)
If the ratio drops below the maintenance level → liquidation is triggered.
In extreme volatility, the executed liquidation price may fall below the bankruptcy price, causing you to lose your entire margin or even owe additional compensation.
Why Do Beginners Get Liquidated Easily?
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Using excessive leverage
High leverage reduces your safety buffer. A 1–2% adverse move can wipe out your margin instantly. -
Ignoring stop-loss orders
Hoping the market will “come back” is the fastest way to liquidation. -
Overconfidence & emotional trading
Refusing to cut losses, averaging down, or doubling positions often leads to catastrophic loss. -
Overtrading
Opening too many positions at once amplifies total portfolio risk.
How to Avoid Liquidation on BITGP
1. Control Your Leverage
Higher leverage = narrower liquidation range.
Example:
You hold $10,000 and use 5x leverage to open a $50,000 BTC position.
• BTC +20% → $10,000 profit
• BTC −20% → you lose your entire margin
Basic rules for BITGP beginners:
- Keep leverage under 10x
- Maintain margin above 10%
- Never all-in one position
2. Use Stop-Loss Orders
Leverage management reduces risk, but only stop-loss actively protects your capital.
Example:
Open a BTCUSDT Futures position at $10,000 → set stop-loss at $8,000.
If price hits that level, BITGP automatically closes the position to limit damage.
Stop-loss ensures:
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Discipline
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Protection from sudden volatility
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A clear exit strategy
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Reduced emotional pressure
On BITGP, you can use up to 20 stop-loss orders, ideal for multi-pair Futures traders.
3. Apply Proper Asset & Position Management
The golden rule:
Risk only 5–10% of your total account per trade.
Example:
Your BITGP Futures account = $10,000 →
Each trade should risk only $500–$1,000.
This protects you from:
-
Losing the entire account after a few bad trades
-
Emotional mistakes
-
Oversized positions
Avoid overtrading
If you risk 1% per position and open 25 positions → a sudden market swing can cost you 25%.
Portfolio-level rule: Total exposure should never exceed 10% of your account.
Conclusion
Liquidation is a major threat for Futures traders, especially beginners. But with the right strategy, you can minimize risk and trade more confidently:
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Use reasonable leverage
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Always place stop-loss orders
-
Practice strict asset management
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Avoid emotional and excessive trading
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Understand BITGP’s Futures rules before entering any position
Futures trading is not gambling — disciplined risk management is the key to long-term success on BITGP Futures.
Disclaimer
Cryptocurrencies are subject to high market risk and volatility despite high growth potential. Users are strongly advised to do their research as they invest at their own risk. Thank you for supporting BITGP!
BITGP is a trading platform within the Bitget ecosystem, focused on the Southeast Asian market including Vietnam. The exchange leverages Bitget’s infrastructure, liquidity, and User Protection Fund to deliver a secure and reliable trading experience for investors.
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