Binance Liquidation | What is Liquidation in Binance?

Binance liquidation: What is liquidation in Binance? What happens when you get liquidated on Binance? Getting liquidated on Binance and other exchanges is a mechanism for you to prevent more risk of your exchanges. Here in shetcoiner we’re trying to explain it; if you’re interested you can refer to What is Auto Cake Bounty? or How to find Binance wallet address? and other articles from shetcoiner.

You can watch this video from shetcoiner’s YouTube channel to learn more:

Binance Liquidation

In the continuation of the What is liquidation in Binance? article we should add that: When you get liquidated on Binance’s future trades, the exchange is actually Seizing all your assets to recover its loss. So the liquidate point is the price that exchange will automatically seize your assets for loss recovering.

Using future trades and investing on it always has a lots of risks and one of them is getting liquidated. Liquidation can happens to rookie or even professional dealers and make them lose a lot of money.

Liquidity is a concept in economics involving the convertibility of assets and obligations.

Quoted from Wikipedia.

Binance Liquidation: Unfortunately, after getting liquidated you can no longer go into negotiation with the exchange and cancel your contract. Using a high leverage is also one of the reasons of getting liquidated sooner in your trade’s position in Binance future market. The only time you can use a high leverage in Binance future trades that you are absolutely confidence in your forecast with high accuracy.

What is liquidation in Binance? Keep in mind that Liquidation in the digital currency market occurs in three situations:

  1. Liquidity of a cryptocurrency,
  2. Liquidation of the user,
  3. Liquidity of digital currency exchange,

In the rest of this article, we will explain these three cases. For getting more information, you can read Can you Create Multiple in Binance Accounts? article from shetcoiner.

binance liquidation - What is liquidation in Binance?

Binance Liquidation - What is Liquidation in Binance? one  Liquidity of a cryptocurrency

What is liquidation in Binance? Liquidity (liquidity or liquidity) of a cryptocurrency is a criterion for converting one asset into another asset, such as converting cryptocurrencies into cash, without affecting the price of that cryptocurrency. Stable coins such as Tether or coins such as Bitcoin and Ethereum are currently very liquid.

In continuation of Binance Liquidation article: If the liquidity is high, the users can convert their cryptocurrencies into cash without worrying about price increases or decreases. But, if the liquidity is low, the user will not be able to quickly convert the asset into cash or another digital currency, or converting it, will greatly affect on its price.

Binance Liquidation - What is Liquidation in Binance? two  Liquidation of the user

Liquidation of the user occurs following Futures and Margin transactions. In this case, the user receives a loan to complete the transaction, but due to a wrong prediction, he loses all or part of his fund in that transaction. In fact, liquidating the user means losing his money.

Binance Liquidation - What is Liquidation in Binance? three  Liquidity of digital currency exchange,

What is liquidation in Binance? Criteria for determining the liquidity of an exchange are: high number of purchase and sale orders, credit and value of the exchange and the ability to quickly provide the liquidity needed by users. It is interesting to know that the speed of digital currency trading in liquid exchanges is much faster than non-liquid exchanges.

binance liquidation - what is liquidation in binance?

What is liquidation in Binance?

As we said in this Binance Liquidation article, getting liquidated is one of the future contract’s exclusive features. In Binance exchange future contracts, you can have more profits that your stock using leverage. As you increase your chances to make more profit, you also increase that risk of losing you stock using leverage. Using low leverages can decrease the risk of your future trades for 4 or 5 times. Also try to enter some of your main stocks in this trades so if you got liquidated by the exchange, doesn’t cause a serious damage to you and your life.

The fact how much is the price of your liquidating position depends a lot on some factors like the exchange you’re using, your leverage and the trading volume. To any extent of more leverage that you enter to the future trade position, your liquidating point would be closer to the market price at the moment.

binance liquidation - what is liquidation in binance

Save your trading position (Near the liquid trading point)

What is liquidation in Binance? After knowing about Binance Liquidation, we should add that: For saving your trading position in Binance exchange when the price is near your liquid point, we have two ways for you to use and save yourself and your trading position in these emergency situations.

1- Have more purchase volume.

In this way you need to bring down the average Buy so you stay away from your liquid point. For doing this method, you need to have a really large purchase volume, if you can’t have more purchase volume, you can buy all you can to add to your purchase volume.

Where is Binance located?

2- Adding margins

In this method for Binance Liquidation, you do the same thing with the volume of your buying position, but you do this through the margin section in your Futures trading panel. Add some Tether to your account and add more volume to your trade through Add Margin to get the point and price of liquid in your trade farther.

binance liquidation - what is liquidation in binance?


In this article from shetcoiner we talked about Binance liquidation and what is liquidation in Binance? If you’re interested in knowing about this topics, you can refer to other related acrticles such as: What is Auto Cake Bounty? or How to find Binance wallet address? and other articles on our website. 


What is liquidation in Binance?

Liquidation is one of the most unpleasant events that can occur during the trading of digital currencies and may reduce the account balance of traders to close to zero.

What are the types of liquidation?

There are 3 types of liquidation: Liquidity of a cryptocurrency, Liquidation of the user and Liquidity of digital currency exchange.



If you want to know more about crypto currencies read the following articles on shetcoiner site:

How to know which coin will be listed on Binance?

difference between Binance chain and Binance smart chain?

Is it safe to store crypto on Binance?


    1. You can reduce the risk or move away from your liquid point by increasing the margin in futures. You can also use Cross option to reduce your trading risk, but this option can cause you to lose your entire futures account if the market price reaches your liquid point, so be careful.

  1. Hello
    How are you?
    As you mentioned in the article; one way to prevent from becoming liquid is to Add Margin. Can you explain a little more?

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