Will Huobi Perpetual Contract be liquidated?

Huobi Perpetual Contract has the risk of liquidation. Liquidation occurs when a trader's position loss exceeds the funds in his account, resulting in the total loss of all invested funds. Factors that affect the risk of liquidation include leverage, market volatility, position management and risk appetite. Measures to reduce the risk of liquidation include using reasonable leverage, monitoring market dynamics, setting stop loss orders, diversifying investments and maintaining good risk management awareness.

Will Huobi Perpetual Contract be liquidated?

Clear answer: Yes, Huobi Perpetual Contract has the risk of liquidation.

Detailed explanation:

Huobi Perpetual Contract is a leveraged derivative that allows traders to bet with more than their actual account funds. While leverage magnifies potential profits, it also increases the risk of liquidation.

A liquidation occurs when a trader loses more than his account funds (including initial margin and additional margin). At this time, the exchange will automatically close the trader's contract, resulting in the loss of all the funds invested by the trader.

Factors affecting the risk of liquidation:

• Leverage multiple: The higher the leverage multiple, the greater the risk of liquidation.
• Market Fluctuations: Severe and rapid market fluctuations will cause positions to lose money quickly.
• Position management: Unreasonable position management (such as excessive position addition) will increase the possibility of liquidation.
• Risk Appetite: Trader’s risk tolerance will also affect the risk of liquidation.

How to reduce the risk of liquidation:

• Use a reasonable leverage multiple and avoid excessive leverage.
• Closely monitor market dynamics and adjust positions in a timely manner.
• Set a stop-loss order to automatically close contracts whose losses exceed a predetermined amount.
• Diversify your investments and avoid investing too much money in a single trading target.
• Maintain a good awareness of risk management and set clear trading strategies and risk tolerance limits.

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