Will the currency circle delivery contract be liquidated?

Yes, the currency circle delivery contract will be liquidated. Reasons include: severe market fluctuations, insufficient margin, excessive leverage and insufficient risk control. To avoid liquidation, measures can be taken: carefully select leverage, control positions, formulate stop-loss strategies, follow market dynamics and choose reliable exchanges.

Will the currency circle delivery contract be liquidated?

Delivery contract is a derivatives contract, which is essentially a tool for hedging risks. In the currency circle, delivery contracts are usually traded based on the fluctuation of the spot trading price of a certain cryptocurrency pair.

Will the position be liquidated?

Yes, the currency circle delivery contract will be liquidated.

Liquidation means that when the contract loss exceeds the available margin in the user's account, the exchange will force liquidate the position, and the user will lose all investment at this time.

Reasons for liquidation

The reasons for liquidation of delivery contracts include:

1. Severe market fluctuations: The cryptocurrency market is highly volatile. When the market fluctuates significantly, it may cause the contract price to fluctuate significantly, leading to Liquidation.
2. Insufficient margin: Users need to provide sufficient margin when trading. If the margin is insufficient, when the contract suffers a loss, it may lead to liquidation.
3. Excessive leverage: Contract trading generally provides high leverage, but the higher the leverage, the greater the risk of liquidation.
4. Insufficient risk control: The exchange’s risk control mechanism is imperfect and cannot identify and control risks in a timely manner, which may also lead to liquidation.

How to avoid liquidation?

In order to avoid liquidation of the delivery contract, users can take the following measures:

1. Choose leverage carefully: Do not use excessive leverage. The greater the leverage, the higher the probability of liquidation.
2. Control your position: Don’t invest too much money at one time, diversify your investments to avoid large losses in a single transaction.
3. Develop a stop-loss strategy: Set a stop-loss point. When the contract price hits the stop-loss point, the position will be automatically closed to avoid further losses.
4. Follow up market dynamics in a timely manner: Pay close attention to market dynamics and adjust trading strategies in a timely manner to avoid being caught off guard by market fluctuations.
5. Choose a reliable exchange: Choose an exchange with a well-established risk control mechanism and a good reputation to ensure the safety of your funds.

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