What are liquidation and liquidation in the currency circle? What is the difference between closing a position and liquidating a position?

In the cryptocurrency market, it is crucial to understand the concepts of liquidation and liquidation. "Liquidation" refers to the process of a trader actively or passively closing a position to close the position and settle the open order. On the other hand, a "blowout" is an emergency liquidation that occurs when a trader's margin is insufficient to cover a losing position.

Current liquidation and liquidation

What is currency liquidation?

Liquidation in the currency circle means that traders actively close their existing positions, that is, sell the purchased cryptocurrency or buy the sold cryptocurrency.

What is a currency liquidation?

Cryptocurrency liquidation means that when a trader uses leverage trading, the position loss exceeds the margin due to market price fluctuations, and the position is forced to be liquidated by the system.

The difference between closing a position and liquidating a position

特征	平仓	爆仓
主动性	主动	被动
原因	交易者主动关闭仓位	市场价格波动导致损失超保证金
损失	不一定有损失	一定有损失
保证金	不受影响	全部或部分亏损
触发条件	交易者决定	市场价格大幅波动
结果	结束仓位持仓	强制平仓，可能亏损全部保证金

The specific steps to close a position

1. Deciding to close a position warehouse timing.
2. Calculate the closing price and quantity.
3. Submit a closing order on the trading platform.
4. After the transaction order is completed, the position will be closed.

Specific steps for liquidating a position

1. Use leverage trading to open a position.
2. The market price fluctuates significantly, resulting in position losses exceeding the margin.
3. The trading platform forced liquidation of positions to offset losses.
4. Trader loses all or part of the margin.

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