What to do if BigONE leverages liquidation?

After leveraged liquidation on BigONE, analyze the liquidation reason, contact customer support, assess the financial impact, review trading strategy, manage emotional response, seek professional advice if needed, and consider alternative trading options with lower leverage.

Nov 28, 2024 at 07:20 am

What to Do if BigONE Leverages Liquidation

Understanding Leverage Liquidation

Leverage trading amplifies profits and losses by allowing traders to borrow additional capital to increase their market exposure. However, excessive leverage can lead to liquidation, the process of forcibly closing a leveraged position when it falls below a certain threshold.

Steps to Take After Leveraged Liquidation on BigONE

1. Analyze the Liquidation Reason

Determine the specific cause of the liquidation by reviewing your trade history and the platform's liquidation rules. Identify if it was due to:

• Margin Call: Failure to maintain the minimum required margin ratio.
• Price Fluctuation: Rapid market movements causing the asset's value to drop significantly.
• System Error: Rare technical issues on the exchange's platform.

2. Contact BigONE Support

Reach out to BigONE's customer support team through live chat, email, or ticket system to:

• Confirm the liquidation details and reason.
• Inquire about any available compensation or refund options.
• Report any suspected system errors that may have contributed to the liquidation.

3. Assess Financial Impact

Calculate the total loss incurred from the liquidation. Determine the amount of borrowed capital that was lost and consider the impact on your overall trading strategy. This will help you make informed decisions about future trades.

4. Review Trading Strategy

Reflect on your trading strategy and identify any areas for improvement. Consider adjusting the following:

• Leverage Ratio: Reduce leverage levels to mitigate liquidation risks.
• Risk Management: Implement stop-loss orders and position sizing to limit potential losses.
• Market Research: Enhance your market analysis skills to better anticipate price movements.

5. Manage Emotional Response

Liquidation events can be emotionally distressing. Handle the situation with composure and avoid making impulsive decisions. Focus on analyzing the reasons for the liquidation and developing a rational plan for recovery.

6. Seek Professional Advice (Optional)

If the financial impact of the liquidation is significant or if you are experiencing emotional distress, consider seeking guidance from a finance professional or mental health counselor. They can provide objective advice and support during this challenging time.

7. Evaluate Alternative Trading Options

Explore other trading instruments or strategies with lower leverage requirements, such as spot trading or lower leverage futures. Avoid panic selling or overtrading in an attempt to recoup losses quickly.