@citterxbt

Liquidation occurs when the market moves against a leveraged position beyond the collateral's ability to cover the loss. Think of a trade position as a balloon and leverage as the air pump. Leverage acts as a multiplier on capital, expanding the size of the trade significantly. However, this expansion comes at a cost. As the position grows, the distance between the entry price and the liquidation price contracts. This animation demonstrates how standard market volatility interacts with over-leveraged positions to trigger a forced closure. It serves as a reminder that risk management is the primary skill required for longevity in the markets. @avantisfinance @baseapp.base.eth

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