Liquidation is an automatic closing of the position due to a significant Margin loss.
BTCMEX uses a partial Liquidation process involving automatic reduction of Maintenance Margin to try to avoid a full Liquidation of a trader’s position.
Users on the Lowest Risk Limit tiers
- Any open orders in the contract are cancelled first.
- If it still does not satisfy the Maintenance Margin requirement, the position will be liquidated.
Users on Higher Risk Limit tiers
The Liquidation system attempts to bring a user down to a lower Risk Limit, and thus lower the Margin requirements by:
- Bringing a user down to a Risk Limit associated with open orders and current position.
- Cancelling any open orders and then trying to bring a user down to a Risk Limit associated with their current position.
- Submitting a Fill or Kill order of the difference between the current Risk Limit position size and the position size to satisfy the Margin requirement to avoid Liquidation.
- If the position is still in Liquidation then the entire position is taken over by the Liquidation Engine.
How to adjust Liquidation Price on BTCMEX?
There are advanced trading tools to keep your position open and push the Liquidation Price down (for Long positions) or up (for Short positions).
You can add or remove Margin in the open position settings, but it won’t change the position value. Adding Margin will reduce the Leverage and push away the Liquidation Price. Removing Margin will increase the Leverage and move the Liquidation Price closer to the Mark Price - the trigger for Liquidation.
You can manually Add or Remove Margin by changing the Leverage of your position. You can find the Leverage bar on the left from the Trading Chart on BTCMEX.
That is to say, the higher Leverage a trader is using, the higher chance there is for his position to be liquidated.
Remember that changing your Leverage would also change your Liquidation Price but never your position value.