Can You Change Liquidation Price After Entry?
45sDirectly answers a common trader question with a surprising 'yes', making viewers curious to learn how.
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This video demonstrates how to manage margin in crypto futures trading on the Mudrex platform. It explains how to add or decrease margin on an existing position, and how this affects the liquidation price. The tutorial also covers adjusting leverage and the associated risks.
Chapters
[00:02]
Liquidation Price is Set
When an order is placed, a liquidation price is set in the opposite direction. The trader can work out their liquidation price after taking the order.
[00:17]
Example of Liquidation Price
The pair is trading at $1.1049 and the liquidation price is $0.995. The liquidation price is not fixed and can be moved.
[00:32]
Moving Liquidation Price
By moving the liquidation price further below 0.99, the chances of the order getting liquidated will reduce.
[00:47]
Adding Margin via Pencil Icon
Clicking on the pencil icon allows the trader to increase the add margin and decide how much more amount from the IAR wallet to add to the margin of the order.
[01:01]
Calculating New Liquidation Price
Sliding the bar to 100% and clicking on 'Calculate Liquidation Price' changes the liquidation price from 0.99 to 0.94.
[01:17]
Effect of Adding Margin
Adding margin brings down the liquidation price by putting more margin into the order. This reduces the chances of losing the entire amount placed on margin.
[01:33]
Decrease Margin Option
Inside Mudrex, there is also an option to decrease margin. This allows the trader to take back some of the margin from an existing executed order.
[01:47]
Effect of Decreasing Margin
Decreasing margin brings the liquidation price closer to the current price. The trader can withdraw the margin they have given.
[02:02]
Risk of Adding Margin
If the trader keeps adding margin and the pair keeps going down, the order gets liquidated at the end of the day. If the pair crosses the liquidation price, the trader loses all the margin given.
[02:27]
Adjusting Leverage
The trader can also reduce the leverage (e.g., from 10x) and play around with it if they want.
The video provides a clear, step-by-step guide on how to adjust margin and leverage in Mudrex futures trading. The key takeaway is that adding margin lowers the liquidation price, reducing risk, but also increases potential losses if the market moves against you.
Mentioned in this Video
Tutorial Checklist
1
00:02
Place an order in crypto futures trading on Mudrex. The liquidation price is set automatically.
3
00:47
In the 'Add Margin' section, slide the bar to increase the margin from your IAR wallet (e.g., to 100%).
4
01:01
Click 'Calculate Liquidation Price' to see the updated liquidation price (e.g., from 0.99 to 0.94).
5
01:33
To reduce margin, use the 'Decrease Margin' option to withdraw margin from an executed order, which brings the liquidation price closer to the current price.
Study Flashcards (5)
What is the effect of adding margin to a futures order?
easy
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What is the effect of adding margin to a futures order?
easy
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Adding margin brings down the liquidation price, reducing the chances of losing the entire amount placed on margin.
01:17
What happens if the pair crosses the liquidation price after adding margin?
medium
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What happens if the pair crosses the liquidation price after adding margin?
medium
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The order gets liquidated and you lose all the margin you have given, including the added margin.
02:14
What is the effect of decreasing margin on the liquidation price?
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What is the effect of decreasing margin on the liquidation price?
medium
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Decreasing margin brings the liquidation price closer to the current market price.
01:47
How can you adjust the liquidation price in Mudrex?
easy
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How can you adjust the liquidation price in Mudrex?
easy
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By clicking the pencil icon and adding or decreasing margin, or by adjusting leverage.
00:47
What is the example liquidation price given in the video?
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What is the example liquidation price given in the video?
easy
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The pair is trading at $1.1049 and the liquidation price is $0.995.
00:17
💡 Key Takeaways
🔧
Adding Margin Lowers Liquidation Price
This is the core technique for managing risk in futures trading, directly impacting the liquidation threshold.
01:17
⚖️
Risk of Adding Margin
It highlights the critical risk that adding margin does not eliminate the possibility of liquidation; it only moves the threshold.
02:14
🔧
Decrease Margin Option
Shows a less-known feature that allows traders to reduce their exposure and adjust their liquidation price.
01:33Full Transcript
[00:00] मुद्रेक्स में आपने crypto futures trading का order place किया, order place होते ही वहाँ पर एक liquidation price set हो जाता है opposite direction में, तो क्या ऐसा possible है कि मैंने order ले लिया है, उसके बाद मैं अपने liquidation price को दूर कर सकूं, तो हाँ ये possible है, ये देखिए कैसे, तो अभी ये चल रहा है 1.1049 dollar का ये pair, और मेरा liquidation price है ये, 0.9995
[00:30] लोगों को यह लगेगा कि यह तो लिक्विडेशन प्राइस फिक्स हो गया अब इसको मैं थोड़ी खिसका सकता हूं अगर मैं चाहूं इसको और खिश काके 0.99 से खिसका के नीचे ले आओं तो मेरे ऑर्डर के लिक्विडेट होने का चांस कम हो
[00:42] तो ऐसा मैं कर सकता हूँ यहाँ पर यह जो pencil का आइकन है इसके उपर click करके add margin यह जो है न इसके उपर मैं यहाँ बढ़ाके जो मेरा INR wallet होगा उसमें से कितना और amount
[00:55] मैं इस order के margin में add कर सकता हूँ वो मैं यहाँ पर कर पाऊंगा यह देखिए इस बार को मैं स्लाइड करूंगा यहां पर मैंने जैसे इसको 100% कर दिया calculate liquidation price को click करूं तो 0.99 से 0.94 हो गया तो margin add करने से margin और ज़्यादा order में डाल देने से आपका liquidation price नीचे आ जाएगा
[01:17] order automatically liquidate chance margin pay order time loss chance वो कम हो जाएगा
[01:29] तो mudrex के अंदर add margin का option भी होता है और इसके बगल में ही decrease margin भी होता है तो जितना मैंने यहाँ पर margin दिया था मैं उसमें से थोड़ा margin वापस ले सकता हूँ मतलब मेरे existing order से
[01:43] order है market में executed order है उसके अंदर से मैं margin बाहर निकाल सकता हूँ decrease margin के इस option को use करके जिससे की liquidation price मेरा जो अभी है उसका और करीब आ जाएगा
[01:56] अब मैं margin जो दे रखा है उसको भी निकाल लूँगा उसमें से थोड़ी बहुत quantity निकाल लूँगा तो obviously मेरा liquidation price करीब आ जाएगा लेकिन एक बात आपको ध्यान रखनी है अगर मैं यहाँ पर margin add करता जाता हूँ
[02:08] और फिर भी pair नीचे जाता ही चला जाता है तो मेरा यहाँ पर पूरे जो margin add होने के बाद जो मैंने initially दिया था वो भी और जो add करता जा रहा हूँ वो भी यह सारे margin का मुझे यहाँ पर loss हो सकता है
[02:22] ठीक है अगर liquidate at the end of the day अगर order liquidate हो ही गया मतलब यह XRP का pair liquidation price को cross कर ही गया तो फिर मुझे जितना भी margin दिया होगा उसका सबका loss हो जाएगा
[02:34] बाकि यहाँ पर आपका जो leverage है न 10x मैंने leverage लिया था मैं leverage को भी यहाँ पर कम कर सकता हूँ ठीक है leverage के साथ भी छेड़ छाड़ कर सकता हूँ अगर मैं चाहूँ तो
