Topic: Having reserved fund in funding wallet best way to protect your trading position - page 2. (Read 265 times)

Your plan works only on cross-margin mode it won't work on isolated margin. If you simply want to avoid liquidation, use the stop loss to reduce your losses rather than holding your trading position for an extended period of time because we do not know how long it will recover, and if you continue to hold that position and fund your account, your losses will be huge until you run out of funds and your account might end up liquidated.

So, for me, better set a stop-loss in this case while you are using high leverage. I tried to be liquidated, and all my other trading on spot trading is gone in cross-margin mode. That is why I continue to use stop loss to avoid further losses.

Bitcoin is definitely the way to go, my bitcoin is at binance staking right now, it doesn't give much return, last I remember it was something like %2 or even lower if I am not wrong, but it's better than zero so I keep it there instead of trading with it. I believe that is going to be the way what we are seeing and what we should be considering this to be growing to be a bigger and we could profit so much from it.

When it comes to shitcoins, I am not against them and I believe they have a purpose to play in the crypto world as well, while we may not like them, we can't argue they are useless neither. The individual shitcoin could be useless and terrible, because in that situation you are looking at just one of them, but the concept of shitcoin, as in thousands of them even tens of thousands of them, when combined, has a value in crypto world. What value is that? It's the idea that bitcoin may not give you 100x return, but something else might, so make a x2 profit with bitcoin and then chase x100 with your profit.

This is a risk management strategy that I think works perfectly for people because other than you just simply protecting your position if the asset is not even on the exchange it is also a good way to safeguard your funds but if it is on the wallet it is simply just to move some back to the spot or funding wallet on the same exchange and then add from their when liquidation looms. Another way some people protect their capital is through using isolated margin where they only add positions when the market is facing liquidation, but this isn’t as smooth as the other way.

When you have your capital separated you avoid the risk of losing all when an unknown or sniper liquidation occurs. For me I use cross margin with my funds intact but my stop loss is certainly at a position where I can afford the loss that comes when hits and I can’t get liquidated without the stop loss been triggered

The more margin you have in your account, the further away the liquidation point will be from your position. But it must be remembered that there may be unforeseen situations in the market, which may lead to a dump. In this case, not only your position will be liquidated, but also the entire deposit that you held to maintain the position. So in any case, do not forget to set a stop loss.

Very clear analysis there, and born out of long term trading experience, having $2500 total capital and risking $500 on the 10x trading position is somewhat a cool attempts that keeps the far away from liquidation since at list the $2000 set aside fund's will go a long way to protect the position and if the assets is good like bitcoin for example, the trader will be in the best and safest trading zone, that will lower his or her risk to it bearest minimum within the trading period.

Some traders are doing it.

Example is a trader that has $2500 for trading. He can keep $2000 in his wallet and trade with $500 and use it to open 10x position. If he sees that it is getting up to liquidation price, he may decide to fund it more with extra $500 and so on. The $2500 means the trader only have plan of using 2x leverage which is $5000.

I don't know if this topic have been discussed over here before, if it has, please point my attention to it and I will have the thread deleted at once, but until then I just say I should bring up this discussion for those deravative trader's who risk higher with high leverage that is at least 10x and above, please avoid comments if your views is about how to trade with low leverage and warning of trading with small amount.
Back to the point of view!

How do you think about having some extra reserved fund to protect your trading position when it near liquidation, because from what I have discovered on deravative trading position most especially when you rolling on high leverage and opening the position with large amount of USDT, but along the line because of sharp market drop in you position you forced to get liquidated there by incurring loses which is the reason why many think that trading is risky and full of loses.

So what about in other to prevent the above event from happening what about reserving extra funds aside from your trading capital to act as a protecting shild from liquidation, this way you protect your assets entry point and Capital from total liquidation.

Please Note this is not applicable to shit coins, but only on bitcoin because only bitcoin is what is stable enough that don't get dumped to Zero like some altcoins does.