WHAT HAPPENS TO LIQUIDATED FUNDS IN CRYPTO TRADING

CucakRowo

hero member

Activity: 994

Merit: 593

aka JAGEND.

Consolidating and get liquidated (rekt) has a different meaning. Consolidating happens in chart, while get liquidated is happens to your capital. Price consolidation can happen when price is in uptrend or downtrend (more technical analysis taste). While get liquidated can happens every seconds.

Conclusion that i can drew from "story" that you wrote in this thread, at this time there is a possibility that your capital is going into a liquidation phase (get rekt). It is possible that you use high leverage but you are not preparing for the worse scenario possibilities that can occur.
The risk when you do trade in futures/margin market will be different when you trade in the spot market.

Answering your question.

Quote from: BayAngelo on August 02, 2020, 06:29:40 AM

FUNDS THAT WERE LOST DURING TRADING, MOST ESPECIALLY When prices drop goes where?

Money will switch ownership. When you experience a loss, your (fund) loss will turn into profit (fund) for some traders. The profit earned by the broker (exchange) is limited only to trading fees and withdrawal activities. When you did buy or sell, there are fees charged. Same as withdrawal, there's a fees must be paid when you want to withdraw your funds.

Some suggestion, please read what Tytanowy Janusz wrote (above my current post) :

Quote from: Tytanowy Janusz on August 02, 2020, 07:20:03 AM

First of all
I don't want to be mean but i think that i must say that to save your money. Your knowledge about how market works is very low. If you think about trading with leverage than stop it and educate yourself. You have lots to know before first trade.

Tytanowy Janusz

legendary

Activity: 2156

Merit: 1622

First of all
I don't want to be mean but i think that i must say that to save your money. Your knowledge about how market works is very low. If you think about trading with leverage than stop it and educate yourself. You have lots to know before first trade.

Now back to your question:
When you open leveraged position you are investing with not your money and your money act as collateral. When trade is not going how it should and your expected loss is getting to close to your collateral value than exchange is forced to close your position (that's called liquidation). And cover loses with money from collateral. The leftovers are either send back to trader or left in exchange (depends on exchange policy - mostly risk managment).

Putting that into example (simple version):
1 - you open a trade with 10x leverage worth 1 BTC (0.1 BTC is yours, 0.9 BTC is "borrowed from exchange")
2- price dumped 10%. Your position is worth 0.9 BTC
3- exchange is forced to close this position and create 0.9 BTC sell order. Takes 0.9 BTC (amount that you borrowed) and leaves you with 0

0.9 BTC is the about that was liquidated and that's the amount that you hear of during bull/bear runs

BayAngelo

member

Activity: 882

Merit: 17

Every now and then, accounts get liquidated in cryptocurrencey trading. this happens whenever there is a sudden bull market and when price drop suddenly, funds are liquidated. most people called it Consolidating.
I wish to ask, what happens to the funds that was liquidated in such situation. the trading platform collects it OR it is won by other accounts that was not liquidated.
i need answers please. FUNDS THAT WERE LOST DURING TRADING, MOST ESPECIALLY When prices drop goes where?

Topic: WHAT HAPPENS TO LIQUIDATED FUNDS IN CRYPTO TRADING (Read 108 times)