Forced Liquidation
Forced liquidation occurs when a trading platform takes action to reduce or close a leveraged position because it no longer satisfies required margin conditions.
Why it matters to you
A normal exit is controlled by the trader. A forced liquidation is controlled by the platform's risk system. This distinction matters because the trader may lose control over the timing and execution of the exit and may also incur liquidation related fees or additional losses depending on the platform.
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