Glossary / Risk & costs

Liquidation

An educational concept. Not a signal, not a strategy, and not a trade Josh has taken.

Two pale blocks with a teal glass buffer between them and a blank ice-blue measuring bar beside them.
Illustration of the idea, not a market chart and not a result.

When a venue force-closes a leveraged position because the margin left is too small. It can happen before your stop is reached.

How traders use it: Check that the liquidation price sits well beyond the stop.

Common mistake: Not checking it at all.

Related: Leverage · Stop-loss (stop)

Used in: Position sizing from first principles, Stops, slippage, and gaps: why real losses run larger

See this term in the full glossary · All terms

Concepts only. Education only, not financial advice. No pattern on this site has a published win rate.