Dear BTCEX Users,
In the fast-paced world of crypto trading, high-risk leverage trading has become the norm. Although it has the potential for massive profits, it also comes with the risk of losing all your investments in a single trade. This makes it challenging for some traders, who may not have the financial resources to compete with market whales. That's why BTCEX is introducing auto-deleveraging, a game-changing algorithm, to level the playing field and empower traders of all sizes.
Auto-deleveraging (ADL) is a simple and effective solution that prevents traders from losing more than they invested. It works by automatically liquidating a trader's position if their account balance falls below the margin requirement. This ensures that the trader's losses are limited to the amount they invested and prevents them from going into full bankruptcy.
The algorithm also takes into account market conditions and asset volatility. In highly volatile markets, it will be more aggressive in deleveraging positions to prevent traders from losing more than they invested, while in less volatile markets, it will be less aggressive, giving traders more time to adjust their positions.
By introducing the auto-deleveraging algorithm, both traders and the exchange can benefit from a win-win situation. For traders, it eliminates the risk of losing more than they can afford and protects their investments. For the exchange, it reduces the risk of traders defaulting on their loans and ensures that the exchange's funds are protected.
The algorithm works by monitoring the margin level of all traders’ accounts in real-time. If the margin level falls below the minimum requirement, the algorithm will automatically start to deleverage the trader's position by closing their open positions one by one until the margin level is restored. The algorithm will continue to deleverage until the margin level is above the minimum requirement. However, please note that the position’s counterpart may consequently be liquidated if the insurance fund cannot accept the bankrupt user’s positions.
At BTCEX, we strive to provide the best possible user experience, and we are doing our utmost to ensure that the triggering of auto-deleveraging is kept to an absolute minimum.
In conclusion, auto-deleveraging is a game-changer for traders in the world of high-risk leverage trading. It offers a level of protection that was previously unavailable and reduces the risk of traders getting into debt. It is a win-win for both the trader and the exchange and is a step towards creating a fairer and more transparent trading environment.
We will be releasing more technical details soon. The automatic forced liquidation function for perpetual contract trading is expected to be launched this Friday. Stay tuned for further updates.
Thanks for your support!
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