Leverage and Liquidation
Understand how leverage works on Dexly and how to manage your margin to avoid liquidations.
Key takeaways
- Leverage multiplies both profit and loss: with 10x leverage a 1% price move equals a 10% change on your margin, and Dexly supports up to 50x on majors like BTC and ETH.
- Isolated margin caps risk to the margin allocated to a single trade, while cross margin uses your whole balance as collateral for a lower liquidation price but greater exposure.
- Liquidation triggers when your account value falls below the maintenance margin requirement; the protocol auto-closes the position and charges a fee to reward liquidators.
- You can lower your liquidation price at any time by adding margin or adjusting leverage, and a stop-loss is the core tool for limiting downside.
How Leverage Works
Leverage allows you to trade with more money than you actually have in your account. For example, with 10x leverage, a $1,000 deposit allows you to open a $10,000 position.
Simplified Math
Isolated vs. Cross Margin
Dexly offers two ways to manage your risk:
- Isolated Margin: Risk is limited to the specific margin you allocated to that single trade. If one position reaches its liquidation price, only that position is closed.
- Cross Margin: Your entire account balance acts as collateral. This provides a lower liquidation price for individual positions but risks your entire balance.
| Feature | Isolated | Cross |
|---|---|---|
| Collateral | Specific amount | Full balance |
| Liquidation Risk | Single position | Entire account |
| Best For | High leverage | Portfolio hedging |
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What is Liquidation?
Liquidation happens when your account no longer has enough margin to cover the losses of your open positions.
Automated Safety
Risk Management Tips
Successful traders don't just pick winners; they manage losers. Here is a checklist to help you stay in the game:
Use Stop-Loss
Never enter a trade without a predefined exit point for losses.
Start Small
Begin with 2x-5x leverage until you master the platform.
Monitor Margin
Keep an eye on your Margin Ratio in the dashboard stats.
Add Collateral
In isolated mode, you can add margin to a losing trade to lower liquidation.
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Related topics
Keep Learning
Risk Warning: Trading perpetual futures involves significant risk of loss. Only trade with capital you can afford to lose. Dexly is a non-custodial interface; you are responsible for your own funds and trading decisions.
Frequently Asked Questions
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