The world of crypto trading can be very lucrative, but it is also fraught with risk. For beginners, terms like 'liquidation' and 'bankruptcy' can sound daunting and confusing. Don't worry! This article will explain the differences in easy-to-understand language, so you can trade with more confidence.
What Is Liquidation Price? 💸
Imagine you borrow money to buy cryptocurrency (this is called margin trading or futures). To ensure you can pay back the loan, the crypto exchange platform requires you to provide a certain amount of collateral (called margin).