The forced closure of a leveraged position when its margin falls below the maintenance requirement.
Last verified 13 September 2026 · written by the DexLadder team
What it means
The forced closure of a leveraged position when its margin falls below the maintenance requirement.
Why it matters when you trade
Liquidation is not a fee, it is the venue protecting itself from your losses becoming its losses. It executes as an aggressive market order, so it fills at the worst available price and adds to the very move that caused it. Clusters of liquidations at obvious levels are why price so often spikes precisely through round numbers before reversing: the move is hunting fuel, and the fuel is other people's stops.
Worked example
A 25x long at 100 has a liquidation price near 96. Price wicks to 95.8, closes the position, then trades back to 103 — the trade was right and the account is still gone.
See it on live markets
DexLadder runs liquidation against live market and pool data, with simulated capital, so you can watch it act on an order instead of reading about it — no account, no wallet, nothing installed.