Quick Guide: Reading Liquidation Levels for Crypto Traders

Understanding liquidation levels is crucial for anyone trading crypto with leverage. Here's how to spot them in 30 seconds:

1. **Locate the liquidation price** - Check your position details or exchange dashboard. This shows exactly where your trade gets force-closed if collateral drops too far.

2. **Calculate your buffer** - Subtract your entry price from liquidation price. The wider this gap, the more room you have for price swings before getting liquidated.

3. **Check liquidation distance** - Most platforms display this as a percentage. Anything below 5% means you're in the danger zone; 10-15% offers comfortable breathing room.

4. **Size matters** - Smaller positions absorb losses better. Oversizing leverage dramatically reduces your liquidation buffer and increases liquidation risk.

5. **Monitor in real-time** - Price movements shift your liquidation level constantly. Keep watching during volatile market conditions.

Pro tip: Always maintain at least 10% buffer between current price and liquidation level. This simple habit separates traders who survive long-term from those who get wiped out. Risk management isn't boring—it's profitable.