Forced liquidation means that when the trading margin of members or customers of a futures exchange is insufficient and not replenished within the specified time, or when the positions of members or customers exceed the specified limit, or when members or customers violate the rules, the exchange implements forced liquidation to prevent the risk from further expanding.

Measures to prevent forced liquidation and warehouse explosion: As for the rules of warehouse explosion, when the prepayment ratio is less than or equal to 100%, warehouse explosion will occur, so the larger the prepayment ratio, the safer it will be.

Extended data:

Cause analysis of warehouse explosion;

1, frequent heavy warehouse operation

One of the characteristics of foreign exchange trading is high leverage, which can even be as high as several hundred times. If you choose high leverage and heavy positions, you may earn more profits in a short time, but by the same token, once you operate carelessly or encounter relatively volatile market bands, you may also explode positions in a short time.

This situation is generally caused by traders' quick success and instant benefit. You can take light warehouse operation and spread the risk evenly for many times, which can effectively avoid warehouse explosion.

2. Stubborn

Many traders, due to their personal personality, did not close their positions in time when they were in danger, but held a lucky attitude, knowing that there were tigers in the mountains and leaning towards the tiger mountain. This stubborn attitude is stupid in the foreign exchange market. Trading is nothing more than trying to make money in the foreign exchange market. If it doesn't work this time, we can wait until next time, which is undoubtedly a waste of money.

3. No stop loss

No stop loss point is set before trading or the stop loss operation is not strictly carried out during trading, which may lead to short positions. This is also a cliche, and its importance is self-evident. You can also combine stop loss with position management and use technical conditions to stop loss.

4. Day trading

I think that with the idea of making a profit or winning back a loss, you will operate at will when you see possible trading opportunities, so the probability of encountering a crisis will greatly increase, and the possibility of opening a position has been increasing. Generally speaking, it is wisest for us to come out resolutely after three failed transactions.

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