Liquidation refers to the situation where the customer's equity in the investor's margin account becomes negative under certain special conditions. Liquidation means that the loss is greater than the margin in your account. The remaining funds after liquidation by the company are the total funds minus your losses, and there is usually a portion left.

When the market conditions undergo major changes, if most of the funds in the investor's margin account are occupied by trading margin, and the trading direction is opposite to the market trend, due to the leverage effect of margin trading, It's easy to get liquidated. If the liquidation results in a shortfall and it is caused by the investor, the investor needs to make up the shortfall, otherwise he or she will face legal recourse.

Extended information:

Forex trading liquidation refers to the situation where the customer's equity in the investor's margin account becomes negative under certain special conditions.

When the market conditions undergo major changes, if most of the funds in the investor's margin account are occupied by trading margin, and the trading direction is opposite to the market trend, due to the leverage effect of margin trading, It's easy to get liquidated. If the liquidation results in a shortfall and it is caused by the investor, the investor needs to make up the shortfall, otherwise he or she will face legal recourse.

Avoid liquidation

When liquidation occurs, investors need to make up their losses, otherwise they will face legal recourse. In order to avoid this situation from happening, it is necessary to control the position carefully and avoid operating with a full position like stock trading. And the market trends should be tracked in a timely manner, and you cannot buy them all at once like stock trading.

Reference: Baidu Encyclopedia-Liquidation