How to Calculate Your Liquidation Price (Futures Survival Guide)

If you trade futures or use leverage, “liquidation” is the word you must understand before you open any position. It’s the point where the exchange force-closes your trade and your margin is wiped out. This guide explains what your liquidation price depends on, why higher leverage is so dangerous, and how to keep a safe buffer so you don’t get force-closed.

What is liquidation and why it happens

When you open a leveraged position, you use a small amount of margin to control a much larger position. If the market moves against you enough that your loss nearly eats your posted margin, the exchange automatically closes the position so you can’t go more negative than the money you put up. That price is your liquidation price — and when you hit it you lose almost all of your margin (including fees), not just the loss from the price move itself.

The simple intuition: higher leverage sits closer to your entry

Your liquidation price depends on three things: your entry price, your leverage, and the maintenance margin the exchange requires. The key rule to remember is that the higher your leverage, the closer your liquidation price sits to your entry price — so a tiny move can wipe you out.

• 2x leverage — the price has to move roughly ~50% against you before liquidation (plenty of breathing room).
• 10x leverage — a move of only ~10% against you liquidates you, and crypto swinging 10% in a single day is completely normal.
• 20x leverage — a mere ~5% adverse move wipes you out.

These numbers are approximate, meant to give you the intuition. The exact figures shift slightly with maintenance margin and fees. To get an accurate liquidation price for your own trade, plug your entry price, leverage, and direction into the Liquidation Price Calculator and see exactly where the danger zone is before you commit real money.

How to protect yourself from getting liquidated

• Use lower leverage — this is the single most effective thing you can do. Lower leverage pushes your liquidation price further away. Beginners should start at 2-3x or avoid leverage entirely. Learn more in What is leverage.
• Always set a stop-loss above your liquidation price — place your exit before the force-close point so you leave with a controlled loss instead of waiting to be liquidated.
• Keep a margin buffer— don’t max out your margin. Leave room to add margin if the price swings temporarily.
• Size positions small— keep each position small enough that even a liquidation won’t hurt your overall portfolio. Read more in crypto risk management.

Fees and choosing an exchange

Fees eat into profit and pull your liquidation price slightly closer. If you trade in Thailand, Binance TH charges 0.10% on crypto pairs (0.25% on THB pairs), while Bitkub charges 0.25%. Both are Thai SEC licensed and support free THB deposits via PromptPay QR. Compare their fees and promotions on the exchange comparison page.

⚠️ Futures and leverage are extremely high-risk products that can wipe your entire margin very fast. Beginners should be very cautious or avoid them entirely. This article is for education only and is not investment advice.