Since Trade8 uses an isolated margin system, each position's liquidation price is known ahead of time. You can see an order or position's liquidation price in its Details panel.
A position is liquidated when it loses 80%.
Liquidation Price Formula
You can easily calculate the liquidation price of any order, or before placing an order. The liquidation price is the price at which the market moves against your position by 80% divided by the leverage used for that position.
For example, for a long position at 10x leverage, liquidation occurs when the market drops by 80% / 10 = 8%.
You have the following buy position on EUR/USD:
- Size: 100 BTC
- Leverage: 100x
- Entry price: 1.12
- Margin: 1 BTC
Your liquidation price is the price at which your position loses 80% of its 1 BTC margin = 0.8 BTC. Since it's a 100 BTC position, it will lose 0.8 BTC when price drops 0.8% from your entry price. So the position's liquidation price is 1.11104.
1.12 * (1 - 0.8%) = 1.11104
When your position is liquidated, it loses 100% of its margin. In the above example, you would lose 1 BTC if your liquidation price is hit. The 20% difference from the 80% loss trigger price is used as safety risk measure for fast-moving markets.