How to avoid liquidation on KuCoin Futures?

To avoid liquidation on KuCoin Futures, use lower leverage, set strategic stop-loss orders, monitor your margin ratio, and choose isolated margin mode for better risk control.

Aug 03, 2025 at 05:56 pm

Understanding Liquidation in KuCoin Futures

Liquidation on KuCoin Futures occurs when your position can no longer cover the required margin due to adverse price movements. This results in the automatic closure of your position by the system to prevent further losses. The key trigger is when your maintenance margin falls below the required threshold. This threshold varies depending on your leverage and the asset you're trading. For example, a position with 10x leverage on BTC/USDT will have a different liquidation price than one with 50x leverage. Understanding how liquidation price is calculated—based on entry price, leverage, fees, and funding rates—is essential to avoid unexpected closures.

Use Appropriate Leverage

High leverage may amplify profits, but it also increases the risk of liquidation. On KuCoin Futures, leverage options range from 1x to 125x. If you're new to futures trading, it's safer to start with leverage below 10x. For instance, if you open a $1,000 position with 50x leverage, a 2% move against you could trigger liquidation. By contrast, the same position with 5x leverage would require a 20% adverse move to liquidate. Always assess your risk tolerance and account balance before selecting leverage. KuCoin allows you to adjust leverage per position directly in the trading interface—look for the leverage selector near the order form.

Set Stop-Loss Orders Strategically

A stop-loss order is your first line of defense against sudden price swings. On KuCoin, you can set a stop-loss when placing a new futures order or modify an existing position. Here’s how to do it step by step:

• Click on the "Stop-Loss/Take-Profit" section in the order panel
• Enter a price level that limits your maximum acceptable loss
• Choose between "Limit" or "Market" execution type—Market ensures immediate closure if the price hits your stop level
• Confirm the order and monitor via the "Positions" tab
  This feature helps you exit before reaching the liquidation price, preserving more of your margin. Never trade without a stop-loss if you can’t actively monitor the market.
  

  Monitor Your Margin Ratio

  
  KuCoin displays your margin ratio in real time under the "Positions" tab. This ratio indicates how close your position is to liquidation. A margin ratio of 10% means you’re 90% away from liquidation. If this number drops below 5%, consider adding margin or reducing position size immediately. To add margin:
• Go to the "Positions" tab
• Find your active position
• Click "Add Margin" and enter the USDT or coin amount
• Confirm the transaction
  This increases your available margin and pushes the liquidation price further from the current market price. Monitoring this ratio regularly—especially during volatile periods—is crucial.
  

  Choose Isolated Margin Mode Over Cross Margin

  
  KuCoin offers two margin modes: Isolated and Cross. In Isolated mode, each position has its own dedicated margin, meaning one losing trade won’t affect others. In Cross mode, all positions share your total account balance as margin—which can lead to cascading liquidations if one position moves sharply against you. To switch:
• Before placing a trade, click the margin mode toggle (usually near leverage)
• Select "Isolated"
• Set your initial margin amount manually
  This gives you finer control and prevents one bad trade from wiping out your entire portfolio. Experienced traders often use Isolated mode for better risk segmentation.
  

  Watch Funding Rates and Timing

  
  Funding rates on KuCoin Futures are charged or paid every 8 hours and can impact your position’s profitability—or push it closer to liquidation. If you hold a long position during a period of high positive funding rates, you’ll pay fees that eat into your margin. To avoid surprises:
• Check the funding rate indicator on the trading page—it shows the next payment time and rate
• Avoid opening large positions just before funding time (00:00, 08:00, 16:00 UTC)
• Use the "Funding History" tab to analyze past rates for your asset
  This is especially critical for perpetual contracts, where frequent funding can erode your margin over time.
  

  Frequently Asked Questions

  Q: Can I receive a liquidation warning on KuCoin?
  
  Yes. KuCoin sends real-time notifications via email and in-app alerts when your margin ratio drops below 10%. These warnings give you time to act—add margin, reduce position size, or set a stop-loss.

  Q: What happens to my funds after liquidation?
  
  After liquidation, any remaining margin is returned to your futures wallet. KuCoin uses an Auto-Deleveraging (ADL) system only if the insurance fund is insufficient—this is rare for small positions.

  Q: Does using a higher initial margin reduce liquidation risk?
  
  Absolutely. Increasing your initial margin lowers leverage automatically and moves your liquidation price further from the market price. For example, a $200 margin on a $1,000 position is 5x leverage; $500 margin on the same position is 2x leverage.

  Q: Can I avoid liquidation by switching to a stablecoin pair?
  
  Stablecoin pairs like BTC/USDT tend to be less volatile than altcoin pairs, reducing the chance of sudden price moves triggering liquidation. However, leverage and margin management still apply—volatility can still occur during major news events.