What to do if Kraken contract is liquidated

If your Kraken contract is liquidated, stay calm, review your trading strategy, assess your losses, and contact Kraken support if necessary.

Nov 10, 2024 at 11:07 pm

What to Do If Your Kraken Contract Is Liquidated

Liquidation is a critical event that can occur when trading futures or other leveraged financial instruments. It occurs when the value of your position falls below a certain level, known as the liquidation price. When this happens, the exchange will forcibly close your position and sell your assets to cover the losses.

This can be a devastating event, but there are steps you can take to minimize the damage and recover from the loss. Here's what you need to do if your Kraken contract is liquidated:

• 1. Stay Calm

It's understandable to feel overwhelmed after a liquidation, but it's important to stay calm and collected. This will help you make rational decisions and avoid further losses.

• 2. Review Your Trading Strategy
  Take time to review your trading strategy and identify what went wrong. Were you overleveraged? Did you enter the trade at an inopportune time? Understanding your mistakes will help you avoid them in the future.
• 3. Assess Your Losses
  Calculate the total amount of losses you have incurred as a result of the liquidation. This includes both the initial margin and any unrealized profits. Understanding your losses will help you make informed decisions about how to proceed.
• 4. Contact Kraken Support
  If you believe that your liquidation was caused by an error on Kraken's part, do not hesitate to contact their support team. They may be able to assist you in recovering your losses.
• 5. Re-Evaluate Your Risk Tolerance
  Liquidation is a reminder that leverage can be a double-edged sword. Re-evaluate your risk tolerance and adjust your trading strategy accordingly.
• 6. Learn from Your Mistakes
  Every loss is an opportunity to learn and improve. Take time to analyze what went wrong and develop a plan to avoid similar situations in the future.
• 7. Don't Give Up
  Liquidation can be a setback, but it doesn't have to end your trading career. Learn from your mistakes, adjust your strategy, and come back stronger.