{"format":"opendoc-document","version":1,"url":"https://docs.upscale.trade/trading-mechanics/liquidations","title":"Liquidations","description":"What liquidation is, how to read the position health indicator and how to avoid forced closure","kind":"article","locale":"en","inLanguage":"en","lastModified":"2026-10-20T11:41:17+03:00","revision":"24e7104bc65d62f5a887ca43715ae3941324f712355db86cc6cc0c9895024fda","section":{"title":"Documentation","url":"https://docs.upscale.trade"},"representations":{"html":"https://docs.upscale.trade/trading-mechanics/liquidations","markdown":"https://docs.upscale.trade/trading-mechanics/liquidations.md","json":"https://docs.upscale.trade/trading-mechanics/liquidations.json"},"translations":{"en":"https://docs.upscale.trade/trading-mechanics/liquidations","ru":"https://docs.upscale.trade/ru/torgovye-mekhaniki/likvidacii","es":"https://docs.upscale.trade/es/mecanica-del-trading/liquidations_es"},"breadcrumbs":[{"title":"What is Prop Trading","url":"https://docs.upscale.trade"},{"title":"Liquidations","url":"https://docs.upscale.trade/trading-mechanics/liquidations"}],"headings":[{"depth":2,"id":"position-health-indicator","title":"Position health indicator"}],"markdown":"---\ntitle: \"Liquidations\"\ndescription: \"What liquidation is, how to read the position health indicator and how to avoid forced closure\"\nicon: triangle-exclamation\npublished: true\n---\n\nLiquidation is the forced closure of a position by the platform when the margin no longer covers the loss. It happens once losses on a trade reach the point where the collateral posted can no longer absorb them.\n\nOnly the margin on that position is at risk: the rest of the funds on the balance are untouched. How the threshold is calculated and what moves the liquidation price is covered on the [Margin Management](Margin_Management.md) page.\n\n## Position health indicator\n\nEach position's state is shown on a colour-coded health bar reflecting how far the margin sits from the liquidation threshold.\n\n| Zone | What it means | What to do |\n|---|---|---|\n| Green | Margin is comfortably above the liquidation threshold and risk is well managed | Nothing, the position is healthy |\n| Yellow | The position is approaching the threshold and the margin buffer is close to the minimum required | Watch the position more closely and add margin if conditions turn unfavourable |\n| Red | The margin buffer is critically thin and the market is close to triggering liquidation | Act immediately: add margin or close part of the position to reduce exposure |\n\n{% hint style=\"info\" %}\nIt is wiser to add margin before a position moves into the yellow zone. Proactive margin management removes the risk of an unexpected liquidation and keeps control of the trade with the trader.\n{% endhint %}\n\nThe higher the [leverage](Positions_and_Leverage.md) chosen, the less price movement it takes for a position to travel through all three zones. A [stop loss](Order_Types.md) set in advance closes the position at a level you choose — before the platform gets there.\n","text":"Liquidation is the forced closure of a position by the platform when the margin no longer covers the loss. It happens once losses on a trade reach the point where the collateral posted can no longer absorb them. Only the margin on that position is at risk: the rest of the funds on the balance are untouched. How the threshold is calculated and what moves the liquidation price is covered on the Margin Management page. Position health indicator Each position's state is shown on a colour coded health bar reflecting how far the margin sits from the liquidation threshold. Zone What it means What to do Green Margin is comfortably above the liquidation threshold and risk is well managed Nothing, the position is healthy Yellow The position is approaching the threshold and the margin buffer is close to the minimum required Watch the position more closely and add margin if conditions turn unfavourable Red The margin buffer is critically thin and the market is close to triggering liquidation Act immediately: add margin or close part of the position to reduce exposure It is wiser to add margin before a position moves into the yellow zone. Proactive margin management removes the risk of an unexpected liquidation and keeps control of the trade with the trader. The higher the leverage chosen, the less price movement it takes for a position to travel through all three zones. A stop loss set in advance closes the position at a level you choose — before the platform gets there."}