📭Multiple Open Positions

In leveraged trading, concurrently opening dual positions on the same asset binds their risk profiles, especially in liquidation scenarios. If the asset's price movement hits the liquidation margin for one, it initiates a domino effect, triggering liquidation for both trades. Conversely, a positive price trend benefits both positions proportionately.

Imagine a scenario where a trader engages in two leveraged positions on an identical asset, each characterized by its leverage ratio, position size, and specific liquidation threshold. Due to their common underlying asset, these trades are inherently correlated. A price movement adverse enough to reach the liquidation point of one trade will precipitate the liquidation of both, amplifying the risk.

To strategically counterbalance this risk, traders can diversify across different asset classes or adjust their leverage ratios and position sizes judiciously. Additionally, setting precise stop-loss orders and actively monitoring them becomes critical to mitigate the potential for substantial losses during negative market trends.