How to Control Position Risk in BYDFi Perpetual Contracts (PC)

BYDFi

2025-11-28 · Updated

In cryptocurrency trading, effective position risk management is one of the keys to success. By applying the right strategies, traders can protect their capital and reduce potential losses.

What Is Position Risk?

Position risk refers to the potential losses a trade may face when the market moves in an unfavorable direction. Key factors include:

Position size: The larger the position, the higher the risk.
Leverage ratio: Higher leverage magnifies both potential gains and potential losses.
Market volatility: Rapid price changes have a direct impact on open positions.

Key Strategies to Control Position Risk

1. Set Stop-Loss Orders

A stop-loss order automatically closes a position once the price reaches a preset level, ensuring losses remain within an acceptable range.

2. Manage Position Size

Always size your trades according to your personal risk tolerance to avoid overexposing your account.

3. Diversify Investments

Avoid allocating all funds into a single asset or trade. Diversification helps spread risk across different markets and reduces the impact of one position.

4. Use Leverage Cautiously

While leverage can increase returns, it also amplifies losses. Keep leverage at a reasonable level, especially in highly volatile markets.

5. Monitor Market Conditions

Regularly evaluate market volatility, liquidity, and upcoming news or events. These factors can significantly impact price movements and position risk.

Risk Management Features in BYDFi Perpetual Contracts (PC)

🔹 Add Margin

On the Positions page, you can manually add margin to lower leverage and adjust the liquidation price. 👉 Learn more here: Add Margin in Perpetual Contracts

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🔹 Modify Stop-Loss Price

On the Perpetual Contracts trading page, you can directly edit the stop-loss level.
The default stop-loss ratio is 100%. 👉 Learn more here: Stop-Loss Triggers: Mark Price vs. Last Price

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⚠️ Disclaimer: This content is for educational purposes only and does not constitute investment advice. Please evaluate carefully before making any trading decisions.