Introduction

Engaging in leveraged futures trading carries an inherent obligation:participants need to preserve sufficient capital within their accountmargin to maintain active positions. When a trader's equity balancefails to meet the exchange-mandated maintenance margin threshold, the automatic liquidation process is initiated. Control of some (or all) of the position shifts to the exchange, to unwind the exposed position.

Depending upon the exchange's liquidation engine, the position will unwound in stages or as a single closure. These forced closures of positions are known as 'Liquidation' events.

Monitoring these Liquidation events, particularly when a large volume occur within a short period of time, can often signify a reversal in price.

Liquidation Elements

Similar to all other market data, MMT monitors all liquidation events across each of our supported futures markets. Separating Long & Short Liquidations, the the cumulative value of each is recorded within each period of time is calculated.

When active upon your chart, the cumulative value of Long Liquidations and Short Liquidations will be displayed on a histogram chart.

By default:

• Long Liquidations are shown in green.
• Short Liquidations are shown in red.

The height of the bar, directly correlates to the value of Liquidations that occurred. The higher the volume of contracts that were liquidated, the higher the bar's height.

⚠️ Liquidation Data Considerations

• Liquidations can only occur within futures markets.
• There is no inherent liquidation events within spot markets, as assets are exchanged immediately upon execution.
• The frequency and speed in which exchanges publish updated Liquidation data varies wildly. Unfortunately MMT has no control over this. Once published by the exchange MMT will register and record the updated value with minimal latency.

Activating Liquidations

To enable to this function/ tool, go to the 'Indicator' tab and select 'Liquidations' from the drop down menu.