How Does ‘Position Sizing’ Relate to Avoiding Hard Liquidation?

Responsible position sizing is a core risk management technique that directly relates to avoiding hard liquidation. By only using a small portion of one's capital for a trade and choosing lower leverage, a trader ensures that the liquidation price is far away from the current market price.

Smaller, appropriately leveraged positions create a wider buffer against volatility, making it much less likely that the maintenance margin will be breached and a hard liquidation will occur.