What Is the Visual Indicator an Exchange Might Use to Show a Trader’s ADL Risk Level?
Many crypto futures exchanges use a visual ADL indicator, often represented by a series of lights, bars, or a numerical ranking. This indicator shows the trader's position in the ADL queue relative to other profitable traders.
A higher number or more "lit" bars means the trader is closer to being auto-deleveraged if the insurance fund fails. This allows traders to manage their risk by reducing leverage or profit before they are forcibly closed.
Glossar
Adl Indicator
Signal ⎊ An Adl Indicator functions as a quantifiable metric derived from market microstructure data, designed to provide an early signal regarding potential liquidity stress or impending margin calls across derivative books.
ADL Risk Level
Exposure ⎊ Assessing ADL Risk Level within cryptocurrency, options, and derivatives necessitates quantifying potential losses stemming from adverse price movements or counterparty default.
Visual Indicator
Chart ⎊ Visual indicators, within cryptocurrency, options, and derivatives markets, frequently manifest as graphical representations of data, providing a readily interpretable overview of price action, volume, and other relevant metrics.