Hi everyone. I am having trouble understanding how the margin trading on Coinbase works. If I deposited $10,000, Coinbase gives me another $10,000 to use for trading. What I dont understand is how/when I can become liquidated and what happens if I do. For example, if I buy in today at the current Bitcoin price with $20,000 (using my $10,000 and their $10,000) at what point will I become liquidated? How can I prevent this? Where would I have to set my stop loss to prevent this? I can't seem to find any information on this. Thanks!
Margin trading is very simple to understand. Just view the below video,
https://youtu.be/tdcVlpViJiAIt's well explained in the video, both the sunny side and the flip side. It is the most comprehensive explanation on margin trading in general.
For your question about liquidation point - your trade will be liquidated as soon as the loss reaches $10,000. For the above example, if you buy bitcoin at $8000 with 20 grand. Your trade will be automatically liquidated if the bitcoin price reaches to $4000.
Hope this helps!