How does "Try to avoid liquidation" work?

This feature is only available on a Combo Trigger related to a Perpetual Dex position. The feature allows us to execute a secondary Combo trigger that will close the position automatically when the risk of liquidation is high, and send it to the next node.
A combo trigger screen with the "Try to avoid Liquidation" Check
To do this, we use a formula that take as reference the entry price and the liquidation price provided by GMX.
For Long Positions:
liquidationPrice + ((entryPriceUSD - liquidationPrice) * PERCENTAGE_THRESHOLD)
For Short Positions:
liquidationPrice - ((liquidationPrice - entryPriceUSD) *PERCENTAGE_THRESHOLD)

Does this feature always work?

In general, this feature works extremely well and recovers an important part of your principal. In our internal tests, it has been successful more than 9 out of 10 times. However, it doesn't always work. Our system relies on Chainlink price feeds, and our oracle is not easy to manipulate. However, price action often moves faster than the oracle. If there is a sudden market movement that surpasses the liquidation price before the Chainlink oracle gives us our exit price, the operation will be liquidated by GMX and the position will be automatically closed.

What can I do to prevent this and be safer?

You can create an additional trigger that will close the position based on a condition using our Price Feeds Combo trigger. This will allow you to exit the position when the oracle dictates a certain asset price. You can adjust the level of risk you want to assume manually, creating another layer of protection in addition to what we already provide.
To create another layer of protection just setup the Close position Trigger manually, at the price you prefer.
Last modified 17d ago