Position Management
Overview
Position management encompasses opening, monitoring, modifying, and closing perpetual futures positions on Frontier Chain. Understanding position mechanics is essential for effective risk management and profitable trading.
Key Concepts:
Position Lifecycle: Open → Monitor → Modify → Close
Position Metrics: PnL, margin ratio, liquidation price
Advanced Orders: Stop loss, take profit, reduce-only
Real-Time Tracking: Continuous position health monitoring
Opening Positions
Order Placement
Process:
Select market and trading pair
Choose margin type (cross or isolated)
Set desired leverage (1x-40x)
Place limit or market order
Position opens when order fills
Margin locked from balance
Entry Methods:
Market Order Entry:
Immediate execution at best available price
Guaranteed fill (subject to liquidity)
May experience slippage
Best for urgent entries
Limit Order Entry:
Specify exact entry price
Only fills at limit price or better
No slippage risk
May not fill if price doesn't reach limit
Initial Position State
When position opens:
Position Record Created:
Margin Locked:
Initial margin transferred from available balance
Cannot be withdrawn while position open
Used to calculate liquidation price
May be added to (isolated) or drawn from (cross)
Example:
Monitoring Positions
Key Position Metrics
Size and Direction:
Positive size: Long position (profit from price increase)
Negative size: Short position (profit from price decrease)
Displayed in base asset units
Entry Price:
Weighted average of all fills
Used for PnL calculation
Updates on partial closes
Remains fixed for full position
Mark Price:
Current fair price from oracle
Updated every block (100ms)
Used for PnL and liquidation checks
Not affected by Frontier Chain trading
Unrealized PnL:
Example:
Position Health Indicators
Margin Ratio:
Liquidation Price:
Price at which position will be liquidated
Based on maintenance margin requirement
Moves as you add/remove margin
Critical metric to monitor
Distance to Liquidation:
Example Dashboard:
Modifying Positions
Adding Margin (Isolated Only)
Increase margin to reduce liquidation risk:
Process:
Select position to modify
Specify amount to add
Margin transferred from available balance
Position recalculated
Effects:
Reduces effective leverage
Moves liquidation price further away
Locks additional funds
Improves position health
Example:
When to Add Margin:
Approaching liquidation price
Expecting increased volatility
Want to hold through drawdown
Margin ratio below 70%
Reducing Position Size
Partially close position to reduce risk:
Methods:
Reduce-Only Market Order:
Closes portion at market price
Immediate execution
Reduces exposure quickly
Realizes proportional PnL
Reduce-Only Limit Order:
Closes portion at specified price
Better price control
May not fill immediately
Useful for taking profit
Example:
Benefits:
Lock in profits
Reduce risk exposure
Free up margin (if closed completely)
Lower liquidation risk
Adjusting Leverage (Isolated Only)
Modify leverage on open position:
Increase Leverage:
Releases margin back to available balance
Moves liquidation price closer
Increases risk
Requires margin ratio > new maintenance requirement
Decrease Leverage:
Requires additional margin from balance
Moves liquidation price away
Reduces risk
Same as adding margin
Example:
Advanced Order Types
Stop Loss Orders
Automatically close position when price reaches stop level:
Long Position Stop:
Stop price below entry
Triggers when mark price ≤ stop price
Executes as market order
Limits downside risk
Short Position Stop:
Stop price above entry
Triggers when mark price ≥ stop price
Executes as market order
Limits upside risk
Example:
Best Practices:
Set stop below recent support (longs)
Set stop above recent resistance (shorts)
Account for volatility (don't set too tight)
Place stop before liquidation price
Typical: 2-5% from entry
Take Profit Orders
Lock in gains at target price:
Long Position TP:
Target price above entry
Triggers when mark price ≥ target
Executes as market order
Secures profit goal
Short Position TP:
Target price below entry
Triggers when mark price ≤ target
Executes as market order
Secures profit goal
Example:
Strategies:
Set TP at resistance levels (longs)
Set TP at support levels (shorts)
Multiple TPs for scaling out
Risk-reward ratio 2:1 or better
Bracket Orders
Combine stop loss and take profit:
Setup:
One-Cancels-Other (OCO):
When one triggers, other cancels
Prevents over-execution
Clean position management
Common pattern for risk management
Closing Positions
Full Position Close
Market Close:
Immediate exit at best available price
Fastest method
Guaranteed execution (subject to liquidity)
May experience slippage
Limit Close:
Exit at specified price or better
Better price control
May not fill if price doesn't reach limit
Useful when not urgent
Example (Market Close):
Automatic Closes
Liquidation:
System closes position when margin < maintenance
No user control over price
Maintenance margin captured
Should be avoided
Auto-Deleveraging (ADL):
Emergency system closure during extreme conditions
Closes profitable positions to cover losses
Rare occurrence
Closed at bankruptcy price of liquidated position
Stop Loss Trigger:
User-set automatic close
Triggered by mark price reaching stop level
Controlled exit before liquidation
Recommended for all positions
Take Profit Trigger:
User-set profit target
Triggered by mark price reaching target
Locks in gains automatically
Useful for unmonitored positions
Position Netting
How Netting Works
Opposite orders in same pair net against position:
Reducing Position:
Closing Position:
Flipping Position:
Partial Close Mechanics
When closing portion of position:
PnL Realization:
Margin Release (Isolated):
Proportional margin returned
Example: Close 50% → 50% margin returned
Leverage Adjustment (Isolated):
Leverage decreases when closing
More margin backing smaller position
Safer liquidation price
Cross vs Isolated Position Management
Cross Margin Positions
Characteristics:
Share entire account balance
Automatic margin addition
All positions affect each other
Account-level liquidation risk
Management Tips:
Monitor total account health
Be cautious with correlated positions
Use for hedged strategies
Professional traders preferred
Example:
Isolated Margin Positions
Characteristics:
Dedicated margin per position
No spillover between positions
Manual margin management
Position-level liquidation risk
Management Tips:
Add margin proactively
Monitor each position independently
Good for speculative trades
Recommended for beginners
Example:
Best Practices
Risk Management
Position Sizing:
Never risk more than 2-5% of account per trade
Use stop losses on every position
Don't over-leverage
Maintain 30%+ margin buffer
Monitoring:
Check positions multiple times daily
Set price alerts
Monitor margin ratio
Watch liquidation price
Leverage Selection:
Beginners: 1-3x
Intermediate: 3-10x
Advanced: 10-20x
Professional: 20-40x
Position Hygiene
Regular Actions:
Review open positions daily
Adjust stops as price moves
Take partial profits at targets
Add margin when approaching liquidation
What to Avoid:
Holding without stops
Ignoring liquidation risk
Over-leveraging account
Revenge trading after losses
Letting winners turn into losers
Real-Time Position Tracking
WebSocket Updates
Subscribe to position updates:
Position Changes:
Entry/exit fills
PnL updates
Margin changes
Liquidation price updates
Funding payments
Mark Price Updates:
Every 100ms block
Affects unrealized PnL
Updates liquidation risk
Real-time position health
Funding Payments:
Every 8 hours
Affects position PnL
Auto-settled
Tracked cumulatively
Key Takeaways
Opening Positions:
Choose appropriate leverage for risk tolerance
Select margin type based on strategy
Use limit orders for better entry prices
Understand initial margin lockup
Monitoring:
Track margin ratio continuously
Know your liquidation price
Monitor unrealized PnL
Watch distance to liquidation
Modifying:
Add margin when approaching liquidation (isolated)
Use reduce-only orders to take profits
Adjust leverage carefully
Scale in/out of positions
Closing:
Use stop losses to limit losses
Take profits at target levels
Market close for urgency
Limit close for price control
Risk Management:
Never hold positions without stops
Maintain adequate margin buffer
Don't over-leverage
Monitor positions actively
Next Steps:
Margin & LeverageFunding RatesLiquidation SystemLast updated