Auto-Deleveraging (ADL) is a final safety mechanism used on WOO X Pro to ensure market stability during periods of extreme volatility.
What is ADL?
When a trader’s position is liquidated, the WOO X Pro Insurance Fund typically covers the loss. However, if the market moves so fast that the Insurance Fund cannot cover the gap, the ADL system takes over.
It automatically matches the "underwater" (liquidated) position with an opposing profitable trader to close the gap.
How are traders selected for ADL?
Traders are ranked in a "Queue" based on two factors:
- Profitability: The more profit you have in your position, the higher you are in the queue.
- Effective Leverage: The higher your leverage, the higher you are in the queue.
Note: Only profitable traders are at risk of ADL. If your position is in a loss, you will never be selected for Auto-Deleveraging.
How to monitor your ADL Risk
On the WOO X Pro trading interface, you will see an ADL Indicator (represented by 5 signal bars).
- 1 Bar: Low risk of being deleveraged.
- 5 Bars: High risk. You are at the front of the queue.
What happens if I am ADL-ed?
- Notification: You will receive an immediate notification/email that your position was closed via ADL.
- Trade Price: Your position is closed at the Bankruptcy Price of the liquidated trader.
- No Fees: WOO X Pro does not charge any trading fees on positions closed via ADL.
- Profit: You keep all realized profits up to the point of the ADL.
How to Reduce the Risk of ADL
If you see your ADL Indicator rising (4 or 5 bars), consider the following:
- Reduce Leverage: Lowering your effective leverage will immediately move you further back in the ADL queue.
- Close Part of the Position: Reducing your position size can lower your ranking.
- Take Profit: Closing a highly profitable position manually ensures you exit at your chosen price rather than the ADL bankruptcy price.
Frequently Asked Questions
Is ADL the same as Liquidation?
No. Liquidation happens when you run out of margin. ADL happens to profitable traders to help keep the overall exchange stable during extreme market crashes or spikes.
Why was my winning trade closed for no reason?
This was likely an ADL event. If the Insurance Fund cannot cover a major liquidation, the system closes the most profitable/highest leveraged opposing positions to maintain balance. You receive the profit, but the position is closed.
Do I lose money in ADL?
No, you keep your profit. However, you lose the "opportunity" for more profit because your position is closed earlier than you planned.