Learn to trade perpetual futures effectively on Hyperliquid with order types, leverage, and risk management.
Educational content only. Not financial advice. Trading involves significant risk of loss.
Understanding order types is the foundation of effective trading. Each type serves a different purpose depending on your strategy and market conditions.
Execute instantly at the best available price. Your order fills immediately against existing orders in the book.
When to use: When speed matters more than price, such as entering or exiting volatile markets quickly.
Set your desired price and wait for the market to come to you. Your order only fills at your specified price or better.
When to use: When you have a specific entry or exit price in mind and can wait for the market to reach it.
Automatically exit your position when the price hits a trigger level, limiting your downside risk.
When to use: On every trade. Always set a stop-loss to define your maximum acceptable loss before entering.
Lock in gains by automatically closing your position when the price reaches your target profit level.
When to use: To secure profits at predetermined levels without needing to watch the market constantly.
Leverage amplifies both your potential profits and losses. On Hyperliquid, you can trade with up to 40x leverage on supported pairs.
Leverage lets you control a larger position with less capital. With 10x leverage, a $100 deposit controls a $1,000 position. This means a 1% price move equals a 10% change in your account.
Example:
Deposit: $100
Leverage: 10x
Position size: $1,000
Price moves +5%: You gain $50 (50% return)
Price moves -5%: You lose $50 (50% loss)
Margin is the collateral you deposit to open and maintain a leveraged position. There are two key thresholds to understand.
The minimum collateral required to open a position. At 10x leverage, initial margin is 10% of position value.
The minimum collateral to keep a position open. If your margin falls below this level, liquidation is triggered.
High Leverage Warning
Higher leverage means your liquidation price is closer to your entry price. At 40x leverage, a mere 2.5% adverse move can liquidate your entire position. Most experienced traders use 2x-5x leverage or lower. Start with low leverage until you fully understand the risks.
Funding rates are periodic payments between long and short traders that keep perpetual contract prices aligned with the underlying spot price.
Perpetual futures have no expiry date, unlike traditional futures contracts. To keep the perpetual price tracking the spot price, exchanges use a funding rate mechanism. When the perp price is above spot, longs pay shorts (positive funding). When perp is below spot, shorts pay longs (negative funding).
Funding is settled every hour on Hyperliquid (24 times per day), at 1/8 of the computed 8-hour rate.
Longs pay shorts. Indicates bullish sentiment and perp trading above spot.
Shorts pay longs. Indicates bearish sentiment and perp trading below spot.
You can view current and predicted funding rates directly on the Hyperliquid trading interface. The funding rate is displayed next to each trading pair and updates in real time. Consider funding costs when holding positions overnight or for extended periods, as they can significantly eat into profits on longer-term trades.
Tip: High positive funding can indicate an overheated market. Some traders use funding rate analysis as a contrarian indicator to identify potential reversal points.
Understanding how liquidation works is essential to protecting your capital and managing risk effectively.
Liquidation occurs when your position's margin balance drops below the maintenance margin requirement. This happens when the market moves against your position far enough that your remaining collateral can no longer support the trade.
Simplified Example (Long Position):
Entry price: $1,000 | Leverage: 10x | Margin: $100
Maintenance margin: ~0.5% of position ($5)
Approximate liquidation price: ~$905
(When unrealized loss approaches $95, leaving only maintenance margin)
For larger positions, Hyperliquid may partially liquidate your position rather than closing it entirely. This reduces your position size to bring the margin ratio back to a safe level, potentially saving a portion of your trade.
If the market moves too quickly or the position is small, the entire position may be closed. Your margin for that position is lost, but your remaining account balance is protected (in isolated margin mode).
Lower leverage means a wider distance between entry and liquidation price.
Deposit additional collateral to push your liquidation price further away.
Exit the position before it reaches your liquidation price.
Regularly check your margin ratio, especially during volatile market conditions.
Successful trading is not about winning every trade. It is about managing risk so that losses remain small and recoverable.
Never risk more than 1-2% of your total trading capital on a single trade. This means if you have $10,000, the maximum loss on any one trade should be $100-$200. Position sizing is the single most important risk management rule.
Position Size Formula:
Account: $10,000 | Risk per trade: 1% = $100
Stop-loss distance: 2% from entry
Position size = $100 / 0.02 = $5,000
Leverage needed: $5,000 / $10,000 = 0.5x (no leverage needed)
Place stop-losses at technical levels where your trade thesis is invalidated, not at arbitrary percentages. Common placements include below support levels for longs, above resistance for shorts, or below/above recent swing points. Always set your stop-loss before entering the trade.
Avoid concentrating all your capital in a single position or correlated assets. Spread risk across different trading pairs and timeframes. Remember that most altcoins are heavily correlated with BTC, so multiple altcoin positions may not provide true diversification.
Revenge trading after a loss, moving stop-losses, and overleveraging are the most common mistakes. Create a trading plan with clear rules and follow it. Take breaks after significant losses. Journal your trades to identify emotional patterns.
For spot positions on Hyperliquid, consider dollar-cost averaging (DCA) instead of entering with your full allocation at once. By spreading purchases over time, you reduce the impact of short-term volatility and avoid buying at a single potentially unfavorable price.
Remember: The goal of risk management is survival. A trader who preserves capital through drawdowns can always recover. A trader who blows up their account cannot. Protect your downside and the upside will take care of itself.
Explore more guides to level up your Hyperliquid knowledge.
whatishyperliquid.com is not affiliated with, endorsed by, or sponsored by Hyperliquid, HYPE or Hyper Foundation, or any other centralized or decentralized exchange, protocol, or company. Hyperliquid is an independent decentralized exchange protocol.
All content on this website is for educational and entertainment purposes only. Nothing here constitutes financial, investment, trading, accounting, tax, or legal advice.
Perpetual futures are highly speculative and may result in substantial or total loss of capital. Leverage amplifies gains and losses. Trade only with money you can afford to lose. Always do your own research and consider seeking advice from a qualified professional.
whatishyperliquid.com may earn a commission if you click a referral link and open or use an account on a third-party platform. This does not change your price and does not influence our educational content or recommendations.
By using this website and any linked platforms, you acknowledge these risks and agree that you trade at your own discretion and responsibility.