Margin exchanges usually have a reduce-only instruction which allows opening orders that can only exit an existing position, but not open a new one.
An order might be closed with this status when the position size decreased, either because the amount was used on other trades or the position was liquidated.
The “Position Decreased” status indicates that the size of a trade or open position has been partially or fully reduced. This can happen for several reasons, depending on the exchange and the trading activity involved.
Possible Scenarios
Liquidation
In some cases, a “Position Decreased” status can appear due to liquidation. When the exchange automatically closes part or all of your position to prevent further losses.
Note: Liquidation details are currently supported only for major exchanges such as Binance, Bybit, and KuCoin. On these exchanges, the status will typically appear as “Position Liquidated” instead of “Position Decreased.”
For other exchanges, liquidation events may still appear as “Position Decreased”.
Funds Used in Another Trade
The position may have been partially or fully used in a different trade.
When this happens, there are no remaining funds available to execute a sell order for the current trade, resulting in the “Position Decreased” status.
Opposite Direction Trade or Signal
If an opposite direction trade or signal is received, and you are trading in "One-way Mode" (no Hedge Mode) the current trade may be closed automatically, and a new trade may be created in the opposite direction.
When that happens, the reason may appear as “Position Decreased” or “Position Closed” instead of “Closed due to opposite direction.”