Leverage Trading Crypto


Interest in trading crypto gets an extra spark from leverage trading. If you’re looking to try out different trading strategies or just want to increase your buying power but don’t have a massive capital to put down, leverage trading crypto might be for you.

Getting started, you need to research as many articles on leveraged trading as possible. The CoinMetro blog is a great place to start! You can begin with our guide to leverage trading and find out more in What is Leverage Trading?

This short guide on leverage trading crypto is a cherry on top of your initial research.

How Does Leverage Trading Work?

With a margin trading account, a trader puts in a certain percentage of the total order value. Margin is also used to create leverage, which gives traders increased buying power.

Bottomline: leverage allows you to open much larger positions than you would otherwise be able to open if you could only use the funds in your account.

In trading, leverage is expressed as a ratio, such as 4:1, 20:1, or 100:1.

Here’s a simple example: a trader puts down $25 and leverages 4:1 to borrow $75 to buy $100 worth of Bitcoin.

Is Leverage Trading Crypto Worth it?

Leverage trading may sound easy, but in practice, it’s a tricky strategy. The higher the potential profits, the higher the stakes. All it takes to blow your account is not being careful enough.

At first glance, you put down a certain amount of money that is then multiplied by leverage and make cash on the trade, or even a whole lot of money. If this is all you can see, we have bad news for you. You don’t have a reasonable trading plan. To make leverage trading worth it, having a good one is a must.

Drawing up your trading plan, consider the accompanying risks and how much you’re willing or can afford to lose in the first place. Don’t fall into temptation – always stick to your plan.

Considering potential losses is another leverage trading essential. This is where stop-loss orders come into play – a key to limiting your trading losses and keeping your account healthy.

To make leverage trading crypto worth it, you also need to know everything about the fees and commissions – if neglected, they can create a lot of additional costs.

As you can see, to engage in leverage trading, you need to think ahead about the potential losses a lot. Funny enough, the idea behind this method of trading is magnified profits, yet being aware of and accepting the idea of equally magnified potential losses is key to escaping the pitfalls of this complicated strategy.

Trade Crypto with CoinMetro

The crypto market is sizzling: the prices are going up and down, and then up again, the scene is evolving with more and more trading strategies and phenomena appearing.

The crypto scene is definitely here to stay, and now is a very exciting time to make an entry. A brand new trader? Go for it even if you have no crypto-related background or knowledge just yet – or cry later.

If you’re a pro, CoinMetro is the crypto exchange to explore – no matter if you’re here for leverage trading or something else.

Open an account today to discover a wide range of the CoinMetro products and features, with many more coming soon.