Leverage trading is the trump card when you are an ambitious trader who is eyeing for lofty profits- but unable to deposit a lump sum investment from your own share. The most lucrative aspect of crypto leveraged trading is that it doesn’t demand a hefty trading capital from its own wallet- rather allows it to open bigger trading positions with borrowed funds. The borrowed funds will be supplied by trading platforms aka crypto exchanges. trade on the platform
In regard to range of leverage, crypto leveraged trading platforms allow traders to choose from various ranges of leverage, starting from 1x and extending up to 100x. In return, you will just have to maintain a margin amount that will serve as the collateral for the borrowed fund. You will need to maintain the collateral to keep the trading position active. In case, the maintenance margin gets liquidated, you must make sure to refill the amount. But, to ensure a successful journey with crypto leveraged trading, the first thing to do is to sign up with a reliable leverage trading platform.
Tips to follow while choosing the right trading platform
Carry research
There is no dearth of trading platforms for crypto leveraged trading today. But, not all would be equally compatible for you. Thus, you can’t settle with the very first platform you come across online. You will need to carry a comparative study on at least 5-6 trading platforms for crypto leveraged trading.
Check out posts and articles on best platforms for crypto leveraged trading. You can also consult forums and social groups for suggestions on best exchanges for leverage trading with crypto assets. Based on that, make a shortlist of exchanges that have received rave reviews and ratings from both users and experts. Also, make sure that your chosen platforms for crypto leveraged trading accepts traders from your country.
The one you choose should command a solid reputation in the market and must be backed by a long line of happy traders.
Number of crypto assets for leverage trading
Do you want to stick to only the legacy coins for crypto leveraged trading? Or, do you wish to explore other cryptos too, say altcoins? Well, in that case, you would have to find a crypto leveraged trading platform that has listed new altcoins as well, in addition to legacy coins. It is to note here that not all exchanges would provide that facility but some exchanges do offer the same.
Multi-asset collateral
Let’s say, you wish to execute crypto leveraged trading on Ethereum or some new promising altcoin. But, what if you don’t have holdings for these coins and tokens? As mentioned above, you would need to supply collateral for crypto leveraged trading and the collateral has to be in the form of crypto.
Now, some crypto leveraged trading platforms have made it mandatory to deposit ETH as collateral if you have plans to conduct crypto leveraged trading with Ethereum. The same applies for other cryptos as well. Now, this can be challenging if you don’t give the crypto you want to have crypto leveraged trading with.
Good thing is, some of the leading exchanges allow multi-asset collateral. In other words, these exchanges enable traders to put in one crypto as collateral while executing crypto leveraged trading with another crypto. Thus, if you sign up with these kinds of exchanges, you will be able to have leverage trading with Ethereum by offering your existing BTC holdings as collateral.
Affordable trading fees
This point is extremely crucial when it comes to crypto leveraged trading.
The ultimate goal with crypto leveraged trading is to aim for higher profits. But, you will end up with almost nothing if half of the profits earned gets gobbled up by hefty trading fees charged by the exchange. And some trading platforms do charge sky-high trading fees. But, that’s not the case with every other crypto leveraged trading platform out there. Thus, it’s better to look for a crypto exchange that charges nominal affordable fees. Trading platforms that are customer-centric would generally not burden you with lofty fees.
Measures to prevent overtrading and loss
You will know that you will be able to trust a crypto leveraged trading platform if the portal takes proactive steps to prevent losses for traders. In fact, some of the best crypto exchanges out there have adopted measures to help traders develop the practice of responsible crypto leveraged trading.
One of such measures taken by the exchanges is the Stop Loss limit. In this case, the exchange enables traders to set Stop Loss lines. This line implies the last line of your trade when you are losing frequently. If you set Stop Loss, your trade will be automatically stopped by the exchange once the loss meter reaches that line.
Demo account
This feature is especially important if you are new to crypto leveraged trading.
Well, leverage trading is a risky venture and especially so when you are trading in a wild volatile market like crypto. Thus, it’s better to prepare before you enter the real world field of crypto leveraged trading. In that light, some exchanges do offer demo account trading for newbie traders. Make sure to find such a crypto leveraged trading platform where you will have the room for practice before stepping in the real world of trading.
Wrapping up
We will wrap up the post with a discussion on the expert tips on successful crypto leveraged trading.
First, please do not opt for higher leverage. It’s true that higher leverage opens the door to bigger trading positions and colossal profit yet it’s better to play safe. Don’t forget, crypto is still in the Wild West zone and the market might plummet any time. If you lose, the loss would be calculated on the leveraged trading fund and not just your own share- and that would be a huge amount. Thus, it’s better to stick to low leverage.
Then, you should be careful about the margin amount as well. The whole margin might get liquidated if you experience a big loss. So, make sure to opt for an amount that would be easy to refill.
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