Learn about Binance leverage trading and how to trade more efficiently
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In the financial markets, leverage is a tool that enables traders to open large buy or sell orders with a smaller amount of capital. Binance allows users to leverage and control risk in a variety of ways. The following article learns about trading leverage on Binance to help users trade more efficiently.
What is leverage in cryptocurrency trading?
Leverage in cryptocurrency trading is similar to that in trading other financial assets, allowing a trader to buy or sell with more capital than is currently available in the account. Depending on how much leverage the exchange offers, users can use tens or hundreds of times their account balance’s trading capital. The leverage ratio can be 1:5, 1:10 or 1:20, 1:100. The user can multiply the capital by 5, 10, 20, or 100 times. For example, if your account has 10 USDT, you use 1:10 leverage, so you can open a trade using 100 USDT to buy BTC. Users can use leverage to trade any cryptocurrency or leveraged asset on the exchange.
Why use leverage when trading cryptocurrencies?
With leveraged trading, users can open orders with a larger volume, which means a more significant profit when the trade is booming.
Leveraged trading helps users quickly open orders of the desired volume without depositing additional funds into the account. It allows traders to save time and make quick trading decisions if they are in the market.
With the same amount of capital, traders can open more orders without affecting the size of the trade when using leverage. It helps users to diversify their investment portfolios.
Why Leverage Trading on Binance Margin?
The Binance platform offers up to 600+ crypto pairs for users to leverage through the Binance Margin feature. In it, there are some uncommon cryptocurrency pairs. Therefore, traders who want to leverage trading with rare pairs can search on Binance Margin.
When trading leverage on Binance Margin, users can deposit with various collateral using cross-margin mode. For example, traders can use BTC, ETH or USDT, or BUSD… for margin. This gives users more flexibility in the process of trading and owning crypto assets.
Binance Margin has a Cooling-off Period function that helps traders fall into overtrading. This function helps the account temporarily disable Futures trading to prevent forced trading.
In addition to providing a variety of assets and special risk-limiting functions, Binance Margin is also preferred by users due to its user protection insurance fund. This insurance fund helps users to protect their accounts when the Equity of the account (assets minus liabilities) is less than 0. In this case, Binance helps users to put the Clearing Fees and a portion of the revenue. Deposits from Margin, as well as Cryptocurrency Loans, into the Margin Insurance Fund.
How to Leverage on Binance?
To trade leverage on Binance, users need to log in to their accounts. If you do not have an account, please open a Binance account by following the link below:
On the toolbar, click Trade, and select Margin. If using the Margin feature for the first time, users need to answer the quiz the Binance Margin.
After successfully opening a Binance Margin account, the user makes a deposit to the Margin account. Scroll down to the trading window, and click Transfer.
- Fill in the deposit wallet information
- Receiving Wallet (Isolated Margin or Cross Margin)
- Choose a trading pair
- Select the coin you want to use for the deposit.
- Enter the amount you want to deposit
- Click Confirm to complete.
- Select a trading pair, select Cross 3x or Isolated 10x trading mode.
- Select the Buy or Sell trading window, then click Borrow to borrow money to trade.
- Select the order type (Limit, Market, Stop-limit, or OCO), fill in the transaction information, and click Margin Buy/Sell BTC (If you want to trade BTC/USDT pair).
If you want to repay the loan borrowed in the above transaction, click Repay, select the electronic currency and amount you want to pay, and click Confirm repayment.
Leveraged trading on Binance can help users maximize profits. However, leveraged trading can also result in larger losses for the trader. When trading leverage on Binance, users need to monitor their margin accounts. If the margin falls to 1.1, the user has not increased the collateral or reduced the loan, then the trade automatically liquidates at the market price to repay the loan automatically. Therefore, if there is no experience in leveraged trading, users should be cautious and learn carefully before using the Margin feature.
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