Topic: 10x vs 15x Margin Trade Question (Read 344 times)

Thanks for all the different answers and the constant warnings about scary leverage trading.  ;-) Much appreciated. Seems like many people are just as confused as I am… I stopped using ROE the instant we figured it out a few days ago. Using PNL now.

Haven't made that many trades as of yet with the new PNL setting. Seems to sorta be a similar issue; Less profit with higher leverage. Have to check it out more.

The one thing I did notice so far is that when I enter a trade say; $1000.00 long @ $100.00 @ 10x leverage taking profit of $10, the PNL rate says 10%.  If I do the exact same trade and only change one variable, the leverage @ 15x, the PNL rate says 15%…

Still trying to wrap my head around that one… Any ideas?

First of all ned to understand in the margin trade the profit is not only based on the leverage you've used, there must be the funding rate fees and other hidden fee charges so calculating the profit is not gonna be efficient as the fees may vary from the platform to platform but in your case.

On the same to check your profit just check your position size, fees, and funding rate, in dile situation the TP of 5% on 15X leverage is gonna give 5 times more profit because the positon size is according to 15x but when it comes to small trades it won't put a significant change between the 10x and 15x due to funding rates and the other fees deduction.

In simple more position size = more profit on 5% TP, because the TP is set based on the total trade position size, A friendly reminder I don't trade in leverage due to some of the reasons and I strongly discourage leverage trading due to religious and ethical point of view, people just lose money leverage because they gamble on trade while using leverage. 

It's with 15x you would get more profit compared to 10x but there is only one factor which may have confused you and that's the trigger price and your position I mean limit orders because let's say we have set TP if the value drop below certain limit and by the time the order is executed if the price rapidly drops then you will get less than your expected 5% TP unless you have set proper conditions limit what should be limit for order execution as this plays a major role.

Future trading is very risky, it is equivalent to gambling. If you take 15x leverage and keep Tp 5% it will happen much faster than if you take 10x. And the more leverage you take, the more risk you have. Because high leverage always brings the liquidation price to shore. I do not encourage futures trading and try to stay away from futures trading myself. And in case of future trading leverage should not be more than 3-4x because 3-4x leverage will save a trader for a long time.

What you should be using to take profit is PNL (Profit and Loss) instead of ROE (Return of Equity) to avoid confusion. PNL is direct and easier to calculate, whereas ROE has been explained by tvplus006.

I wanted you to mention the exchange you are using so that I can help point you to some articles you can try reading, but you didn't bother to mention it. Anyway. I hope you understood what was confusing you.

Damn, sorry, yes I did miss your message, and you've perfectly explained it. Equity of course becomes less, somehow I totally missed that his trades were made concurrently. In my mind, he had opened these trades one after another, after closing previous. Well done, after all it was the simplest explanation and somehow it slipped past.

How did you miss my message, which is above yours? In this post, I described in detail the reason for the misunderstanding happening with the OP - https://bitcointalksearch.org/topic/m.63825657 And it does not matter on which exchange this happens if you open a margin position incorrectly.

Wow, new to me too, but I think that's something you need to ask your customer support too, to get a clearer answer. Or get us the exchange name, we can look up the faq maybe.

But for sure it's the equity that's creating the issue, though I'm still not sure then how this works, your higher leverage shouldn't affect your equity, only your equity risk. So definitely need to see the exchange's formula.

Quoted OP below to view his images

It's elementary) When using x10 leverage, your personal funds amount to $100 and, accordingly, 5% will amount to about $ 5 profit. Since the total amount of the open position in both the first and second cases is $1000, when you open a deal in the second case, you will have $66.67 of your funds involved and it is from this amount that you will receive 5%, which is approximately $3.33.

ROE
Price
PNL

craigs, what crypto exchange are you using?
I would love to check it out for you. Honestly, take profit ROE is new to me. Never used it before on the exchanges I use to trade perpetual contracts, and I think I am getting to understand why your take profit seems much lower than you expect

On the dropdown arrow after ROE, what other option do you see?

These are the two trades below. They are identical trades other than the leverage (10x and 15x respectively) and the TP.

You could see the leverage level at the top of the trade screen and the TP at the bottom of the trade screen.

The 10x has a $4.97 profit.
The 15x has a $3.31 profit.

I also started a trade at 200x which shows a profit .24c. I posted that as the third trade image.

https://talkimg.com/images/2024/03/17/JNK0a.png

https://talkimg.com/images/2024/03/17/JNObl.png

https://talkimg.com/images/2024/03/17/JE2zC.png

PS just to dispel all the angst and worry about my use of leverage, Ive been trading leverage with crypto for several years and used to trade leverage NYSE stock contracts. Ive just always gone the 10x route so never had any opportunity to see what a 15x trade looked like until now… So thanks for the concern but no need to address this or give warnings. I am more than well aware of any of all risks. Much thanks for advice, warnings and help!

EDIT;

I see now that the TP is set to ROE. Which I'd imagine that this is the issue. Ive never messed with these settings at all. This is a new exchange for me. The default on this exchange must be ROE. Which Ive yet to look into why and how, when and why ROE used for TP.


I basically want to set the TP to TP when BTC moves 5%.  Which is what I thought that I was doing. I will have to look into ROE, vs the other TP settings. Anyone here familiar?


EDIT #2;

I see now that is is the ROE TP that is lessening the TP amount with higher leverage. Still not sure ow, when or why someone would use this or why it lowers the profit the higher the leverage? This is a new exchange for me and ROE must be the default setting and I just notices it taking screenshots now...

Anyways I thought the ops wanted to upload some images here to portray his point more and also for much more understanding in the long run, I think what the ops mean may not have been covered in totality in your first reply and he needs to upload image on this thread to make it more clear, but all the same I think your reply make a lot of sense if he can reread the comment once more because ordinary higher percentage in trading which in his case he mentioned 15x and 10x which in reality 15x will give higher profits merging than the 10x in trade,.
Let hope that the ops comes up with images to portray his point more or if he mean anything outside what we already understand and contributed to already.

I won't tell you which one will bring better profits but I will tell you one thing that you will soon lose money and even go bankrupt if you continue trading with leverage. It seems like you are newbies and don't even have any knowledge about trading yet you trade with high leverage hoping to make money quickly. With this alone, I'm pretty sure you'll lose money and exit the market before making a profit. Stay away from trading when you are just a newbie and do not have any knowledge about this market.

As far as basic math is concerned, a 15x leveraged position provides more profit than a 10x leveraged position. And so, 5% of 15x leverage should be higher than 5% of 10x leverage. Therefore, I don't think your issue is about your leverage. There must be something else. You should provide the bigger picture. There are surely other factors for this.

If you continue to find none, then consider yourself blessed. If increasing leverage means smaller profit, then choose lower leverage. Not only are you lowering down your risk, you're also increasing your profit.


Just upload your screenshots through talkimg.com and post the link here. The image doesn't show up from your end because you're just a newbie, but anybody could quote it for everybody's visibility.

Others might be able to explain your curious case with the help of these screenshots.

I have used margin trading in past but I don't use it anymore. It's some kind of borrow and repay game. Let's say if you go with 10x margin trade and you put $100 then you virtually have $1000 worth of a trade not $100 worth of a trade. Now if you take profit at 5% then you'll make around 5% profit at $1000 level not at $100 level. So in simple words you'll have around 10x more profit with 10x margin then with a spot trading. However, in margin trading you'll have to repay the borrowed amount plus some interest or fee.

So by keeping that in mind, 15x margin trade will give you virtual value of $1500, however it's a little bit more risky for you because the change of getting liquidated is higher with 15x margin trade than with 10x one. However, it's not correct that you'll have less profits at 5% take profit with 15x margin trade than with a 10x one. If the fees and interest rate of 15x margin is higher than that can happen otherwise that won't happen.

This should be on another thread and it supposed to be created on meta because it is about the forum. Just in case of next time. Before you can be able to upload image, you have to be at least a junior member and you will need 1 merit and activity of 30 to become a junior member. But you can post the link instead as it is explained above by logfiles.

Just upload the screenshots to https://talkimg.com/ and share the links here

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craigs, Oshosondy pretty much answered your question.

5% take profit for a $1000 position ($100 and 10x leverage) is approx $50
5% take profit for a $1500 position ($100 and 15x leverage) is approx $75

But we haven't looked at other factors such as your TP being triggered by the mark price or last price, trading fees and funding fees. They very much affect the profit you could make. Don't also forget that some exchanges have a risk management feature whereby when you try to adjust the leverage, the position size automatically changes, which is why looking at your screenshots is important to deduce what could have happened.

How do I upload a screenshot here?

Let us say you have $100
You go 10x, that is $1000 that you used to trade
You go 15x, that is $1500 that you used to trade.

You will have more profit with 15x if the market go your direction. You will have more losses with 15x if the market does not go your direction. The liquidation of your fund is higher to occur if you use 15x. Although not that 10x is not risky because it is also very risky.

Both are higher leverage and thus may always lead to liquidation.

If you are a consistent trader, this question is not really  important because you can practically try the 15x margin and set to take profit at 5%, compare the profit from the 10x you are using and the 15x then you will get your solution. 15x has a high yield than 10x but the risk of losing your capital is also high, if you choose 15x you will get more profit than 10x and 5% of it can not be compared 5% of a 10x profit.

10x will literally increase your bet by 10 times.

I would highly highly suggest using a leverage in crypto at a maximum between 3 to 5x. Especially with altcoins, they're volatile as heck!

When you use a higher leverage, you should close your position faster than using a lower leverage. Because you will have less time to let your position opens before the market moves big.

If you aim at 5% profit with 10x leverage, you will have to aim at lower profit like 3% for x15 average.

Don't use leverage is better as you are asking about 10x and 15x leverages that are all high risky for your collateral. Your position will have high risk of forced liquidations.

Don't try to be outsmart and want to beat the market, you will be beaten by the market.

I think 10x of $1000 is supposed to have been $10,000, right? And while setting the trade to take profit at 5%, such user is expected to have gotten the least $50 as profit, right? So then if yours at each moment seems to be lower than what I gave, then it seems there must be something wrong somewhere, and as such, I think Its better I call on the attention of good traders such as "logfiles" to come tell us what likely to be the issue and solution here. Thanks

Im making the same trade @15x as I was @10x. Basically $1000 @ 10x and $1000 @ 15x. And I am setting the TP @ 5%. I am getting $5 or so profit when the 10x trade triggers the TP and only $3 or so when the 15x triggers. It seems backwards to me as well. I would think if I used 15x margin the profit would increase or at least be the same when I set the TP @ 5%. There must be some equation or online calculator or someone that knows why this would be?

Though I'm not a professional when it comes to Future or Margin trading, but looking at this from a mathematical point of view, I think "Taking Profit" @ 5% of 15x will be much more than "Taking Profit" @ 5% of 10x. And secondly, the higher your capital will also determine the higher the profit you are likely to make at each trade. But it your capital is small, same will your profit also be.

If I trade 10x vs. 15x will the 10x make more profit than the 15x if I TP @5% or should it be the same amount of profit either 10x or 15x if I set the TP @5% ? For some reason if seems like Im getting less profit per trade when I just upped my margin from 10x to 15x. And I should ask if it is less profit using 15x, why is that? Thanks

PS Not seeing a tool to upload a file/ screenshot here. But can do if someone could tell me where the button is?