Topic: Cost of Leverage (Read 205 times)
Leverage used by a trader puts the trader on an artificial relaxed mode while all things are not good. It is risky to trade with leverage if you are a newbie.
That is leveraging for you, you are borrowing money and you should expect to pay some interested on your loan, which is what you are seeing, and that is why we sometimes think we are just working for the broker. I personally don’t like loan naturally and to think of placing leverage in a trade, it is still quite risky for me, and the bad thing about leverage is that if you lose the money, the company would not because of that not still collect their profit.
Leveraging is a system of those who are leveraging out to make profit and don’t expect to get that 14 percent, but even if you are being paid that 11 percent, I think that it is still ok because there is still a gap between 7 percent and 14 percent, the 4 percent is really a very big catch.
Leveraging is a system of those who are leveraging out to make profit and don’t expect to get that 14 percent, but even if you are being paid that 11 percent, I think that it is still ok because there is still a gap between 7 percent and 14 percent, the 4 percent is really a very big catch.
You are probably doing market orders since you are being charged fees.
The thing is, in margin trading, the takers fees are calculated with your (leveraged) position value, not your margin. So your position value is way larger than your margin, and that's the basis of calculation for taker fees.
The thing is, in margin trading, the takers fees are calculated with your (leveraged) position value, not your margin. So your position value is way larger than your margin, and that's the basis of calculation for taker fees.
I have never traded using laverage,
try to read the trade guidelines about laverage, if the rules there must save 50% profit then it's normal, because that's the rules,
and if I were, I would stay away from exchanges like that, I would prefer exchanges like bianance, huobi, kucoin, or the like.
try to read the trade guidelines about laverage, if the rules there must save 50% profit then it's normal, because that's the rules,
and if I were, I would stay away from exchanges like that, I would prefer exchanges like bianance, huobi, kucoin, or the like.
This is my first post so hopefully this is in the right spot. I have a question about trading bitcoin with leverage on exchange. My questions:
I did a test position...bought in when bitcoin was 10k sold at 10,700 with 2x leverage...only got back 10 or 11% profit after i closed my position....i understand i was not going to get entire 14%, but they kept about half my profits (i would have gotten 7% with no leverage).... Is this normal?
I did a test position...bought in when bitcoin was 10k sold at 10,700 with 2x leverage...only got back 10 or 11% profit after i closed my position....i understand i was not going to get entire 14%, but they kept about half my profits (i would have gotten 7% with no leverage).... Is this normal?
It's hard to say without more information. What exchange was this and how long did you hold the position? You should be able to look at your transaction history to figure out what happened: exact entry and exit levels, trading fees on both sides of the trade, and margin cost of carry.
If you were trading on Bitfinex, interest is deducted either on a daily basis from your margin wallet or on a term basis when you close the position. See here for more info:
https://support.bitfinex.com/hc/en-us/articles/213918929-What-is-the-difference-between-offering-funding-on-a-daily-or-term-basis-
https://support.bitfinex.com/hc/en-us/articles/115004554309-How-are-interest-and-fees-calculated-when-offering-margin-funding-
You may have leveraged at 2x, but what was the exact margin you used to borrow? It could be you only put up some of your coins to be leveraged (and some used at 1x). You've to share the exact #s here for anyone to help you.
What were the fees and commissions also, did you loan from someone else at a different interest rate, or was it from the platform itself at a fixed commission. Everything counts!
What were the fees and commissions also, did you loan from someone else at a different interest rate, or was it from the platform itself at a fixed commission. Everything counts!
This is my first post so hopefully this is in the right spot. I have a question about trading bitcoin with leverage on exchange. My questions:
I did a test position...bought in when bitcoin was 10k sold at 10,700 with 2x leverage...only got back 10 or 11% profit after i closed my position....i understand i was not going to get entire 14%, but they kept about half my profits (i would have gotten 7% with no leverage).... Is this normal?
That's the rule, at margin costs are very high because your profits will also be very high.I did a test position...bought in when bitcoin was 10k sold at 10,700 with 2x leverage...only got back 10 or 11% profit after i closed my position....i understand i was not going to get entire 14%, but they kept about half my profits (i would have gotten 7% with no leverage).... Is this normal?
I used to be surprised and angry at the first few transactions but now I'm used to it.
But remember, when you trade at a loss, your costs will decrease.
So from $10,000 to $10,700 lets assume that is 7% increase w/out leverage. Since you said that you used 2x leverage, then the increase is 14% (7% x 2 leverage).
You should have got around 14% profits but keep in mind that there is the fee of exchange, especially much higher fee when you used market sell option for closing your position
You should have got around 14% profits but keep in mind that there is the fee of exchange, especially much higher fee when you used market sell option for closing your position
This is my first post so hopefully this is in the right spot. I have a question about trading bitcoin with leverage on exchange. My questions:
I did a test position...bought in when bitcoin was 10k sold at 10,700 with 2x leverage...only got back 10 or 11% profit after i closed my position....i understand i was not going to get entire 14%, but they kept about half my profits (i would have gotten 7% with no leverage).... Is this normal?
I did a test position...bought in when bitcoin was 10k sold at 10,700 with 2x leverage...only got back 10 or 11% profit after i closed my position....i understand i was not going to get entire 14%, but they kept about half my profits (i would have gotten 7% with no leverage).... Is this normal?
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