When you are talking about leverages for your trading, you should calculate at what price your position will be liquidated at specific entry price and specific leverage for that position.
It helps you to imagine clearer about what might happen with your position, capital and have appropriate plan. Sometimes, if market has Cascade effects and your position can not be closed above liquidating price, you will lose most of capital by liquidation.
Each exchange has different formula for collateral and liquidation, make sure you read it carefully.
Topic: Introducing lower leverage in 2x and above leveraging derivatives' exchanges (Read 77 times)
March 15, 2022, 05:27:45 AM
March 14, 2022, 06:18:01 AM
Margin, future, perpetual or whatever the means of leveraging, traders should know the more they leverage the more the assets used to open position can be liquidated. There are exchanges you can leverage even up to 200x, but the higher the liquidation.
It is good to note that leveraging is riskier, some traders will begin trading with 100x to 200x, but they will have no option than to later go for lower leverage, some people use 10x, 5x or 2x but some people want to reduce their leverage below 2x. Some exchanges can offer leverage trading below 2x but most exchanges do not, most exchanges offer 2x and above, but people can still trade on such exchanges while reducing their leverage below 2x which is the prupose I created this thread.
Note: if you want this to work, you will have to change from isolated mode to cross mode, though cross mode should be the default margin mode, but if it is isolated mode, then change it to cross mode.
How to open position below below 2x on such exchanges
Assuming you have $1000 in your future trading account and you want to open position with 1.5x
Use this formula
For 1.5x leverage = Total asset (A) multiply by leverage to be used(which is 1.5x) divided by 2x (2x which is constant and it is the leverage used to open position)
For 1.5x leverage = $1000 multiply by 1.5x divided by 2x
= $1000 * 1.5x ÷ 2x
= $750
That means you can open 2x leverage position with $750, you still have $250 in your future trading account, this makes the liquidation price to be in same price 1.5x leverage will be liquidated, the profit loss and liquidation price will be in form of 1.5x leverage which it is actually is.
You can use the calculation for 1.1x to 1.9x, all you need to do is to change the 1.5x leverage in the calculation to the leverage below 2x of your choice. You can also use any amount of asset of your choice, you will just need to change the $1000 that I used to the one you want to use which can probably be below $1000 because you should trade with the amount you can afford to lose.
This means you can trade below 2x leverage on such exchanges as well which will help in attaining the profit and liquidation price that you wanted for the low leverage, but also can be the loss.
It is good to note that leveraging is riskier, some traders will begin trading with 100x to 200x, but they will have no option than to later go for lower leverage, some people use 10x, 5x or 2x but some people want to reduce their leverage below 2x. Some exchanges can offer leverage trading below 2x but most exchanges do not, most exchanges offer 2x and above, but people can still trade on such exchanges while reducing their leverage below 2x which is the prupose I created this thread.
Note: if you want this to work, you will have to change from isolated mode to cross mode, though cross mode should be the default margin mode, but if it is isolated mode, then change it to cross mode.
How to open position below below 2x on such exchanges
Assuming you have $1000 in your future trading account and you want to open position with 1.5x
Use this formula
For 1.5x leverage = Total asset (A) multiply by leverage to be used(which is 1.5x) divided by 2x (2x which is constant and it is the leverage used to open position)
For 1.5x leverage = $1000 multiply by 1.5x divided by 2x
= $1000 * 1.5x ÷ 2x
= $750
That means you can open 2x leverage position with $750, you still have $250 in your future trading account, this makes the liquidation price to be in same price 1.5x leverage will be liquidated, the profit loss and liquidation price will be in form of 1.5x leverage which it is actually is.
You can use the calculation for 1.1x to 1.9x, all you need to do is to change the 1.5x leverage in the calculation to the leverage below 2x of your choice. You can also use any amount of asset of your choice, you will just need to change the $1000 that I used to the one you want to use which can probably be below $1000 because you should trade with the amount you can afford to lose.
This means you can trade below 2x leverage on such exchanges as well which will help in attaining the profit and liquidation price that you wanted for the low leverage, but also can be the loss.
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