Trading Leverage | Bitcointalksearch.org

tvplus006

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Quote from: OcTradism on April 29, 2024, 12:16:43 AM

I know you gave an example only but in this volatile market, stop loss with 1 - 2 % will be terrible. I know stop loss, stop limit orders are very helpful to minimize loss and avoid serious loss in a market crash but 1 - 2 % should not be used as a limit to exit the market with either Stop loss or Stop limit order.

Yes, indeed, I have given these figures as an example. Nevertheless, these figures are quite real if you open a long position from support and, accordingly, short from resistance. In this case, you will have a very small loss if the price moves in the opposite direction to your expectations.

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Quote from: shinratensei_ on April 29, 2024, 01:42:36 AM

Quote from: Lakai01 on April 25, 2024, 02:06:19 PM

At the risk of repeating myself:
Leverage is only needed - and should only be used - in forex trades. However, trading platforms for forex support significantly higher leverage than x5 or x10, sometimes even x500. The reason for this is simply that the daily fluctuation margins in forex trading are so small that you need such high leverage to avoid having to invest huge amounts of capital.

However, this factor does not apply to Bitcoin or crypto in general, where the daily fluctuations are already so enormous that trading without leverage is already worthwhile with small positions ... or not.

the difference of leveraging with forex and crypto in forex it incentivizes faster market movement by using high leverage with the smallest change of a price we can get big profit at the risk of the captal itself.
meanwhile with crypto its just purely leveraging for the purpose of getting bigger profit I mean in forex the purpose is also kinda the same to get bigger profit but without it the forex market would be boring.

So there is no difference after all Wink

I would also like to have significantly more movement with small stakes in crypto. You don't necessarily have to use leverage in Forex either. For example, if you enter a trade with 1 billion dollars, it doesn't matter if the market only moves 0.001%, the movement is still enormous in terms of FIAT movements.

Don't get me wrong, I have absolutely nothing against an exchange offering leverage if clients want it. But as a crypto trader in particular, you have to be aware of what you are doing here and how quickly leverage can lead to your account being completely wiped out. Unfortunately, I'm not sure whether exchanges are doing enough due diligence and should, for example, block leverage for newly registered customers anyway.

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Quote from: Lakai01 on April 25, 2024, 02:06:19 PM

At the risk of repeating myself:
Leverage is only needed - and should only be used - in forex trades. However, trading platforms for forex support significantly higher leverage than x5 or x10, sometimes even x500. The reason for this is simply that the daily fluctuation margins in forex trading are so small that you need such high leverage to avoid having to invest huge amounts of capital.

However, this factor does not apply to Bitcoin or crypto in general, where the daily fluctuations are already so enormous that trading without leverage is already worthwhile with small positions ... or not.

the difference of leveraging with forex and crypto in forex it incentivizes faster market movement by using high leverage with the smallest change of a price we can get big profit at the risk of the captal itself.
meanwhile with crypto its just purely leveraging for the purpose of getting bigger profit I mean in forex the purpose is also kinda the same to get bigger profit but without it the forex market would be boring.

despite the controversy though I really like this feature, with small money you can turn it into bigger ones and if you lost well you lost anyone using leverage should know they are risking their capital more than anyone else the higher the leverage they choose, though in crypto trading, most of the trading platform only offers 25X leverage probably above that it will not make sense since the price movement and overall volatility of the entire crypto market is really volatile that a little shake your 100x leverage gonna gone in an instant.

still for newbies they need to watch out, leverage isn't for amateur, even pros are carefully leveraging their capital.

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Quote from: tvplus006 on April 28, 2024, 06:42:00 PM

I think that in this case it is necessary to use a stop loss. In this case, you can reduce your losses if the price moves in the opposite direction to your expectations, for example 1-2%. Thus, your loss will not be 500 dollars, but 50-100, depending on the level at which you set the stop loss.

I know you gave an example only but in this volatile market, stop loss with 1 - 2 % will be terrible. I know stop loss, stop limit orders are very helpful to minimize loss and avoid serious loss in a market crash but 1 - 2 % should not be used as a limit to exit the market with either Stop loss or Stop limit order.

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Quote from: Bushdark on April 25, 2024, 02:11:23 PM

Leveraging in trading should be one of the most important aspects in trading and we need to earn so that we don't end up doing the wrong thing because we don't have the knowledge or skill to go about it. It is very important for us to try as much to get the skill in trading with ease not trying too hard to make things happen. Leveraging has been the problem if many traders because they don't want to calm down and learn how to trade successful or trade with being greedy. Greed has been the problem of many gamblers and we need to make sure everything gets resolved as soon as possible.

It's reasonable because leverage is a a double edge sword. You can buy double or 10x amount of coin with the amount you invested but you have a margin limit to carry on. Once you exceed that margin threshold, all your money at risk will be gone faster. That if you overleverage, your stop loss will be too tight and not enabling your trade to breath for some market correction. Leverage is only helpful when you use it the right way.

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Quote from: Alphakilo on April 28, 2024, 01:20:51 PM

...For example we take $1,000 and bet on the rising price of bitcoin with a 5x leverage if the price goes up by 10% we make a profit of $500 which is a gain of 50%. However, if the price falls by 10% we make a loss of $500 and lose half of our initial amount. ..

I think that in this case it is necessary to use a stop loss. In this case, you can reduce your losses if the price moves in the opposite direction to your expectations, for example 1-2%. Thus, your loss will not be 500 dollars, but 50-100, depending on the level at which you set the stop loss.

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Trading with leverage naturally always involves risks that you should always be aware of it can of course happen that the price does not move in the desired direction and just as profits are multiplied losses are also multiplied. For example we take $1,000 and bet on the rising price of bitcoin with a 5x leverage if the price goes up by 10% we make a profit of $500 which is a gain of 50%. However, if the price falls by 10% we make a loss of $500 and lose half of our initial amount. If we take this to an extreme and say we use a 100x leverage we would double our money if the price only goes up by 1% but if the price goes down by 1% we would lose all of our invested capital.

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Quote from: Assface16678 on April 16, 2024, 05:43:42 PM

If you are not experienced in trading, then dont mess with the leverage. Yes, leverage is increasing the potential profit you can have in your trade, but also the risk. If you mess up with leverage, even a slight down trade in your trade might cause your account to be liquidated. Even experienced and expert traders don't use much leverage because they know how dangerous it is and they know that leverage is not the solution for everything or easy money. Remember, in trading, if you take a shortcut and rush things, then expect that you might stumble once, and it will keep on repeating until you learn your lesson. I've tried using leverage, and of course it didn't go well. That's why, from that experience, I never use it again. That feature will never be gone because trading platforms know how greedy a trader is sometimes, and it will benefit them and also the narket.

Before worrying about leverage, we must first understand trading well. If we can gain knowledge about trading, then if we trade, we will definitely get success through trading. There are many newbies who bother with Liberace without having a good knowledge about trading, I would say for them, of course, in the case of trading, first of all you need to have enough knowledge about trading. In the case of trading, we must have a long-term plan, we must check the market, and if we trade patiently, we will definitely become successful traders in the future.

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I see on X (CT) everyday that newbies are advised to stay aware from leverages due to how inherently risky it is to open and hold a leveraged position especially in times when market is volatile in the other direction of one's trade. Despite all the negative opinions and feedback by KOLs and influencers, I do think that leverages are net positive for the space when it is done with (aka with proper risk management as @tvplus006 has already said).

If done right, leverage can give you the much needed liquidity to make good amount of profit enough to set you up for life because in trading, liquidity is king.

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Quote from: hd49728 on April 26, 2024, 08:29:07 AM

Quote from: tvplus006 on April 25, 2024, 06:08:15 PM

After all, everyone knows that one of the advantages of futures trading is opening short positions, which is impossible to do in the spot market. And since we are dealing with a highly volatile market, then you can choose for yourself the minimum leverage of x1 to open a short position.

With Margin and Futures trading, people can open short position that they can not do with Spot trading. However, with Margin and Futures trading, they will have to face with more manipulation from market whales and exchanges.

Centralized exchanges have data on opened positions of their users and they can use available data to manipulate market price to kill long and short positions. At the end, centralized exchanges are winners. People will long or short positions will be liquidated but they can not complain and can not get money back as it is part of the game with Margin and Futures trading.

I understand that margin trading is not acceptable for all participants, but I am sure that everyone who lost money using leverage, they all violated risk management. And the fact that you cannot adhere to the risk management strategy is not a reason to refuse to open short positions when the market is in a bearish stage.

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Quote from: Rengga Jati on April 25, 2024, 05:28:51 PM

Quote from: alastantiger on April 16, 2024, 05:12:15 PM

In life, leverage is good as it helps to help us accomplish a goal faster. But in trading, leverage in trading is clearly a bad deal. It messes things up for both the traders and the market. So my question is why do exchanges still offer them. They keep pushing it to traders like favourite snack?

I actually never thought that trading with leverage was good for us, except for professional traders who are already experts and are used to leverage. Trading with leverage is something that carries high risk. Yes, indeed, it can really make us get extraordinary profits. But on the contrary, it can also make us lose our money quickly. especially if we play with high leverage, and without sufficient knowledge. So, if you are not ready, then it is better not to leverage, or just use small leverage with good funds management.

well thats kinda the essence of leverage honestly usually I think the exchange will always give warning of the side effect of using the leverage feature it is definitely described as a double edged sword where it grant opportunity to people at the cost of their capital.
most of the future trader using leverage out there I think are people that are experienced already, if they are just some random newbies that are leveraging their asset it might means they are greedy and will probably just lost the money along the way.
if you are experienced in a nutshell feel free to use the leverage feature, but if you think your newbie, you know whats best for you maybe the spot trading is already good enough a place to start.
i think its as simple as that.
its just the right feature provided by exchange to give people the chance to do much more than their capital actually allowed to do and I think there's no problem if an exchange having it as a feature.

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Quote from: tvplus006 on April 25, 2024, 06:08:15 PM

After all, everyone knows that one of the advantages of futures trading is opening short positions, which is impossible to do in the spot market. And since we are dealing with a highly volatile market, then you can choose for yourself the minimum leverage of x1 to open a short position.

With Margin and Futures trading, people can open short position that they can not do with Spot trading. However, with Margin and Futures trading, they will have to face with more manipulation from market whales and exchanges.

Centralized exchanges have data on opened positions of their users and they can use available data to manipulate market price to kill long and short positions. At the end, centralized exchanges are winners. People will long or short positions will be liquidated but they can not complain and can not get money back as it is part of the game with Margin and Futures trading.

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Quote from: Lakai01 on April 25, 2024, 02:06:19 PM

...However, this factor does not apply to Bitcoin or crypto in general, where the daily fluctuations are already so enormous that trading without leverage is already worthwhile with small positions ... or not.

You shouldn't be so categorical) After all, everyone knows that one of the advantages of futures trading is opening short positions, which is impossible to do in the spot market. And since we are dealing with a highly volatile market, then you can choose for yourself the minimum leverage of x1 to open a short position.

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Quote from: alastantiger on April 16, 2024, 05:12:15 PM

In life, leverage is good as it helps to help us accomplish a goal faster. But in trading, leverage in trading is clearly a bad deal. It messes things up for both the traders and the market. So my question is why do exchanges still offer them. They keep pushing it to traders like favourite snack?

I actually never thought that trading with leverage was good for us, except for professional traders who are already experts and are used to leverage. Trading with leverage is something that carries high risk. Yes, indeed, it can really make us get extraordinary profits. But on the contrary, it can also make us lose our money quickly. especially if we play with high leverage, and without sufficient knowledge. So, if you are not ready, then it is better not to leverage, or just use small leverage with good funds management.

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Quote from: alastantiger on April 16, 2024, 05:12:15 PM

In life, leverage is good as it helps to help us accomplish a goal faster. But in trading, leverage in trading is clearly a bad deal. It messes things up for both the traders and the market. So my question is why do exchanges still offer them. They keep pushing it to traders like favourite snack?

That is how they attract new traders. This is business and leveraging ideas makes them more money. If you are a trader with only have small capital, you could really think this is the solution. Well, this also helps them to start but the exchange of such offer is quite not good especially if you lose them all. That is why if you are a beginner, this is highly discouraged in order not to face the huge consequences. It is better to just borrow money from your friends or from the locals rather than use this leverage feature of the exchange. Or the best thing is not to do any of these ways in order not to compromise our finances.

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Leveraging in trading should be one of the most important aspects in trading and we need to earn so that we don't end up doing the wrong thing because we don't have the knowledge or skill to go about it. It is very important for us to try as much to get the skill in trading with ease not trying too hard to make things happen. Leveraging has been the problem if many traders because they don't want to calm down and learn how to trade successful or trade with being greedy. Greed has been the problem of many gamblers and we need to make sure everything gets resolved as soon as possible.

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Quote from: Cookdata on April 25, 2024, 12:51:35 PM

Leverage trading didn't start with crypto trading, I don't understand why we see it as big deal been utilized by exchange. We have leverage and margin options on brokers that provide forex trading to many customers and they are satisfied. The only problem here in crypto is that a lot of exchanges knows that traders love high leverage because they are too greedy that's why you see leverage as high to 25x when on brokers you will see a max of 5 to 10x on regulated brokers.

At the risk of repeating myself:
Leverage is only needed - and should only be used - in forex trades. However, trading platforms for forex support significantly higher leverage than x5 or x10, sometimes even x500. The reason for this is simply that the daily fluctuation margins in forex trading are so small that you need such high leverage to avoid having to invest huge amounts of capital.

However, this factor does not apply to Bitcoin or crypto in general, where the daily fluctuations are already so enormous that trading without leverage is already worthwhile with small positions ... or not.

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Quote from: Oshosondy on April 16, 2024, 05:24:51 PM

If you have $100 and the exchange has trading fee of 0.05%. In each position you open with 1x leverage with the $100, that is $0.05 as the trading fee of the position you opened.

If you have $100 and use 10x leverage. The trading fee will go 10 times higher. The trading fee is $0.5.

If you go 100x. The trading fee is $5.

Exchanges make money as the leverage increases. The exchanges do not care if you lose or not, what the exchanges care about is the profit they want to make.

Absolutely right, exchange market want to get more higher fees trading trough leverage and each time transaction with short or long position opening has bigger fees than spot trading or without leverage. Get maximum leverage give more bigger fees for exchange market and your explain 100% correct how many exchange added many new coins in future market listing.
Get small fees with manual trading or spot trading without use leverage, but when trader try with that feature market get much benefit with trading fees except still has funding fees when position up to 8 hours without get close. Much fee transaction earned by exchange market with their exchange have leverage or future trading feature, I don't think with this kinds of trading will close by market in the future except some local exchange market still not allow with this feature seems their government regulation.

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Quote from: alastantiger on April 16, 2024, 05:12:15 PM

In life, leverage is good as it helps to help us accomplish a goal faster. But in trading, leverage in trading is clearly a bad deal. It messes things up for both the traders and the market. So my question is why do exchanges still offer them. They keep pushing it to traders like favourite snack?

Leverage trading didn't start with crypto trading, I don't understand why we see it as big deal been utilized by exchange. We have leverage and margin options on brokers that provide forex trading to many customers and they are satisfied. The only problem here in crypto is that a lot of exchanges knows that traders love high leverage because they are too greedy that's why you see leverage as high to 25x when on brokers you will see a max of 5 to 10x on regulated brokers.

We still have some leverage exchanges thag provide as high as 125x leverage for traders to use and when you check those exchanges, you will see activity of traders going on live, this is to tell you that many traders love gambling on leverages rather than doing normal trading, so don't blame the leverage platforms, blame the people who go their to trade.

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Quote from: justdimin on April 25, 2024, 10:45:02 AM

Quote from: skarais on April 24, 2024, 11:32:10 AM

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I do agree that it is not clear with just small samples and we can't really make a big distinction out of this situation in the end. We need to make sure that we are hearing what people are saying of course and we help every person who comes to us with help, but that doesn't mean that we are going to end up with anything greater or bigger and our small sample size is not going to be the decision maker neither.

We just need to make sure that we are just seeing this as what it is, it is going to be just what our friends or so could make. That is why I believe that we are going to end up with anything major, it has to be the most important part and could definitely end up with just seeing what we could have done that eventually.

Good risk planning and management will likely produce good results. No trader is 100% successful without sacrificing time and money in the learning process, in fact they have to fall and fall before finally getting what they want.

Of course there is a lot of knowledge and advice that we need to consider from other users' experiences, it will definitely help us grow better. There is a long process before finally being successful, and each process will not always be easy. Market dynamics basically teach us to remain wise in making decisions, regardless of whether we are investors or traders.

Topic: Trading Leverage (Read 678 times)