Are you new to crypto derivatives trading, have no clue how to start with leverage trading, how to use leverage or how to long/short a trade? Then read my leverage trading guide below! It’s a definitive guide with information how to start with leverage or margin trading!
Before we start, I would like to say that trading with leverage/margin can be EXTREMELY risky. It allows you to earn money QUICKLY, but allows you to lose money even more QUICKLY. This guide will explain the most important things about leverage trading, but is no guarantee to make money.
Let’s start with the most basic; where do we trade with leverage? Right now, I’m using Bybit. The reason for this is that it’s got an extremely easy and good looking UI which makes it easy to use. There’s also no KYC needed, and you’re able to trade with 100x leverage.
Everything in this guide will be explained and shown via screenshots on Bybit. My advice would be to start there, and perhaps move on in the future when you’ve traded more often. To register, I’d appreciate it if you would use my referral link: https://partner.bybit.com/b/TradingGuide.
By using this link you’re getting lifetime 10% trading fee discounts. There’s also a deposit blast off bonus compaign going on right now, which gives you some extra money when registering and depositing. Basically, up to $4,150! So, when depositing $500 for example, you’re eligible to receive an extra $100!
Register and more info below:
https://partner.bybit.com/b/TradingGuide
Let’s start with a few important definitions on Margin Trading and explanations of them:
Long/Short positions
A long position basically means; you’re placing an offer, thinking the coin will go up.
A short position means the opposite; you’re placing an offer, thinking it will go down.
Cross/Isolated margin
Cross margin makes the exchange use your entire balance to prevent liquidation, while isolated means the initial margin will be isolated into a position from the available balance.
Leverage
Leverage is the multiple amount (X) you’re placing an offer with. For example, 10X leverage means: Say you open a LONG position with $100. What this means is that when the price goes up 1%, because of your 10x leverage, it’s as if the price went up 10%.
So, you would now have $110, instead of $101. However, the reverse is true as well. When the price goes DOWN 1%, it’s as if the price goes down 10% as well. Meaning you’re left with $90, instead of $99.
What this means as well, is that when the price goes down 10%, you would be left with $0. In this case you’re getting liquidated, and have lost the full $100, while the price only went down 10%.
Take Profit (TP’s) / Invalidation (Stop loss)
A take profit point is the point at which you would sell the long/short position, with a profit. Usually these points are set at supports or resistances. It’s a choice when youre content & decide to sell for a profit.
A stop loss means the price at which the position will be sold, to prevent further losses.
Let me explain the above definitions through a call that I’ve placed in my Discord group (https://discord.gg/altcryptotalk).
What this means is:
Open a long position whenever the price is between $2.88 & 2.913. Set your stop loss (auto sell) at $2.81. The target points to sell for profit are the TP’s.
Now that you know the risks, the definitions and the basics, let’s start trading! Like I said before, register at Bybit and deposit some funds. The register link in case you’ve missed it: https://partner.bybit.com/b/TradingGuide
Once you’ve registered, deposit some funds into your Derivatives account to get started!
Now, head to the derivatives trading section:
https://www.bybit.com/trade/usdt/BTCUSDT
I’ll show an example below of me opening a LONG position on #Bitcoin. The page would look like the image below.
Choose your desired leverage at the top right, let’s say we’re going for an isolated 10x leverage.
Next, choose a limit/market order (limit means you’re able to set a price, market means you’re executing the order IMMEDIATELY).
Let’s say we want to use 50% of our total available funds, then press the 50% button below and it will automatically enter a value to buy. And then all that’s left to do is choose whether you want a LONG position (going up), or a SHORT position (going down).
Congratulations! You’ve executed your first derivatives trade! Now sit back and either set a take profit/stop loss, sell it manually, or get liquidated! Let me show you an example of a trade that’s opened below, with explanations. Here I’ve opened a SANDUSDT LONG trade:
Entry price: The price where I entered
Mark price: The price it’s right now
Liq price: When I’ll lose all the money and be liquidated
Position Margin: Amount I’ve entered the trade with.
Unrealized P&L: Amount of money that’s made with %
Daily P&L: Amount of money you’ve made/lost that day.
TP/SL: Here you can automatically set a TP and stop loss. See image below after pressing Add.
This means it will automatically sell at $2.95, meaning I make 35.94% profit. It will also automatically sell at $2.85, meaning I will have a 50% loss, whichever comes first. You can manually close a trade by pressing ‘Limit’ or ‘Market’ at the trade overview screen (shown in tweet 19).
And there you have it! You are now able to open leveraged trades! Thanks a lot for reading my guide. Hope you guys have learned something from it! Don’t forget to have a look at my other (Free) guides that I’ve shared on here!
Join my Discord for everything crypto related, as well as Long/Short calls:
https://discord.gg/altcryptotalk
Register at ByBit using my ref. link for some of the best bonuses out there. You’re also getting the Supporter role in our Discord group if you do so: