Category: 5. Trading with Leverage

Learn Crypto is dedicated to explaining basic concepts within cryptocurrency to people who are new to the subject. Given the level of potential risk leverage trading is something that really should be left to very experienced traders.  You might think that reading this article is a waste of time; that is far from the truth.…

As already mentioned, trading cryptocurrency with leverage amplifies risk, and should only be considered by experienced traders. Simply applying leverage and letting rip would be extremely reckless. The following basic tactics should be used to mitigate the risk. Position Sizing The most important consideration with leverage trading (which applies to trading full stop) is not…

Trading with leverage is surprisingly simple for something that is so risky, but some exchanges have actually simplified the concept even further by creating leveraged tokens. A leveraged token is just another way of amplifying risk but without having to provide collateral or consider margin levels.  The price movement is simply magnified at an agreed…

Leverage works through a cryptocurrency exchange or brokerage granting you the right to trade positions that are multiples of your trading capital. You might for example have $1,000 of trading capital. If you executed a regular (non leveraged) trade that realised a 10% gain you would make $100 (1,000*0.10) and end up with $1,100. If…

What you’ll learn What is leveraged trading An example leveraged trade Leveraged tokens The risks of leveraged trading Trading cryptocurrency involves risk. There is no way to sugar-coat that message. Its riskiness is actually what attracts a lot of traders. Prices move significant amounts over very short periods of time, and traders see that volatility…