MEXC leverage trading tutorial

Leverage trading helps amplify trading profits and losses, offering higher returns but also increased risk, requiring thorough understanding and prudent use.

Nov 11, 2024 at 07:24 am

MEXC Leverage Trading Tutorial

Understanding Leverage Trading

Leverage trading allows traders to amplify their positions by borrowing funds from the exchange. This amplifies both potential profits and losses. It's crucial to thoroughly understand leverage before engaging in it.

Step 1: Opening an Account and Depositing Funds

• Create an account on MEXC.
• Complete the KYC verification process.
• Deposit funds into your account using supported methods like cryptocurrency transfers or fiat currency deposits.

Step 2: Choosing a Trading Pair and Leverage Level

• Select a trading pair, e.g., BTC/USDT.
• Decide on the leverage level, which can range from 1x to 125x. Higher leverage provides greater potential returns but also higher risk.

Step 3: Placing an Order

• Determine the order type (limit order, market order, stop order).
• Input the order details, including price, quantity, and leverage ratio.
• Confirm the order and execute it.

Step 4: Monitoring and Managing Your Position

• Monitor your position's performance, including current price, PNL (Profit and Loss), and margin level.
• Adjust your leverage or position size as needed to manage risk.
• Consider stop-loss orders to mitigate potential losses.

Step 5: Closing Your Position

• To close your position, place an order in the opposite direction.
• Once both sides of your trade are filled, your position will be closed.

Advanced Features in MEXC Leverage Trading

Cross Margin Mode

• Allows using the total account balance as collateral for all open positions.
• Reduces the risk of liquidation from insufficient margin on a specific pair.

Isolated Margin Mode

• Restricts margin usage to individual trading pairs.
• Prevents a drawdown in one position from affecting others.

Auto-Deleveraging Mechanism

• When the margin level drops below a predefined threshold, MEXC automatically reduces leverage to prevent liquidation.

Risk Management Tips

• Use leverage prudently, only when you fully understand the risks.
• Start with low leverage ratios and gradually increase as you gain experience.
• Diversify your portfolio to spread risk across multiple assets.
• Adopt risk management strategies like stop-loss orders and position sizing.
• Monitor your positions regularly and adjust them as necessary.

Warnings

• Leverage trading can lead to substantial losses if not used responsibly.
• Always consider the potential for liquidation and the impact it may have on your financial situation.
• Do not invest more than you can afford to lose.