CoinEx Leveraged Short Selling Tutorial

Leveraged short selling allows for amplified trading profits but necessitates thorough risk awareness and careful execution on exchanges like CoinEx, where the tutorial provides step-by-step guidance for the process.

Nov 25, 2024 at 04:15 am

CoinEx Leveraged Short Selling Tutorial

Leveraged short selling is an advanced trading strategy that amplifies potential profits but also involves higher risks. This tutorial will guide you through the steps of leveraged short selling on CoinEx, one of the leading cryptocurrency exchanges.

Prerequisites:

• Register and verify a CoinEx account
• Fund your account with USDT or other supported cryptocurrencies
• Enable 2FA for enhanced security

Steps:

1. Understanding Leveraged Short Selling

Leveraged short selling involves borrowing assets from an exchange to sell at the current market price, hoping to buy them back later at a lower price. The difference between the initial sale price and the repurchase price, minus borrowing costs, represents the profit. Leveraged short selling amplifies the potential profits and losses by a factor known as leverage.

2. Choosing a Trading Pair and Margin Mode

On CoinEx, select the trading pair you want to short sell, such as BTC/USDT. Next, choose the "Margin" trading mode to access leveraged trading options. CoinEx offers leverage options ranging from 3x to 10x. Higher leverage means a higher potential for profits but also greater risks of losses.

3. Calculating the Position Size

Determine the position size (amount of assets to borrow) based on your risk tolerance and account balance. Remember that the potential profit/loss is directly proportional to the position size. Calculate the position size carefully to avoid the risk of liquidation.

4. Placing the Short Order

Enter the desired position size and leverage in the order form. Double-check the terms before confirming the order. Once the order is placed, you will sell the borrowed assets at the current market price.

5. Leverage Interest and Maintenance Margin

Leveraged short selling incurs an hourly interest charge, which reduces your potential profit. CoinEx displays the leverage interest rate and indicates the minimum required maintenance margin to avoid liquidation.

6. Monitoring Your Short Position

Track the performance of your short position by monitoring the real-time price of the underlying asset. Adjust the position size or close the order if the price movement doesn't favor your trade.

7. Closing the Short Position

To close the short position and repay the borrowed assets, buy back the same amount of assets at the current market price. The difference between the initial sale price and the repurchase price, minus borrowing costs, determines your profit/loss.

8. Risk Management

Leveraged short selling carries significant risks. Always trade within your risk tolerance, use leverage cautiously, and consider stop-loss orders to limit potential losses.