How to do leverage on AscendEX

Leverage trading on AscendEX offers increased potential profits and flexibility, but carries higher risks due to magnified potential losses, margin calls, and market volatility.

Nov 23, 2024 at 02:24 am

How to do Leverage Trading on AscendEX

Understanding Leverage Trading

Leverage trading, also known as margin trading, allows traders to amplify their potential profits and losses by borrowing funds from the exchange. This technique can significantly increase returns but also carries higher risks.

On AscendEX, leverage trading is available for a range of cryptocurrencies with varying leverage ratios. Choose an appropriate leverage ratio based on your risk tolerance and trading strategy.

Steps to Enable Leverage Trading on AscendEX

1. Create an AscendEX Account: If you don't already have one, sign up for an AscendEX account.
2. Verify Your Identity: Complete the KYC (Know Your Customer) process to verify your identity and unlock leverage trading capabilities.
3. Enable 2-Factor Authentication (2FA): Enhance the security of your account by enabling 2FA through an authenticator app.
4. Fund Your Account: Deposit cryptocurrencies into your AscendEX wallet to provide collateral for your leveraged trades.
5. Choose a Trading Pair: Select the crypto pair you want to trade on leverage, such as ETH/USD or BTC/USDT.
6. Configure Leverage Setting: In the 'Margin' section of the trading interface, specify the desired leverage ratio. Higher ratios increase potential returns but also magnify potential losses.
7. Set Stop-Loss Orders: Protect your capital by placing stop-loss orders to automatically sell your position if the market moves against you. Stop-loss orders limit potential losses.
8. Monitor Your Trades: Constantly monitor your leveraged trades, especially when market volatility is high. Make adjustments as needed to manage risk and optimize profits.
9. Close Your Position: Once you've achieved your desired profit target or wish to exit the trade, close your leveraged position to complete the transaction.
10. Repay Borrowed Funds: Use the funds from closing the trade to repay the borrowed funds and any interest accrued.

Advanced Leverage Trading Strategies

1. Ladder Trading: Divide your leverage into smaller positions and enter the market at different levels to minimize risk.
2. Hedging: Use futures contracts or other instruments to mitigate risk by offsetting losses in one trade with gains in another.
3. Scalping: Take advantage of small price movements in a short time frame for quick, frequent profits in less volatile markets.
4. Swing Trading: Hold leveraged positions for a few days or weeks to capture medium-term price trends.
5. Trend Following: Identify and trade along major market trends using leverage to amplify returns.

Benefits of Leverage Trading:

• Increased Potential Profits: Leverage can amplify profits by increasing the trading size.
• More Trading Opportunities: Access more trading opportunities with limited capital.
• Flexibility: Adjust leverage levels to match your risk tolerance and trading strategies.

Risks of Leverage Trading:

• Increased Potential Losses: Leverage can amplify both profits and losses, potentially leading to catastrophic losses if not managed properly.
• Margin Calls: Failure to maintain sufficient collateral can result in a margin call, forcing you to close positions at a loss.
• Volatility: Leverage magnifies market volatility, increasing the risk of sudden price swings leading to losses.

Conclusion:

Leverage trading can be a powerful tool for experienced traders, but it's crucial to understand the risks involved and use it with caution. By following the steps outlined above and implementing sound trading strategies, you can mitigate risks and maximize your potential returns. Remember, leverage trading is not for the faint of heart and should only be undertaken by traders who fully comprehend the potential consequences.