How to use leverage on CoinEx

CoinEx's leverage trading feature allows traders to amplify their potential profits but requires careful risk management to avoid magnified losses.

Nov 25, 2024 at 02:36 pm

How to Utilize Leverage on CoinEx: A Comprehensive Guide

Introduction

Leverage trading on crypto exchanges, such as CoinEx, presents traders with the opportunity to amplify their potential profits but also magnifies their risk exposure. This comprehensive guide will delve into the intricacies of leverage trading on CoinEx, providing a step-by-step approach to help traders navigate this powerful tool effectively.

Step 1: Understand Leverage

• Leverage refers to the practice of borrowing funds to increase the size of a trading position, allowing traders to gain exposure to assets beyond their available capital.
• On CoinEx, leverage ratios range from 3x to 100x, with specific limits varying depending on the trading pair.
• Leverage effectively magnifies both potential profits and losses, amplifying market movements and requiring traders to exercise caution and sound risk management practices.

Step 2: Enable Leverage Trading

• Access your CoinEx account and navigate to the "Margin" section.
• Click the "Enable Margin Trading" button and read the terms and conditions carefully.
• Select the desired leverage ratio and confirm your selection.

Step 3: Transfer Funds to Margin Account

• Once leverage trading is enabled, you must transfer funds from your spot wallet to your margin account.
• Navigate to the "Transfer" tab within the "Margin" section.
• Specify the amount you wish to transfer and confirm the transaction.
• Alternatively, you can create a new order directly from the trading interface and select "Margin" as the account type.

Step 4: Place a Leverage Trade

• From the trading interface, select the desired trading pair and navigate to the "Leverage" tab.
• Adjust the leverage ratio to your desired level.
• Enter the desired order type (e.g., market, limit, stop-limit), price, and quantity.
• Review the order details, including the estimated liquidation price, and confirm the trade.

Step 5: Monitor and Manage Margin Positions

• Monitor the performance of your leverage trades closely using the "Positions" tab within the "Margin" section.
• Track your unrealized profit/loss, margin ratio, and liquidation price.
• Adjust your leverage or close the position if necessary to manage risk and secure profits or minimize losses.

Step 6: Close Leverage Trade

• When ready to close the leverage trade, navigate to the "Positions" tab within the "Margin" section.
• Select the desired trade and click the "Close" button.
• Enter the desired quantity or specify a price for a limit order.
• Confirm the trade to close the position and transfer the proceeds back to your spot wallet.

Additional Considerations for Leverage Trading on CoinEx

• Liquidation Price: The liquidation price is the point at which your position will be forcibly closed due to insufficient margin. Monitor this level closely and adjust your position or leverage ratio accordingly.
• Margin Call: If your margin ratio falls below the maintenance margin level, you will receive a margin call requiring you to either increase your margin balance or close positions.
• Risk Management: Leverage trading comes with significant risks. Use appropriate risk management techniques such as stop-loss orders, monitoring your positions, and maintaining a healthy margin ratio.
• Volatility and Market Conditions: Leverage trading magnifies market volatility. Consider market conditions and your risk tolerance before employing leverage.