Leverage In Crypto Trading, How It's Work And Why Trader Has To Use It In Crypto Currency
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Leverage In Crypto Trading |
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Basically when a trader want to do a trade in future trading then the crypto exchange gave him the crypto currency coins in the form borrowed assets which a trader can use to maximize his balance for trading.
If we have a 10$ in our wallet and we want to invest in the Ethereum coin then the crypto exchange on which we are doing trading provide us leverage and if we use the leverage 10x the mean is the that it's multiple to our balance.
It will boost our balance 10x and we can trading with high balance.Another important thing is that of we uses high leverage then their is a high chances of risk.
How Does It Work? |
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After depositing into the wallet for trading and we want to invest 1000$ in any crypto coin then we must have to own 10$ in our wallet for the 10x leverage and as i mentioned before it will boost our balance 10x and we can trade with 1000$ with borrowed assets.
For avoiding leverage we must have to deposited more balance according to our trade amount and that's called collateral in crypto currency.We must have to follows these things for using leverage in crypto trading.
Why We Have To Use It? |
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The first reason to use leverage in crypto trading is that i mentioned earlier it boost our balance and which can help us to do more trade for gaining profit.
The second reason to use the leverage in crypto trading is that we can maintain our collateral with the leverage and the collateral that we can main with high balance, we can maintain it with some leverage.
Another major reason is that it shows high balance according to our deposited balance and that's it's benefits and if the market is according to trade it's gives us high profit.
Another reason of leverage in crypto trading is that it's double edge for the traders and the first edge is that it can boost the balance and second edge is that if the market is well balanced according to our trading then it will give us high profit.
Regards By |
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@tipu curate
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Dear @azmat545 ,
We appreciate your active participation and contributions to our community. To ensure a positive environment for all members, we have implemented a set of guidelines to maintain respectful and constructive discussions while upholding community guidelines.
You have explained about leverage in cryptocurrency trading, you have also explained how it works and why we should use them.
However, I also expected you to make a list of the risk involved in this form of trading so that users don't get caught off guard.
Please endeavor to increase your post quality next time.
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