Bithumb app leverage trading tutorial

Leverage trading on the Bithumb mobile app amplifies both profits and losses, necessitating a thorough understanding of leverage ratios, margins, and meticulous risk management.

Nov 10, 2024 at 12:50 pm

Bithumb App Leverage Trading Tutorial

Leverage trading allows traders to amplify their buying power, potentially increasing their profits. However, it also magnifies losses if the market moves against them. This comprehensive tutorial will guide you through the ins and outs of leverage trading on the Bithumb mobile app, ensuring you make informed decisions while maximizing your potential gains.

Step 1: Understand Leverage

• Leverage Ratio: This ratio determines how much capital is borrowed from the exchange to enhance your buying power. Higher leverage ratios amplify both profits and losses.
• Margin: The amount of your own capital used as collateral to open a leveraged trade. Margin is expressed as a percentage of the total trade value.
• Collateral: Your margin plus any unrealized profits or losses in your leveraged positions.

Step 2: Enable Leverage Trading

• Navigate to the "Settings" section in the Bithumb app.
• Select "Trading Settings" and then "Enable Margin Trading."
• Input your preferred leverage ratio and margin amount.
• Confirm the terms and conditions.

Step 3: Choose a Trading Pair

• Select the pair you wish to trade (e.g., BTC/USDT).
• Ensure that leverage trading is available for the chosen pair.

Step 4: Calculate Position Size

• Determine the position size you wish to trade.
• Calculate the amount of your own capital used as margin based on the leverage ratio.
• Ensure you have sufficient collateral to cover potential losses.

Step 5: Execute the Trade

• Select "Buy/Sell" and input your position size.
• Choose "Margin Trading" from the order type options.
• Confirm the order details, including the leverage ratio and margin amount.

Step 6: Monitor and Manage Risk

• Regularly monitor the market performance and your leveraged positions.
• Maintain sufficient collateral to avoid potential margin calls and liquidations.
• Adjust your leverage ratio or margins as needed to manage risk.

Step 7: Close the Position

• To close the leveraged position, navigate to the "Open Orders" section.
• Select the position you wish to close and input the amount to sell or buy back.
• Confirm the order details and close the position.

Step 8: Calculate Profit or Loss

• Once the position is closed, calculate your profit or loss.
• Consider the initial investment, leverage ratio, and any unrealized gains or losses during the trade.

Step 9: Advanced Tips

• Use leverage trading wisely and only with a clear understanding of the risks involved.
• Consider hedging your positions to mitigate risk.
• Set realistic profit targets and stop-loss orders to protect your capital.
• Practice risk management techniques to minimize potential losses.

Remember: Leverage trading is not suitable for all investors and should only be used by experienced traders who fully comprehend the associated risks.