How to play Coinbase leveraged trading

To enable leveraged trading on Coinbase Pro, navigate to the "Settings" tab, select the "Leverage" section, and activate the "Enable leveraged trading" option.

Nov 16, 2024 at 12:41 am

How to Play Coinbase Leveraged Trading

Coinbase Leveraged Trading is a feature offered by Coinbase that allows users to borrow funds from Coinbase to trade with. This can be a great way to increase your potential profits, but it also comes with increased risk.

Before beginning, it is important to understand the following terms:

• Leverage: The amount of money you are borrowing from Coinbase to trade with, expressed as a multiplier (e.g. 1x, 2x, 3x).
• Margin: The amount of your own money that you are using as collateral for the loan.
• Liquidation: what happens if the market moves against you and your margin is exhausted. Coinbase will then sell your assets to cover the loan.

Steps to Playing Coinbase Leveraged Trading

1. Create a Coinbase Pro account.

Coinbase Pro is the platform where you will be able to trade with leverage. The Pro account is a different from regular Coinbase account, it offers more advanced trading features. To create an account, go to the Coinbase website and click on the "Pro" tab.

1. Enable leveraged trading.

Once you have created a Coinbase Pro account, you will need to enable leveraged trading. To do this, go to the "Settings" tab and click on the "Leverage" tab. Then, click on the "Enable leveraged trading" button.

1. Choose a trading pair.

The next step is to choose a trading pair. A trading pair is two cryptocurrencies that are being traded against each other. For example, you could trade BTC/USD, ETH/USD, or LTC/USD.

1. Choose your leverage.

Once you have chosen a trading pair, you will need to choose your leverage. The leverage you choose will determine how much money you are borrowing from Coinbase to trade with. The higher the leverage, the more money you are borrowing and the greater your potential profits. However, higher leverage will also increase your risk of liquidation.

1. Place your trade.

Once you have chosen your leverage, you can place your trade. To do this, click on the "Buy" or "Sell" button and enter the amount of cryptocurrency you want to trade. You will also need to specify the price at which you want to trade.

1. Monitor your trade.

Once you have placed your trade, it is important to monitor it closely. The market can move quickly, and you may need to adjust your position accordingly. To monitor your trade, go to the "Orders" tab.

Risks of Coinbase Leveraged Trading

As mentioned above, leveraged trading comes with increased risk. The following are some of the risks to be aware of:

• Liquidation: If the market moves against you and your margin is exhausted, your assets will be sold and you will lose your money.
• Margin calls: If your account balance falls below the required margin, you will receive a margin call and will need to add more funds to your account.
• Additional Fees: Leveraged trading comes with additional fees. These fees can vary depending on the exchange you are using and the amount of leverage you are using.
• Advanced Knowledge: Successful leveraged trading requires advanced knowledge of the cryptocurrency markets. It is not suitable for beginners.