What is the use of adjusting leverage on AscendEX?

Adjusting leverage on AscendEX enables traders to increase their potential returns or capital efficiency, but cautions remain regarding the elevated risks associated with such a strategy.

Nov 24, 2024 at 09:08 pm

What is the Use of Adjusting Leverage on AscendEX?

Leverage is a powerful tool that can be used to magnify both profits and losses in cryptocurrency trading. By understanding how to use leverage effectively, traders can potentially increase their returns while managing risk.

AscendEX is a cryptocurrency exchange that offers a variety of leverage options for its users. Leverage can be used to trade spot, perpetual, and futures contracts. The amount of leverage available for each contract type varies, but it can be as high as 100x for perpetual contracts.

There are several benefits to using leverage on AscendEX. First, leverage can help to magnify profits. For example, if a trader has $1,000 and uses 10x leverage to buy a Bitcoin contract worth $10,000, they will profit $1,000 if the price of Bitcoin increases by 10%. Second, leverage can help to reduce the amount of capital required to trade. For example, the trader in the previous example would only need $1,000 to trade a $10,000 contract, instead of $10,000. Third, leverage can help to increase flexibility. By using leverage, traders can enter and exit positions more quickly and easily.

However, there are also several risks associated with using leverage. First, leverage can magnify losses as well as profits. For example, if the price of Bitcoin decreases by 10%, the trader in the previous example would lose $1,000. Second, leverage can lead to margin calls. A margin call occurs when the trader's account balance falls below a certain level. If a margin call is not met, the trader's positions will be liquidated. Third, leverage can increase the risk of slippage. Slippage is the difference between the price at which a trader enters or exits a position and the actual price at which the trade is executed.

How to Adjust Leverage on AscendEX

Adjusting leverage on AscendEX is a simple process. To adjust leverage, follow these steps:

1. Log in to your AscendEX account.
2. Click on the "Trade" tab.
3. Select the contract type you want to trade.
4. Enter the amount of leverage you want to use.
5. Click on the "Buy" or "Sell" button.

Tips for Using Leverage on AscendEX

Here are a few tips for using leverage on AscendEX:

• Use leverage wisely. Leverage can be a powerful tool, but it can also be dangerous. Only use leverage if you understand the risks involved.
• Start with a small amount of leverage. If you are new to using leverage, start with a small amount, such as 2x or 5x. You can then gradually increase the amount of leverage you use as you become more experienced.
• Use stop-loss orders. Stop-loss orders can help to protect you from losses if the price of a cryptocurrency moves against you.
• Monitor your account balance. It is important to monitor your account balance when using leverage. If your account balance falls below a certain level, you may receive a margin call.
• Be prepared to liquidate your positions. If you receive a margin call, you may be required to liquidate your positions.