How to play AscendEX leverage

Playing AscendEX leverage involves using borrowed funds to magnify returns while understanding the risks of potential losses due to market fluctuations.

Nov 23, 2024 at 02:18 pm

How to Play AscendEX Leverage: A Beginner's Guide

Introduction

Leverage trading in cryptocurrency can be a powerful tool for increasing returns, but it also comes with significant risks. AscendEX offers a user-friendly platform for leveraged trading, allowing traders of all levels to access this exciting market. This guide will provide a comprehensive overview of how to play AscendEX leverage, including step-by-step instructions, risk management strategies, and advanced trading techniques.

Step 1: Understanding Leverage and Margin Trading

Leverage in trading refers to the use of borrowed funds to amplify the potential returns of a trade. In the context of cryptocurrency, leverage can magnify both profits and losses. Margin trading is a form of leverage trading where traders borrow a portion of the funds needed to open a position. Margin trading allows traders to control a larger position size than their account balance would normally allow.

When trading with leverage, it is essential to understand the risks involved. The potential for increased profits is balanced by the potential for larger losses. If the market moves against the trader's position, they may be required to cover margin calls, which can lead to significant financial losses.

Step 2: Opening an AscendEX Account

To play AscendEX leverage, you will need to register for an account on the AscendEX platform. The registration process is straightforward and can be completed in a few minutes. Once your account is verified, you will need to fund the account with cryptocurrency to begin trading. AscendEX supports a wide range of cryptocurrencies, including Bitcoin (BTC), Ethereum (ETH), and Tether (USDT).

Step 3: Configuring Leverage Settings

Before opening a leveraged position, it is crucial to configure the leverage settings to align with your risk tolerance and trading strategy. AscendEX offers a flexible range of leverage ratios, from 1:1 to 100:1. The leverage ratio determines the ratio of borrowed funds to the trader's own funds.

For example, a leverage ratio of 10:1 means that for every $1 of capital you contribute, you can trade up to $10. While higher leverage can increase potential returns, it also amplifies potential losses. Beginner traders are recommended to use lower leverage ratios until they gain experience.

Step 4: Selecting a Trading Pair

AscendEX offers a diverse range of trading pairs for leveraged trading. Trading pairs represent the two cryptocurrencies that are being traded against each other. For example, the BTC/USDT pair represents Bitcoin being traded against Tether.

When selecting a trading pair, consider the market volatility, liquidity, and trading volume. Higher volatility pairs can offer greater profit potential but also pose higher risks. Liquidity refers to the ease of entering and exiting trades without incurring significant price slippage. Volume indicates the number of traders actively trading the pair, and higher volume pairs are generally more liquid.

Step 5: Opening a Leveraged Position

Once you have selected a trading pair and configured the leverage settings, you can open a leveraged position. AscendEX provides two types of orders for leveraged trading: limit orders and market orders.

Limit orders allow you to specify a specific price at which you want to enter or exit a position. Market orders execute at the current market price. When placing a leveraged order, you will need to specify the size of the position you want to open. The position size is measured in the base currency of the trading pair.

Step 6: Managing Risk and Margin Calls

Risk management is crucial in leveraged trading. One of the key risk management tools is the stop-loss order, which automatically closes your position if the market price reaches a predetermined level. Stop-loss orders help to limit potential losses.

AscendEX also utilizes a margin call system to protect traders from excessive losses. A margin call occurs when the equity in your trading account falls below a certain threshold. If a margin call is issued, you will be required to add