How to play LBank 5x leverage

By selecting a trading pair, leverage level, and position direction, traders can initiate a leveraged trade on LBank, amplifying potential profits but also subjecting themselves to increased risk.

Nov 26, 2024 at 06:02 pm

How to Play LBank 5x Leverage: A Step-by-Step Guide

Step 1: Choosing a Trading Pair and Position

Navigate to the "Leverage Trading" section on LBank's website or mobile app.
Select the trading pair you wish to trade (e.g., BTC/USDT).
Choose your trading position (long or short). A long position indicates anticipation of the asset price going up, while a short position suggests anticipation of a price decline.

Step 2: Setting Leverage and Placing an Order

Choose the desired leverage level (2x, 3x, or 5x). Higher leverage amplifies potential profits but also increases risk.
Input the amount of margin (base asset) you want to use.
Specify the entry price, order type (limit or market), and order size (number of contracts).

Step 3: Managing Risk and Monitoring Position

Set stop-loss and take-profit orders to mitigate potential losses and lock in profits.
Monitor your position's margin ratio and liquidation price to ensure it stays within acceptable limits.
Consider hedging strategies or risk management tools to reduce exposure to adverse price movements.

Step 4: Closing the Position

When the desired profit or loss target is reached, close the position by executing an opposite order (e.g., if you took a long position, close it by selling an equal number of contracts).
Withdraw your profits or margin back to your spot wallet.

Step 5: Understanding Liquidation and Margin Ratio

Liquidation occurs when the margin ratio falls below a critical level, typically 100%. In such cases, LBank will automatically close your position to protect against further losses.
Margin ratio is calculated by dividing the margin amount by the position's value. Maintaining a healthy margin ratio helps prevent liquidation.

Step 6: Margin Call and Forced Liquidation

If the margin ratio falls below 80%, LBank will issue a margin call, requiring you to add more margin to the position.
Failure to fulfill a margin call within a given timeframe (usually 30 minutes) will result in forced liquidation, which will close the position and sell the assets to recover the margin.

Step 7: Fees and Funding Rates

LBank charges a fixed trading fee of 0.1% for each leveraged trade, regardless of the outcome.
Funding rates are applied every 8 hours to reflect the cost of holding a leveraged position. The rates can be positive (payout) or negative (cost).

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