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).