How to play leverage on AscendEX

To play leverage on AscendEX, create an account, fund it, choose a trading pair, set leverage, determine position size, place an order, and manage risk through stop-loss orders, margin level monitoring, and understanding of liquidation risk.

Nov 24, 2024 at 08:46 pm

How to Play Leverage on AscendEX

Leverage trading involves borrowing funds from a platform to increase your trading power. This can potentially amplify your profits, but it also comes with increased risk. AscendEX, a reputable cryptocurrency exchange, offers leverage trading options for a range of crypto assets. This guide will provide a comprehensive overview of how to play leverage on AscendEX, addressing common questions and providing step-by-step instructions.

Understanding Leverage Trading

1. Concept of Leverage: Leverage is a ratio that represents the amount of borrowed funds in relation to your own capital. For instance, a 10x leverage implies that you are borrowing 10 times your initial investment.
2. Margin: Margin refers to the amount of funds you deposit as collateral to borrow additional funds. When trading with leverage, your margin serves as a cushion against potential losses.
3. Liquidation: If the market moves against your position and the value of your collateral falls below a certain threshold, your position will be liquidated. This means the exchange will automatically close your position and sell your assets to cover the loan.

Steps to Play Leverage on AscendEX

1. Create an Account: Register on AscendEX and complete the necessary KYC procedures.
2. Fund Your Account: Deposit crypto assets or fiat currency into your AscendEX account.
3. Choose a Trading Pair: Select the crypto pair you wish to trade with leverage.
4. Set Leverage: AscendEX offers flexible leverage options, typically ranging from 1x to 10x. Choose the leverage that aligns with your risk appetite and trading strategy.
5. Determine Position Size: Calculate the size of your position based on the amount of leverage you are using and the amount you are willing to risk.
6. Place Order: Specify your order type, enter the order size, and confirm the order execution.

Managing Risk in Leverage Trading

1. Use Stop-Loss Orders: Implement stop-loss orders to automatically exit the trade if the market moves against you beyond a certain threshold, limiting potential losses.
2. Monitor Margin Level: Regularly check your margin level to ensure it remains above the maintenance margin requirement. If your margin level falls below the threshold, you may receive a margin call, requiring you to deposit additional funds.
3. Understand Liquidation Risk: Be aware of the liquidation price at which your position will be automatically closed. Monitor the market closely and manage your risk accordingly.

Conclusion

Leverage trading on AscendEX can be a powerful tool for experienced traders, allowing them to amplify potential profits. However, it is crucial to understand the risks involved and implement prudent risk management strategies. By following the steps outlined in this guide, you can navigate leverage trading on AscendEX effectively and minimize potential losses.