As we introduced in the previous articles, margin trading refers to the practice of magnifying your actual funds with potentially amplified gains. Throw a sprat to catch a herring! You can rake in huge profits with a small number of funds through margin trading.
How to do margin trading on CoinEx?
So how to do margin trading on CoinEx and earn the first pot of gold with only a small amount of crypto?
I. Open a CoinEx margin trading account and check trading pairs supported
1. Visit www.coinex.com, and after successfully logging in, enter [Exchange] in the navigation bar on the top, and then click [Margin Trading];
2. Read [Terms of Crypto Loan and Margin Trading Services] carefully, tick [I have read and agree to accept these risks and liability], and click [Confirm] to open a margin trading account.
3. Tick [Margin] in the upper left corner to check the trading pairs supported.
II. How to long buy on margin trading
Take BTC/USDT trading pair for example. The BTC/USDT market supports up to 10X margin. When you expect the price of BTC to rise, you need to borrow USDT from the platform and buy BTC at a lower price with all the USDT you have and the USDT borrowed. When the price rises to the expected level, you can sell BTC at a higher price, and return the borrowed coins and interests to make profits.
Suppose you have 50,000 USDT and you can borrow 450,000 USDT. Now you have a total of 500,000 USDT, with 10X margin. Let’s do it step by step:
1. Transfer assets to a margin account
Click [Transfer] on the margin trading page, select [From Spot Account to Margin Account], choose [USDT] coin type, set the transfer [Amount] and click [Submit] to complete the transfer;
2. Borrow USDT with leverage
Click [Borrow] on the margin trading page, select [USDT (Long Buy)] in the pop-up window, check [Automatic renewal] (enabled by default), enter the loan [Amount] and click [Confirm] to complete the loan;
3. Buy BTC at a lower price (Take a limit order as an example here)
Use 500,000 USDT to buy 10 BTC at a price of 50,000 USDT in the BTC/USDT margin trading market to buy (long) BTC.
4. Sell BTC when it rises to the expected level (Take a limit order as an example here)
If the price of BTC rises to 60,000 USDT, sell 10 BTC in the BTC/USDT margin trading market to get 600,000 USDT;
5. Return the borrowed coins and interests
Click [Repay] on the margin trading page, select [USDT] in the pop-up window, enter [Paid amount] and click [Confirm] to complete the repayment;
6. Transfer margin assets to a spot account
Click [Transfer] on the margin trading page, select [From Margin Account to Spot Account], choose [USDT] coin type, set the transfer [Amount] and click [Submit] to complete the transfer;
In the above example, you make a profit of 100,000 USDT, compared with only 10,000 USDT if you invest all the 50,000 USDT you have in spot trading. The profit increases tenfold with 10X leverage.
You can make the first pot of gold in a short time with a small amount of principal if you make good use of margin trading. But huge losses would occur if you made a wrong judgment. To prevent forced liquidation, you should not hold heavy positions with high leverage. Leverage sounds good, yet remember to control your desire.
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