What is Margin Trading?
Margin trading refers to using a small amount of capital as collateral and borrowing more funds to pay for a trade, which may amplify your gains or losses. As the crypto market often swings drastically, please fully understand the risks involved before engaging in Margin Trading.
What are the risks in Margin Trading?
Margin Trading not only allows you to magnify gains with fewer funds but can also saddle you with amplified losses when the market moves against you. Therefore, we strongly advise entry-level users not to use high leverage to avoid forced liquidation or bankruptcy.
What can I do to lower the forced liquidation risk?
1. Use margin appropriately and adjust your position size.
2. Take profit or stop loss in time.
3. Increase margin on your positions in time and make sure the ratio between Total Assets against Leverage is above 110%.
Description of Margin Trading Page
1. Search bar and trading markets
2. Trading pair and basic market information
3. Candlestick chart and market depth chart
4. Position PNL, order settings, and fee rates
5. Market selection area
6. Order placing area
7. Proportion of buying & selling
8. Order book
9. Latest execution
10. Current orders
How to use margin to magnify gains if you think the price will go up? (e.g. use 100 USDT and 5X leverage to buy long in BCH/USDT market)
Step 1: Visit the BCH/USDT Margin trading market.
1. Visit CoinEx official website (https://www.coinex.com), log in to your account, and select [Exchange] in the top-left corner.
2. Search and select the BCH/USDT trading pair, then switch to [Margin Trading] in the market selection area.
Step 2: Transfer assets to the Margin account.
Set the transfer direction from [Spot] to [Margin], confirm the coin type and enter the amount, then click [Confirm].
Step 3: Borrow USDT.
Click [Borrow], select [USDT], enter the loan [Amount], and turn on the [Auto Renewal] toggle (enabled by default), then click [Confirm] to complete the loan.
Note: When you use 100 USDT as collateral and borrow 400 USDT, your principal is magnified 5 times, which means 5X leverage.
Step 4: Buy BCH at a lower price. (Take a limit order as an example)
Use 500 USDT to buy 5 BCH at a price of 100 USDT in the BCH/USDT Margin trading market to initiate a long trade.
Step 5: Sell BCH at a higher price. (Take a limit order as an example)
If the price of BCH rises to 200 USDT, sell 5 BCH in the BCH/USDT Margin trading market to get 1000 USDT for repayment.
Step 6: Repay the borrowed coins and interest.
Click [Repayment], select [USDT] and enter [Amount], then click [Confirm] to complete the repayment.
Step 7: Transfer margin assets to Spot account.
Set the transfer direction from [Margin] to [Spot], confirm the coin type and enter the amount, then click [Confirm].