How to earn profits on margin trading if you think the price will go down?
1. Take BCH/USDT for example, suppose the maximum leverage is 5X, and you think the price of BCH will go down from 400 USDT to 250 USDT.
2. If you have 1 BCH, you can borrow 4 BCH using 5X leverage, and sell 5 BCH at 400 USDT each. When BCH price goes down to 250 USDT, you can use 2,000 USDT to buy 8 BCH for repayment.
3. The profit is: 2,000 USDT- 4*250 USDT- 400 USDT = 600 USDT.
4. If you use your principal to make spot trading, you can only buy low and sell high.
Note: To simplify the calculation, the above example ignores the borrowing interests and the results are for reference only.
Introduction to 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
11. Order history
Suppose you have 1 BCH, and you place a limit order to sell short with 5X leverage, the steps are as follows:
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.
3. Click the transfer button, set the transfer direction from [Spot] to [Margin], confirm the coin type and enter the amount, then click [Confirm].
4. Click [Borrow], select [BCH], 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 1 BCH as collateral and borrow 4 BCH, your principal is magnified 5 times, which means 5X leverage.
5. Sell 5 BCH at a price of 400 USDT in the BCH/USDT Margin trading market to initiate a short trade.
6. When BCH price goes down to 250 USDT, buy 8 BCH in the BCH/USDT Margin trading market for repayment.
7. Click [Repay] and switch to the [Repay] tab in the pop-up window, select [BCH] and enter [Amount], then click [Confirm] to complete the repayment.
8. Click the transfer button, set the transfer direction from [Margin] to [Spot], confirm the coin type and enter the amount, then click [Confirm].
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 highly leveraged trading to avoid forced liquidation or even bankruptcy.