How to magnify gains on margin trading if you think the price will go up?
1. Take BCH/USDT for example, suppose the maximum leverage is 5X, and you think the price of BCH will go up from 200 USDT to 400 USDT.
2. If you have 2,000 USDT, you can borrow 8,000 USDT using 5X leverage, and buy 50 BCH at 200 USDT each. When BCH price goes up to 400 USDT, you can sell 50 BCH to get 20,000 USDT for repayment.
3. The profit is: 50 BCH * (400 - 200) = 10,000 USDT.
4. If you invest the 2,000 USDT on spot trading, you will only make a profit of 2,000 USDT. But with 5X leverage, your profit is magnified 5 times.
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 100 USDT, and you use 5X leverage to buy long in the BCH/USDT market, 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 [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.
5. 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.
6. When BCH price goes up to 200 USDT, sell 5 BCH in the BCH/USDT Margin trading market to get 1,000 USDT for repayment.
7. Click [Borrow] and switch to the [Repay] tab in the pop-up window, select [USDT] 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.