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As we all know, investment in digital currency is a kind of risky investment, and its investment risk is still very high. The risk of Bitcoin trading itself is relatively high, and the Bitcoin leverage contract magnifies the risk of Bitcoin several times, and its risk The risk is even higher, which is why many people are reluctant to try leveraged trading. In fact, leverage trading is to use a small amount of funds to invest several times the original amount, thereby obtaining multiple returns or losses relative to the fluctuations in the investment target. Even though the risk is high, because of the temptation of high returns, many investors still want to know how to use Bitcoin leverage? Let the editor of Bitcoin Circle introduce to you the rules of Bitcoin leverage play.

## How to play Bitcoin leverage?

Take BTC/USDT leverage trading as an example (USDT is benchmarked against the U.S. dollar, 1 USDT = 1 U.S. dollar). Assume that the current price of Bitcoin is 10,000 USDT. If you judge that the price of Bitcoin will rise in the near future, you can choose to go long in leverage trading.

You only have a principal of 10,000 USDT
If the platform is 3 times leverage, you can borrow another 20,000 USDT from the trading platform, so that the principal will be 30,000 USDT. If it is 5 times leverage, you can borrow 40,000 USDT, and if it is 10 times leverage, you can borrow 90,000 USDT. USDT...and so on.

Use 30,000 USDT to buy 3 Bitcoins, and sell them when the Bitcoins rise to 20,000 USDT. You will get 60,000 USDT, deduct 10,000 principal and 20,000 borrowings, and make a profit of 30,000 USDT.

If you don't use leverage trading and go directly to spot trading (currency trading) to buy 1 Bitcoin for 10,000 USDT, you can only make a profit of 10,000 USDT.

Of course, if the judgment is wrong and Bitcoin drops to 5,000 USDT, the currency trading will only lose 5,000 USDT, while the margin trading will lose 15,000 USDT.

In addition to being able to go long like currency trading, leverage trading can also make money through short selling.

Or use BTC/USDT
Take 3x leverage trading as an example. The current price of Bitcoin is 20,000 USDT. You judge that the price of Bitcoin will drop to 10,000 USDT. If you have a principal of 10,000 USDT in your hand, you can borrow 1 Bitcoin from the platform (for short positions, you can only borrow and choose to go short). currency) sell when Bitcoin reaches 20,000 USDT, and then buy when Bitcoin reaches 10,000 USDT, so that you can make a profit of 10,000 USDT

## Notes on Bitcoin Leverage

Light position trading: If you want to reduce risks, you must light position trading. If you trade with a heavy position, the market fluctuation may be slightly larger and the position may be liquidated. If you have a small position, even if you cannot make up for it immediately, you can still control the loss within an acceptable range.

Strict stop loss: Every order must be set with a stop loss, which means that when your current transaction loss reaches the set stop loss point, it will automatically close the position and stop trading, instead of continuing to lose money.

Short-term and ultra-short-term trading: A long order time means increased risks, because in the cryptocurrency market, we never know what will happen in the next second. For example, closing orders within 30 minutes and doing short-term and ultra-short-term transactions can reduce risks.

Do not open orders when non-agricultural and predictable major news comes. When the market fluctuates significantly, huge profits or losses may occur. This is a taboo thing. Don't take risks. Steady profits are the way to go.

Enter the market at the right time: Most investors believe that the current cryptocurrency market is unstable. At present, investing in the currency circle means that there will also be certain risks. However, the risks of leveraged trading are higher than ordinary cryptocurrency investments. Therefore, when conducting leveraged trading, choose short-term investment as much as possible to avoid staying in the trading market for a long time. The longer it takes, the higher the cost will be.

Look for high price volatility: Be careful to keep an eye on the market for price volatility. When market prices fluctuate more, prices will rebound and rise rapidly. By analyzing and evaluating K-line trends, we can predict the turning point of market price fluctuations, pick the right time, and conduct leveraged transactions. At the same time, when entering the market, ensure that you have enough data and analysis to support your decision-making.

Ensure normal cash flow: At all times, you must set aside living expenses, have spare money on hand, and be able to guarantee daily expenses, so that you can hold currency with peace of mind and welcome the bull market with peace of mind. In reality, there are many people who fall before dawn because of various problems and need to cash out. I hope you will not become such martyrs.

The above content is the currency circle editor’s introduction to the rules of Bitcoin leverage play. If you really want to engage in Bitcoin leverage trading, you must carefully analyze and evaluate the current market trends before starting leverage trading. This is also to better cope with the next situation in the market. After all, the currency circle always Things are changing, and no one knows where the market will go next. In addition, we also need to establish a set of risk control strategies of our own. The most important thing is that after establishment, we must strictly abide by it. When facing various market conditions, we must calmly judge and analyze , make decisions after analysis.