The four most famous international exchanges:

Binance INTL	OKX INTL	Gate.io INTL	Huobi INTL
China Line　APP DL	China Line　APP DL	China Line　APP DL	China Line　APP DL

Note: The above exchange logo is the official website registration link, and the text is the APP download link.

Nowadays, Bitcoin can be said to be the most popular digital currency and has been enthusiastically welcomed by investors. However, newbies in the currency circle do not know what are the Bitcoin transaction methods? At present, Bitcoin trading methods include spot trading and futures trading. Spot trading is a trading method in which one hand pays the money and the other hand delivers the goods. Futures trading can also become a contract transaction. Today we mainly talk about this Bitcoin trading method. In futures trading , investors will encounter leveraged trading, that is, when trading digital currencies, they can choose high leverage for trading. After understanding leveraged trading, let’s return to the topic of this article, how is Bitcoin’s leveraged interest calculated? Below, the editor of the currency circle will tell you about the calculation method of Bitcoin leverage interest.

## How is Bitcoin leverage interest calculated?

Interest is calculated independently for a single borrowing order. Interest is calculated for the first time when the currency is successfully borrowed, and interest is calculated every 24 hours thereafter. When the borrowing order remains unpaid for 15 days, the system will conduct compound interest settlement on the unpaid portion (the unpaid principal + unpaid interest will be included in the principal of the next stage), and the next stage of interest calculation will begin.

## How to scientifically set the Bitcoin trading leverage multiple?

In fact, given how volatile the crypto market is, in most cases traders don’t actually have to use leverage. Of course, when using leverage, be sure to set a stop loss. So, how do you choose the leverage multiple for each transaction? Here are a few examples to illustrate.

Example 1: Assume the stop loss is $9,400 and the risk you are willing to take is 2% of the account. If we were at 10000
If you go long on the US dollar, then the drop from the opening price to the stop loss price is (10000-9400)/10000 = 6%. The calculated position size is 2/6=33%, so there is no need to add leverage.

Example 2: Assume the stop loss is $6,200 and the risk you are willing to take is 20% of the account. If we were at 10000
If you go long on the US dollar, then the drop from the opening price to the stop loss price is (10000-6200)/10000 = 38%. The calculated position size is 20/38=53%, and there is no need to add leverage.

Example 3: Assume that the stop loss point is $10,700 and the risk you are willing to take is 4%. If we were at 10950
If you go long on the US dollar, then the drop from the opening price to the stop loss price is (10950-10700)/10950 = 2.3%. The calculated position size is 4/2.3=174%. At this time, 1.74 can be set
times the leverage multiple.

In addition, there is another way to calculate using the ATR (average true fluctuation, which is the moving average of the price fluctuations within a certain time period) indicator. Check the 4-hour ATR (200) indicator, multiply by 3, and assume that we get
$600. Convert the value to a percentage. If the current price is $10,000, then 600/10,000 = 6%. Assuming the maximum account risk is 3%, the maximum position size is
50%, no leverage required.

Alex believes that the leverage multiple should be determined by two factors: the setting of the stop loss point and the investor's risk tolerance and confidence. In itself, leverage is not a strategy, but a tool to help investors formulate strategies.

When using high leverage, investors need to set a stop loss close to the opening price. But in many cases, leverage is just trading noise. I believe that high leverage should be used during breakouts and in some extremely oversold situations.

In addition, many users have certain misunderstandings about the isolated margin model. In the isolated position mode, the leverage multiple only represents the multiple of this position, not the actual multiple. In fact, this is just a lazy way to set a stop loss. After all, your biggest loss is only the margin in this position.

Through the above introduction, I believe everyone has some understanding of the issue of how to calculate Bitcoin leverage interest. Bitcoin leverage trading actually plays a role in amplifying returns, but it also amplifies risks, especially since the actual operation is subject to some uncertain factors. The impact will further increase the risk. Therefore, the editor of the currency circle recommends that investors, if they have no experience, just have a little understanding, operate with caution, and do not try rashly.