Many people initially focus only on spot trading, and when they gain some experience, they begin to show interest in leverage trading to earn higher profits with market volatility.
As you learn more about coin futures trading and the platform called Binance, you can establish your investment strategy based on the experiences gained from the investment process.
The main appeal of leverage trading is that you can take large positions with less capital. However, this feature also increases risk, so it should be adopted with caution.
Those using Binance for the first time may not be familiar with futures trading and often do not set leverage correctly, which can lead to significant losses. With high leverage, even a slight fluctuation in price can lead to immediate liquidation of the position.
Therefore, it is essential to understand and use the leverage adjustment options provided by Binance properly. Binance also has an educational platform called 'Academy' where you can easily learn.
On Binance, you can set leverage from a minimum of 1x to a maximum of 150x. The maximum leverage varies for each coin, but major coins like Bitcoin and Ethereum allow up to 150x.
Initially, it may seem that higher leverage will yield more profit, but experience shows that high leverage does not always bring more gains. The higher the leverage, the greater the risk, so risk management is crucial.
It is generally considered better to use leverage between 5x and 10x. When the market is very volatile, one should avoid leverage above 10x. Within this range, you can earn good profits while taking reasonable risks. Conversely, when the market is extremely volatile, leverage of 5x or less is safer.
Changing leverage on the Binance futures page is very easy. Choose your preferred trading pair and click on the leverage button above. Then use the slider to set the desired leverage.
Generally, Binance's default leverage is 20x, but it is essential to adjust it according to your investment style. Keep in mind that leverage needs to be set differently for each trading pair.
The most important factor when using leverage is the liquidation price. The higher the leverage, the closer the liquidation price will be to your capital. For example, if you use 100x leverage, even a 1% drop in price can liquidate your position.
In contrast, leverage of 5x or 10x allows for a bit more wiggle room in price, reducing the risk of liquidation.
The recommended strategy is to keep leverage low when the market is volatile and increase leverage slightly when a stable uptrend is observed. This way, you can invest flexibly according to the market and maintain stability.
Additionally, the fees incurred in trading cannot be ignored. Every trade incurs fees on both buy and sell. To save on these fees, it is recommended to use the referral link provided by Binance with a 20% discount.
✨ Click here to get a 20% fee discount on Binance
And registered users can also receive a 20% fee discount upon fulfilling the 5 conditions mentioned below:
The invited person must already have a Binance account.
The invited person should not have accepted an invitation before.
The invited person's account should not have traded or used any products on Binance in the past 180 days.
When the eligible person opens the link and logs in, a confirmation window should appear.
Binding becomes effective only when the inviter clicks on [Bind Now].
In this way, saving on fees as well as strategy is important. Check the liquidation price every time you set leverage and formulate a strategy accordingly.
In my experience, Binance's leverage adjustment feature is very useful. Through it, you can trade safely and profitably in different market conditions.
The conclusion is that using leverage correctly on Binance allows for stable and flexible investing. Beginners should start with 5x to 10x leverage and gradually progress with experience. Checking leverage and formulating a strategy before each trade is key to reducing risk and increasing confidence.