Many initially focus only on spot trading, and when they become a bit more experienced, their curiosity grows to try trading with leverage to achieve greater returns in line with market volatility.
By learning more about crypto futures and the Binance platform, one can, based on experiences from the investment process, establish their own investment strategies.
The fundamental appeal of leverage is that you can take large positions even with little capital. But this feature also increases the risk, and therefore one should approach this with caution.
Those using Binance for the first time are often unfamiliar with futures trading and end up setting the wrong leverage level, which can lead to significant losses. The higher the leverage, the smaller price changes are needed before the position is liquidated.
Therefore, it is recommended to learn how to use the leverage adjustment option that Binance offers. Binance also has its own learning program called Academy, where one can easily study further.
On Binance, you can set the leverage from a minimum of 1x to a maximum of 150x. Each coin has different maximum limits, but the largest, such as Bitcoin and Ethereum, can go up to 150x.
At first, it may seem like high leverage always leads to higher profits, but with experience, one learns that high leverage does not necessarily mean higher returns. The higher the leverage, the higher the risk, and therefore risk management is crucial.
A common approach is to use between 5x and 10x leverage. When the market is very volatile, one should avoid going over 10x. Within this range, you can take a reasonable risk and still achieve good results in a predictable market. In very turbulent markets, it is safer to reduce to below 5x.
Changing leverage on Binance is very simple. Select the desired trading pair on the futures page, click on the leverage button at the top of the page, and use the slider to set the desired level.
By default, the leverage is often set to 20x, but it is important to adjust this according to your own investment style. Also, remember that the set leverage only applies to the specific trading pair.
For example: even if you set 10x on BTC/USDT, ETH/USDT will still be at the default 20x.
Therefore, it is necessary to make it a habit to check and adjust the leverage for each trade.
The most important thing to remember when using leverage is the liquidation price. The higher the leverage, the closer the liquidation price will be to your equity. For example, with 100x leverage, a price drop of just 1% can lead to the position being liquidated.
With 5x or 10x, there is more room for price movements, which reduces the risk of immediate liquidation.
A recommended strategy is to reduce the leverage when the market is volatile and increase it moderately when the market shows stable growth. This way, you can adapt to the market flexibly while maintaining safety.
It is also very important to calculate the liquidation price. With high leverage, the liquidation price comes very close to your equity, and without having full oversight, the position can easily be liquidated.
One must not overlook the fees when trading. You pay both when you buy and when you sell, which means twice per trade. To reduce these costs, it is recommended to use Binance's referral link, which gives a 20% discount on fees.
✨ Click here to get a 20% discount on Binance fees
Existing users can also get a 20% discount if they meet the following 5 conditions.
The invited person already has a registered Binance account.
The invited person has never accepted an invitation before.
The invited person's account has not traded or used products on Binance in the last 180 days.
When the qualified guest opens the link and logs in, a confirmation window will appear.
When the inviter clicks on [Bind Now], the link takes effect.
Even with the fee discount, the strategy is extremely important. It is crucial to always check the liquidation price every time you set the leverage and create a strategy accordingly.
In my experience, the leverage adjustment feature on Binance is very useful. It allows you to adapt to different market conditions and trade both more steadily and more profitably.
Of course, in very volatile markets, the risk increases, and one must proceed with caution and always have a strategy to minimize risk.
The conclusion is that proper use of leverage on Binance can provide more stable and flexible investments. I recommend avoiding extremely high leverage and instead adjusting according to the market situation with a focus on risk management.
For beginners, it is best to start with 5x to 10x, gradually gain experience, and always check the leverage before each trade. This way, one can reduce unnecessary risk and gradually build confidence in the investments.