Trade Bitcoin Trading

Max Bitcoin Leverage vs Used Leverage - Key Differences

Note the difference between max bitcoin trading leverage from your broker and the leverage you actually use. Max is the highest the broker allows. Used leverage depends on your open lot sizes. The example above explains this point.

If your crypto broker has given you 100:1 Max cryptocurrency leverage, but you only open trades of $100,000, then the bitcoin trading leverage used is:

100,000 compared to 10,000 (your capital).

10:1 Used Bitcoin Trading Leverage

You're using 10:1 cryptocurrency leverage, but your highest cryptocurrency leverage is still 100:1. This means that even if your highest btcusd leverage is 100:1 or your max leverage is 200:1, you don't have to use all of it. It's best to keep your btcusd leverage at 10:1, but you should still pick a 100:1 maximum leverage for your bitcoin trading account. The extra leverage gives you what is called Free BTCUSD Margin. As long as you have Free margin in your trading account, your crypto broker won't close your trades because the margin will stay above what is needed.

When it comes to trading bitcoin trading one of your bitcoin trading rules: bitcoin equity management rules on your btcusd trade plan should be to use leverage ratio below 5:1.

Bitcoin Leverage Example

In the example demonstrated below, a leverage of 100:1 is set, with a margin of 1% amounting to $2683.07. Consequently, the total amount the trader controls is $268,307. This reflects that the trader has utilized a small portion of their own funds and borrowed the remaining amount. With the leverage set at 100:1, the trader is operating with 1% of their trading capital, which corresponds to $2683.07: thus, if 1% equals $2683.07, then 100% totals $268,307.

Maximum vs. Used Bitcoin Leverage – What's the Real Difference?

What distinguishes Maximum Crypto Leverage from Used Crypto Leverage?

In the illustrated example, the trader uses $2,683.07, controlling a total of $268,307 but maintaining trading equity of $16,116.55: thus, the leverage applied on BTCUSD is calculated as ($268,307 divided by $16,116.55), yielding a ratio of 16.64:1.

16.64 : 1

In the bitcoin account above even though the maximum bitcoin trading leverage set bitcoin trade leverage is 100:1, Used bitcoin leverage is 16.64 : 1

More Online Courses and Help:

Bitcoin Broker