Trade Bitcoin Trading

Bitcoin Leverage Example and Margin Examples and Example

Margin required : This is the money your broker asks you for to start a trade. It is shown as a percentage.

Equity: This refers to the total amount of capital you possess in your account.

Used margin is the amount of money from your account that has already been used when you open a bitcoin trading contract, and this contract is displayed in your open trades. After opening a trade, you cannot use this money because you have already used it and it is no longer available to you.

In other words, because your online broker has opened up a position for you using capital you have borrowed, you must keep this usable margin for your account as a collateral to allow you the trader to continue using this bitcoin Leverage Example he has given you.

Free margin means the cash in your account available for new BTC/USD positions. It's the money not yet tied up in trades or used for leverage. As a BTC/USD trader, this amount matters a lot. It lets you hold open positions, as explained next.

However, if you over use bitcoin Trade Leverage Example, this free margin will drop below a certain % at which your online broker will be forced to close all of your trade positions mechanically, leaving you with a big loss. The btcusd broker at this point automatically closes all your open position position because if your trade transactions are left open broker would lose the money you'll have borrowed from them.

This is why you should always ensure you've got a lot of free margin. In order to do this never trade more than 5 % of your account, in fact two % is advised.

Difference Between Bitcoin Leverage Example Set by the Broker and Used Bitcoin Leverage Examples

Should the pre-set Bitcoin Trade Leverage Example be set at 5:1, this signifies the eligibility to borrow up to five dollars for every single dollar owned. However, the trader is not mandated to fully utilize the maximum 5:1 borrowing capacity: they retain the discretion to opt for leverage such as 2:1 or 3:1. In such an instance, even with the 5:1 option available, the actual applied Bitcoin Trade Leverage Example for the transaction will correspond to the 2:1 or 3:1 ratio that was actually borrowed.

Example:

You have $1000 (Equity)

Set 5:1

Bitcoin Leverage Example Used = Amount used /Equity

If you buy trades equal to 2,000 dollars you'll have used

= 2,000/1000

= 2:1

If you buy trades equal to 3,000 dollars you'll have used

= 3,000/1000

= 3:1

Study More Courses:

Bitcoin Broker