Trade Bitcoin Trading

Bitcoin Leverage & Margin Explanation & Example

Margin required : It is the sum of money your crypto broker requires from you to open a trade. It's denoted in percents.

Equity : It's the total sum of capital you've got in your account.

Used margin : the money from your account that is being used when you purchase a bitcoin trading agreement: this agreement can be seen in current, open trades. As a trader, you cannot use this money after starting a trade, since you have already used it, so it is unavailable.

When your crypto broker opens a trade for you using borrowed money, you need to keep enough margin in your account as collateral. This margin lets you keep using the bitcoin leverage the broker gave you.

Free margin is cash in your account for new trades. It is money not yet used in positions. This amount matters because it lets you keep open trades running, as explained below.

However, if you over use leverage, this free margin will drop below a certain percent at which your online broker will have and be forced to stop out all of your transactions automatically, leaving you with a big loss. Btcusd broker at this point will automatically close-out all your open trade transactions because if your open transactions are left open then your broker would lose money that you'd have borrowed from them.

That is why you should always make sure you have a lot of available margin, by never trading more than 5 percent of your trading account: two % is better.

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