Bitcoin Leverage Trading Explained - What Is The Best Platform?
Bitcoin leverage trading is exactly like trading Bitcoin on a typical exchange but your profit and losses are multiplied by the amount of your leverage.
In simple terms, this means that if you use 10x leverage and price goes up 1%, your profit is 10%. If the price goes up 10%, your profit is 100%.
But if the price of Bitcoin goes down by just -10%, your position will get liquidated and you lose all of your capital tied to that position.
Leverage is like a loaded gun
In the right hands, leverage is very effective and useful. But if you point it in the wrong direction, it can have a disastrous outcome.
If you have never used a gun before, you should not grab a grenade launcher. I know 100x leverage is tempting because it can make you a lot of money, but it only requires a less than -1% move for you to lose everything.
Trading successfully over a long period of time requires a good strategy, willingness to learn and a ton of patience. You will have successes and you will make mistakes.
This is why it’s best to start with a demo account or 1x leverage and a simple strategy. Once you get the hang of it, you can go 2x, 5x or even 10x.
How does leverage trading work?
When you invest 1 Bitcoin the exchange gives you a “loan” of 9 Bitcoin (with 10x leverage). This allows you to trade like you had 10 Bitcoin even though you only had 1.
But when you use 10x leverage, the fees are 10x also. So make sure you use leverage when you are certain your rewards vastly outweigh the costs and the risk.
To enable leverage trading the exchange has to hold enough reserves to provide you with funding. The exchange makes money by collecting fees from loaning funds to the traders.
That’s all good, but what you must be thinking is …
How can I make big money and retire early?
There is no magic formula that you can use to quickly beat the market and other traders. But here are 7 steps to make it big in Bitcoin trading.
- Open an account on a leveraged crypto exchange (Bybit or Binance etc.)
- Find a simple trading strategy
- Trade with bonus money or demo account
- Once you make money consistently (even low amounts), add more funds to the exchange
- Add more leverage and build your wealth over time
- DO NOT GET LIQUIDATED
- Retire after 5 years
What is the best platform with the lowest fees?
We recommend using Bybit. They have excellent customer service, their UI is really responsive, they have low fees and new users can claim $90 bonus ($10 can be used as money for trading and $80 for fees).
Other good leverage exchanges:
- Deribit (similar to Bybit, good support)
- BitMEX (one of the oldest and biggest leverage exchange, UI outdated)
- Kraken (older and reliable, slightly lower fees)
- Binance Futures (fast UI, no market making commission)
Where can I find a simple trading strategy that makes money consistently?
There is no strategy that is 100% safe and works every single time flawlessly. Most successful strategies make money 60%, 70% or 80% of the time (when you execute it correctly). So be prepared to lose. Especially when starting out.
We are in the works of releasing a trading strategy that requires only 2 indicators and can be used by beginners and advanced traders with small leverage.
The strategy is not out yet but it will be available in 1 to 2 months on collectiveholdings.io.
Meanwhile, Follow us on Medium and Twitter @CollectiveHold1 and join our trading group on Telegram to keep up-to-date.
