How to do margin trading on CoinDCX?
Margin trading with cryptocurrency allows users to borrow money against their current funds to trade cryptocurrency “on margin” on an exchange. In other words, users can leverage their existing cryptocurrency by borrowing funds to increase their buying power. In short: leverage trading can enhance your buying or selling power, allowing you to trade larger amounts.
But before experimenting with leverage, it’s crucial to understand what it is and how it works, for this you can watch my YouTube video or Twitter thread.
What is DCX margin?
In the crypto market, margin trading refers to the process whereby individual investors buy more crypto than they can afford to. We will not make this blog as What is Leverage?, for this you can watch the video.
CoinDCX allows you to trade with upto 10X leverage across 250+ market.
Steps to do margin trading on CoinDCX:
Step 1: Login on CoinDCX
Step 2: Choose a trading pair you wish to trade
Step 3: Long/Short the pair
Type and search the trading pair for this you want to open position whether long or short.
What is a long position?
In this position, funds are bought by the trader and then sold at the Target Price. Traders open a long position in the hope that the price will go up in the future.
Steps:
1. Go to the Trading page > Select Margin > Select the desired pair.
2. Set up a Margin Buy order (specify the quantity, leverage, price).
3. (optional) If you select a BO (Bracket Order) fill in other details like Target Price and SL (Stop Loss Price).
4. Place your order by clicking on Long.
When you want to close the position, hover over your trade, you’ll see the option to Exit position, edit or cancel. On selecting exit, your exit will be confirmed at the current market price. Alternately, when your Stop Loss price hits, your position will be closed. The borrowed funds will be repaid and the profit/ loss will be adjusted and settled in your account.
What is SHORT position?
In this position, funds (that the trader doesn’t own) are sold first and then bought at a later time. So when you open a short position, the exchange sells the crypto on your behalf and you owe the quantity of crypto involved in the trade, to the exchange. At a later point, you return this obligation by buying the coin at a lower price. Traders open a short position in the hope that the price will go down in the future.
Steps:
1. Go to the Trading page > Select Margin > Select the desired pair.
2. Set up a Margin Buy order (specify the quantity, leverage, price).
3. (optional) If you select a BO (Bracket Order) fill in other details like Target Price and SL (Stop Loss Price).
4. Place your order by clicking on Short.
So now you know what DCX margin is and how you can do long and short on CoinDCX. But remember trading with high leverage might require less capital to start with, but it increases the chances of liquidation. If your leverage is too high, even a 1% price movement could lead to huge losses. The higher the leverage, the smaller your volatility tolerance will be. So do proper analysis before doing margin trading.
