KuCoin Academy Lesson 12| Learn Margin Trading From Scratch: Enabling, Borrowing, Trading and Repaying
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In the first week, we said that the most convenient and easiest way to get crypto assets is to directly purchase them through an exchange. In addition to knowing how to buy cryptocurrency using fiat currency, you also need to know how to make transactions between cryptocurrencies if you want to become a senior crypto investor.
In KuCoin Academy lesson 12, we will Learn Margin Trading From Scratch: Enabling, Borrowing, Trading and Repaying
In the last lesson, we introduced what margin trading is. If you don’t know it yet, we suggest you start from the last lesson: A Bull Market Is Coming But Your Funds Are Limited. How To Amplify Your Profit?
Before starting margin trading on KuCoin, it is necessary to open the margin trading service and transfer crypto assets to the margin trading account to trade. Completing a set of margin trade processes is divided into six steps in total, namely: opening margin trade, transferring principal (margin) to a margin account, borrowing more assets from the margin trading markets, trading, closing positions, and repaying currency.
Contents：
*How to enable margin trading
*How to transfer the principal to a margin account
*How to borrow more tokens
*How to trade
*How to close your position
*How to repay
1. How to enable margin trading
1. Log into the KuCoin official website, click the “Trade” button in the menu bar, and click “Margin” to enter the margin trading area;
2. Click on the “Margin” and then the “Enable” button in the lower right corner to open margin trading.
2. How to transfer the principal to a margin account
As we mentioned in the last lesson, leverage is used to amplify your principal on the basis of your existing principal, that is, if you have 1 BTC, it can be increased to 10 by borrowing, but if you have no principal in your account, you cannot borrow any funds.
So before you borrow, you first have to transfer some of your assets to the margin account. So how do you do that?
1. Click the “Transfer” button;
2. Enter the quantity and token, and click confirm to transfer the tokens from the main account or trading account to the margin account; Drop down the box to choose main account or trading account; Select the token you want to transfer to the margin account from the drop-down box (only tokens supported in margin trading can be transferred); Enter the amount you want to transfer to the margin account
3. How to borrow more tokens
There are two ways to borrow tokens on KuCoin.
Method one: You can directly select a trading pair on the trading interface (the trading pair must include the tokens you want to borrow), click the “Borrow” button to quickly borrow the tokens, and the market will borrow the number of tokens at the optimal interest rate;
Method two: Users can also borrow tokens with the following process:
1. Click the “Earn” button, and then click “Lend”;
2. Click “Borrow” and choose the token you want to borrow. Enter the maximum daily interest rate: the daily interest rate can only be selected from the lending market and cannot be set at will; Enter the quantity: each token has a minimum borrowing quantity, and the maximum borrowing quantity is 9 times the margin (principal); Click the “Borrow XXX” button to borrow tokens
Notice: The interest is calculated for the first time after the borrowing is successful, and the interest is calculated every hour after that
4. How to trade
Select the trading pair you want to trade and exchange the borrowed token for another token;
For example, if you borrow USDT and think that BTC will rise, you would trade USDT for BTC. Choose the BTC/USDT trading pair and buy BTC with the borrowed USDT.
5. How to close your position
In margin trading, you can trade the tokens you borrowed again. For example, if you buy BTC with the borrowed USDT, you only need to sell the BTC to exchange it back to USDT, which will close the position.
6. How to repay
1. Select the trading pair in the trading interface (the trading pair must include the token you want to repay), and click the “Repay” button;
2. Choose the token you want to repay. Choosing Repay rules: time priority principle means you repay the borrowed tokens first; interest rate priority principle means you repay tokens with higher interest rates first.
Enter the quantity you want to repay. If you want to repay all tokens, click “all”, and then click the “Confirm” button to repay the token.
For more information about margin trading, you can visit the KuCoin margin trading tutorial video: https://youtu.be/qDmu1igYyGU
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