Crypto Leverage Explained
Cryptocurrency trading allows users to make a fortune from digital assets only in the case they know how to trade crypto and how this market works. Before you get into trading, it is crucial to understand:
- the essence of crypto charts and indicators;
- the factors that impact crypto rates;
- fundamental changes in the world and their effect on the crypto industry;
- the importance of the news background.Crypto trading
Crypto trading implies using different profitable tools:
- spot market trading;
- margin and leverage;
In this article, we would like to talk about using leverage in trading. So what is leverage crypto, and what coins to use for this trading method?
What is Leveraging Crypto?
Using crypto leverage requires a more or less stable crypto asset with sufficient market capitalisation and growth prospects. It is advisable to pick middle-cap assets such as DASH crypto, for example. Large capitalisation provides asset resistance to market fluctuations, which means its price does not largely rise or drop. Middle-cap coins are more sensitive to market volatility, so they easier grow in value when the whole market rises.
Leverage implies entering the market with a small initial sum but borrowing funds to make it with the better position, and so, to receive additional zeros to your initial sum if the market grows. So we need a coin that will easily skyrocket when the market starts its bull trend. So DASH crypto suits the best for this trading method.
Actually, what is leveraging crypto? Here are the pain facts about using leverage:
- Leverage is provided by crypto trading platforms. It may be X5, X30, X100, etc., depending on the platform you use.
- The bigger leverage you take, the blogger risk you take in the case the market behaves not the way you expect.
- At the same time, leverage allows you to manage risks – pick small leverage, and your risk will be minimal.
Suppose you want to invest $100 in DASH crypto (that is called margin – the total value of the position you would like to open), but all you have is $100. So you need to take X10 leverage. Be careful using leverage and work only with reliable crypto exchanges, such as WhiteBIT, the largest crypto exchange with leverage in Europe (up to X20).