This article shares the basics of leverage trading. With this our aim is to provide a brief & crisp explanation of what exactly trading with leverage entails to in cryptocurrencies.

Related Post: Fundamentals Of Leverage Trading In Crypto Currencies

However before we dive deep into the trading part, lets first understand the term leverage & it's meaning!

What Is Leverage?

Leverage is a strategy that uses the borrowed capital for investments with the profits made to be greater than the interest payable. It is also indicative of the amount of debt any firm utilizes as a way to finance their assets.

Say if a company, property, or investment is “highly leveraged,” it means that the item possesses more debt than the equity.

Overall, leverage is the application of debt in order to start an investment or any project. The outcome is to multiply the potential returns from a project. Simultaneously, it will also multiply the potential risk should the investment not successfully pan out.

What Is Leverage Trading?

As a trader, it is crucial that you understand both the benefits AND the pitfalls of trading with leverage.

Using a ratio of 100:1 as an example, means that it is possible to enter into a trade for up to $100 for every $1 in your account. 

With as little as $1,000 of margin available in your account, you can trade up to $100,000 at 100:1 leverage. This gives you the potential to earn profits on the equivalent of a $100,000 trade! 

It’s like a super scrawny dude who has a super long forearm entering an arm wrestling match.

If he knows what he’s doing, it doesn’t matter if his opponent is Arnold Schwarzenegger, due to the leverage that his forearm can generate, he’ll usually come out on top.

Advantage & Disadvantage Of Leverage:

When leverage works, it magnifies your gains substantially. Your head gets big and you think you’re the greatest trader that has ever lived.

However, if it works against you and your trade moves in the opposite direction, leverage will AMPLIFY your potential losses.

And You’ll be broke faster than the Mike Tyson can chew your ear off.


Learn & practice a lot before diving deep into the leverage trading. There are multiple trading platforms to leverage your skills like Binance, Okex & Bitfinex. However,

BitMEX: Is the first & best option (due to it's incredibly high liquidity) that comes to our mind when we think of leverage trading.  

Indeed, It encourage new users who are unfamiliar with trading to practice placing, executing and cancelling orders of various order types and any size without investing a single penny on their sandbox testing exchange,

PrimeXBT: It is the second option that provides traders with assembled liquidity in order to deliver the best price from 12 different leading liquidity providers. 

This delivery is able to be done in real-time and with instantaneous order execution. It accepts BTC, USD, EUR, as well as a wide variety of cryptos that Changelly supports.

On top of that, there are no deposit fees. Additional features include advanced order types (ex. stop-loss), their lowest fee is only 0.05%, and no KYC requirements.

It offers a robust trading system for both beginners and professional traders that demand highly reliable market data and performance.

Entire infrastructure is designed to facilitate high number of orders per second and extreme loads, while offering ultra-fast order execution and low latency.

That would be all! I hope you must have got the whole idea of how exactly leverage trading works although if you have something to ask please drop a comment below or connect with us on twitter

We'd be more than happy to answer! Thank you for reading!