What Is Leverage and How to Use It on Binance Futures?
Leverage is a tool in Binance Futures that allows you to trade positions larger than your capital. For example, 10x leverage means that with $100 capital, you can trade up to $1,000.
Also read: Differences Between Margin Trading and Leverage Trading: Which is Psychologically Safer?
How to Use Leverage:
1. Choose Leverage: When opening a position on Binance Futures, you can choose a leverage level ranging from 1x to 125x depending on the contract.
2. Risk: The higher the leverage, the greater the potential profit, but also the higher the risk of loss.
3. Use Stop-Loss: Stop-Loss is one way to minimize losses if the price suddenly drops rapidly. The Stop-Loss position should be seen from the technical analysis that you use for the right position.
Example:
With $50 capital and 20x leverage, you can trade a position worth $1000. If the asset price increases by 1%, your profit will be much greater than without leverage. However, if the price decreases by 1%, you can lose your capital much faster.
Tips:
Use leverage wisely. Beginners are advised to start with low leverage.
Pay Attention to Leverage Usage and Margin Levels:
Lev 5x : margin 20%
Lev 10x : margin 10%
Lev 15x : margin 6%
Lev 20x : margin 4%
Lev 25x : margin 3%
Lev 50x : margin 2%
Lev 75x : margin 2%
Lev 100 : margin 1%
Lev 125x : margin 1%
