How to use leverage for cryptocurrencies and what it is like
Cryptocurrencies are currently the most volatile exchange asset on the forex market.
Due to the high speed of trend movement during the day, cryptocurrency rates can change by tens of percent and bring good profits to the trader.
But even such dynamics of exchange rate movement may not be enough for the set goals, then you should use leverage for cryptocurrencies.
That is, increase the volume of a future transaction using borrowed funds provided by the brokerage company, and therefore increase the amount of potential earnings.
Since trading in virtual currencies already has enormous volatility, the leverage in this market segment is accordingly not so large:
• RoboForex – 1:50 that is, you can open a deal up to 50 times your deposit.
• Alpari – 1:10 on ECN accounts 1:10
• AMarkets – 1:5 11 cryptocurrency pairs available for trading
• ForexClub – 1:5 more than 45 cryptocurrency pairs
As a result, we can say that depending on the brokerage company you choose, you can get leverage for cryptocurrencies in the amount of 1:5 to 1:50, this is quite enough for trading strategies such as pipsing and scalping.
Features of using the shoulder
First of all, it should be noted that margin trading of cryptocurrencies should only take place under the constant control of the trader, since within just a couple of hours the price of a crypto currency pair can change by ten percent, and taking into account leverage, by a hundred.
That is, using a leverage of 1:10 for cryptocurrencies, you will lose your entire deposit if the price changes against your position by only 10%.
Therefore, for each open transaction, a stop loss must be set ( stop loss for Bitcoin ) and it itself is under constant control by the trader.
At the same time, you should plan only short-term transactions because even if you guessed the direction of price movement, corrective trend movements can result.