Binance is one of the largest and most famous cryptocurrency trading platforms in the world, providing advanced tools such as leverage that help traders increase their investment positions using less capital. However, using leverage requires a deep understanding and precision in risk management. In this article, we will explain how to use leverage on Binance step by step.
What is leverage on Binance?
Leverage on Binance is a tool that allows users to trade with larger amounts than those in their accounts. Leverage on Binance for futures can reach up to 125x for some pairs, meaning that every $1 can be used to trade $125.
Steps to use leverage on Binance
1. Open an account on Binance
Create an account on Binance and verify your identity (KYC) to ensure compliance with regulatory requirements.
Make sure to transfer funds to your futures trading wallet.
2. Choose the trading market
Go to the "Futures" section on the platform. Choose the currency pair you want to trade (such as BTC/USDT).
3. Determine the leverage level
Click on the leverage option next to the pair name.
Choose the appropriate leverage level (such as 10x, 20x... etc.).
> Note: The higher the leverage, the greater the potential profit, but also the increased risks.
4. Open the position
Types of trades:
Long: If you expect the price to rise.
Short: If you expect the price to drop.
Determine the trade size based on the leverage ratio.
5. Risk Management
Use "Stop-Loss" and "Take-Profit" orders to set exit levels from the trade.
Make sure not to risk more than a small percentage of your capital on each trade.
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Benefits of leverage on Binance
Increase potential profits: It allows you to control larger amounts than your actual capital.
Diversifying investments: With a small capital, you can open positions in several pairs.
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Risks of leverage and how to avoid them
Double losses: Just as leverage multiplies profits, it also multiplies losses.
Liquidation: If the market moves significantly against your expectations, you may lose your entire capital.
High volatility: Cryptocurrency markets are highly volatile, making risk management essential.
Note: Religious disclaimer, whether halal or haram, is your business.
Tips to avoid risks:
1. Start with a low level of leverage (such as 2x or 5x) until you gain experience.
2. Do not use leverage with money you cannot afford to lose.
3. Follow news and market analysis to reduce unexpected risks.
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Summary
Leverage on Binance is a powerful tool that can increase your profits, but it requires a deep understanding of the market and strict risk management. If you are a beginner, it is advisable to try leveraged trading with small amounts.
Start small and at a low level until you gain experience. Trading wisely and responsibly is key to benefiting from this tool.
