How To Set A Stop Loss On Binance Futures-Guide In Simple Words.
In this article, I have attempted to guide in a very comfortable way How To Set A Stop Loss On Binance Futures.
Futures trading, also known as leverage trading is becoming extremely popular.
Why not take extra profits from the extremely volatile nature of cryptocurrencies by implementing leverage on your trades.
But with bigger profits comes higher losses. The more the leverage the huger the loss will be and your account can be liquidated in a matter of minutes.
No one desires to lose all of its capital. You should be left with something to carry on your trading. That is where stop loss will help you from getting rekt.
The chief difference between the spot and futures (leverage) trading is liquidation.
In spot trading, if you are down 50 to 100 percent form your buying price, your account will not be liquidated. You can still hold your coins hoping that their price will increase.
But guess what if you are playing with 100X leverage on Binance futures trading and price goes down only 1% from your entry point, then you are done, you are gone, your account is liquidated meaning you are left with nothing. zero account balance.
What is Leverage Trading on binance cryptocurrency exchange
To do Binance futures trading, you must understand the concept of leverage trading.
I try to explain every topic in very simple English so that my website visitors can easily understand the core concepts.
Leveraged trading is usually for advanced traders, that can get in and out of positions swiftly and can efficiently identify trends.
Amateurs traders should be quite careful while doing leverage trading. Use of Stop Loss is a must for new traders. It is more suitable to take some loss than to liquidate your account and left with nothing.
Leveraged trading is basically opening a trade with a much larger amount than a trader real capital which he or she owns.
Suppose a trader has 100 USDT in his, her binance cryptocurrency exchange
He uses 10x leverage on any trade. Now his capital is multiplied 10 times and becomes 1000 USDT.
Any profit and loss you make will be multiplied 10 times.
If your trade with 10x leverage goes in profit of 10%, your net profit will be 10×10=100%.
Meaning that you have earned an extra 100 dollars on your initial capital of 100 USDT. Now your net balance is 200 USDT.
But wait what if your trade goes the other way and binance cryptocurrency exchange
margin felülvizsgálata it is down 10% from your entry point with leverage of 10x.
Now your total loss will be 10×10=100%.
Meaning that your account is liquidated and your net balance is 0 USDT.
The foremost benefit of leverage trading is that you can invest some percentage of your capital and still can trade big.
If you have 1000 USDT in your pièce de monnaie binance
futures account you put only 100 USDT on a trade and хешрейт binance still trade big by applying leverage up to 1x to 125x depending upon the coins.