JAKARTA - Trading futures allows you to open up positions with a much larger value by using leverage. However, the higher the leverage used, the more important it is to manage the margin wisely so that the position remains in various market conditions. In this article, we will discuss what leverage, risks need to be considered, and high leverage usage strategies.
Leverage is a feature that allows you to open up a bigger position than the amount of capital you have. For example, with a 10-x leverage, you can open up a position worth USDT 1,000 for just USD 100.
This feature can indeed increase the potential for profit, but also increase the risk of loss risk. Just a little price moves in the wrong direction, your position can be immediately closed (liquidated) if the margin is not enough.
If you are still a beginner and want to try trading futures with high leverage, there is no need to worry. This article was prepared to help you understand the basics more clearly so that you can take wiser steps in the future.
When trading at Pintu Futures, you can manage your leverage between 1-25x. This means that you can open up to 25 times bigger than the available margin. Using high leverage, it is indeed possible for traders to open up a much larger position with limited capital. But without the right strategy, the use of leverage can lead to huge losses. Here are some strategies that can help you manage high leverage with more responsibility:
1. Determine Margin Properly
Avoid using too much margin in one position. For example, consider allocating a maximum of 5-10% of total capital as an initial margin for each position to manage exposure more effectively. The rest can be used as a margin to withstand losses in case of analytical errors.
If you refer to the example of the case above, by simply using an initial margin with a total of USDT 50 from an account balance of USDT 500, then you don't use all the balances on the account.
In comparison, if you use a full leverage of 25x, your account is only able to withstand losses of 3 percent of the portfolio value before finally being liquidated. So, by adjusting the amount of capital used and the size of the position, you are actually managing leverage effectively and at the same time reducing the risk of liquidation.
Many beginners do not understand properly how to calculate margins when using high leverage. As a result, the position opened is too large compared to the capital capacity, even though the available margins to withstand price movements are very limited. This margin miscalculation makes the vulnerable position liquidated because there is not enough bantal' to bear market fluctuations.
2. Always Use Take-Profit And Stop-Loss
In trading futures with high leverage, take-profit and stop-loss are steps that should not be ignored. Stop-loss helps limit losses automatically, while take-profits lock profits according to target. This habit supports discipline and keeps your trading strategy going according to plan, without being disturbed by a moment of emotion.
In addition, you can also calculate take-profit and stop-loss ratios based on the risk-to-reward ratio. This ratio is useful to ensure the potential gains are commensurate with the possible losses. For example, with a ratio of 1:3, it means that each USDT 100 loss potential must be balanced with a minimum profit target of USDT 300.
In addition, use the limit order when executing take-profit or stop-loss, especially in highly volatile markets. The use of the limit order can help reduce the impact of price movements on order executions, which often occur when prices move quickly.
3. Manage Emotions and Avoid Overtrading
Trading with high leverage makes the balance value change very quickly, even in a matter of minutes. This condition often triggers emotional pressure, ranging from fear of loss to excessive desire to gain big profits. Not infrequently, traders actually open up positions repeatedly without careful consideration, just because they want to cover their previous losses or catch an impulsive advantage.
This habit is known as overtrading and the risk is very large because it can drain capital in a short time. To avoid this, stick to the planned trading that has been made, limit the number of positions that are opened, and give a pause so that the mind remains clear before deciding the next entry.
4. Choose Assets with the Right Consideration
Not all crypto assets are suitable for high leverage trading. If you are still a beginner, you should choose assets with a high market capitalization size, for example such as BTC, ETH, or SOL. Largely capitalized assets generally have a more stable price movement, so the risk of liquidation is easier to control.
In addition, you can also take advantage of market momentum by paying attention to the funding rate. The large funding rate, for example, ranges from 0.5 percent to 2 percent, can be an indication that asset sentiment is strong in one direction. When the funding rate is negative, it means that the majority of traders open up short positions, so that traders who choose long positions will get funding payments. In short:
This is a negative fund rate. The majority of traders take the short position. This is a positive fund rate, especially when the majority of traders take long positions.
You can buy crypto assets at Pintu by following the following steps:1. Enter the Pintu.2 application homepage. Enter the Market page, look for crypto assets such as BTC, ETH, SOL, or XRP.3. On the token page, you can see the asset price movement plot within 24 hours, 1 week, 1 month, until 1 year. 4. After being on the token page, click Buy or Buy and enter nominal.5. Click Continue.6. You have managed to buy crypto assets!
Your security as a Pintu user is guaranteed, as Pintu is overseen by OJK and CFX. In addition to trading, Pintu also allows you to learn more about crypto through various articles at Pintu Academy, updated every week!
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