Margin:
The is your capital or should I say existing balance
Liquidation price:
This is the final price at which you will be pulled out from the trade and sent back to your village
At this point the coin must have dumped to the extent that your margin has been exhausted and can’t keep you in the trade any longer. So you’ll be liquidated
Entry:
This is the price at which you buy the coin/enter the trade.
Leverage:
Leverage Trading in Crypto denotes a tool that allows investors to make spot transactions (purchase and sale) with the help of borrowed capital from brokers. Usually, these funds exceed the account balance of the investors. Therefore, it is a perfect way of maximizing profits by increasing purchasing ability
The leverage ranges from 1x - 75x then 125x when your margin is a little bigger…
So this means if you have 10$ and you set your leverage at 20x binance will multiply your margin by 20.
That is your 10$ x 20leverage = 200$
So you’ll be entering the trade with 200$ without actually having it in your wallet
One more example on leverage
Assuming you have 10$ and you want to make a trade with 100$ but you don’t have anywhere to get extra 90$ you can just increase your leverage to 10x,
It will multiply your margin which is 10$ by 10 giving you The 100$
Note: The same rate at which you earn in the trade using a high leverage is the same way you’ll lose everything when the market dumbs,But then there’s provision for risk management and also loss management You can control the amount you lose using
Stop Loss and Take Profit
These are the two most important tools any futures trader Must know how to use
[12/8, 9:47 PM] +1 (765) 780-7589: Stop Loss and Take Profit
[12/8, 9:51 PM] +1 (765) 780-7589: The stop loss
This enables you to manage your risk and say that “okay if anything goes wrong in this trade I’m willing to lose only 5$”
and then after setting your stop loss unfortunately the coin does the opposite of what you predicted and there’s a major loss on the market, when people are loosing thousands you’ll only lose that 5$ you set aside.
TAKE PROFIT
There’s take profit
It’s self explanatory
The price at which the coin would take profit and pull you out of the trade in other to secure your already existing profits