I never do that. I find leverage trading to be completely unnecessary in crypto because the entire space is very volatile and because there is way too much high-amplitude noise in the price action for comfort. The movements in spot price are large enough.
Not only is there a lot of noise in the price action but engineered pump and dump schemes to cause long and short squeezes implemented by whales and even exchanges themselves according to rumors. Leveraged positions are downright dangerous in crypto.
What I do is HODL. I do not even trade. Every time I've tried something more complicated than that I've found it to be more trouble than it's worth. Hive and Hive-Engine tokens are the only exceptions. I also got myself some CUB to experiment with.
How about you?
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I'm still new, and I am still working out how various trading aspects work. If I am right, leverage is "borrowing" money to invest in a market when you think it is down, and when it is up you extract the money, pay back the original capital, and the "profit" is then yours.
I think Leveraging is very risky. What if you leveraged at the wrong time (e.g. Sat PM, just before Sun AM drop this weekend)?
I totally agree with you that the market is volatile enough not to have to worry about leveraging. I'm glad that I don't leverage as my "bot" purchased some crypto at spot price on Sat PM before the drop - but at least I didn't end up loosing more than I actually have !
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That's the basic idea of leveraging.
If you take a leveraged long position and the price crashes, you might run out of collateral and get margin called. Your position could be auto-liquidated and you'd suffer a bigger loss than without leverage. In traditional markets, your broker might ask you to increase your collateral to avoid getting your position liquidated.
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No. I've done that once but not successful. It's simply not for me.
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I do use leverage and I'm not even sure what it means lol.
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It essentially means investing in an asset with borrowed money.