If you want to start trading Bitcoin with leverage, there are some things that need to be taken into an account. Many people just flock to the first trading platform that they find without even knowing how leverage works and the overall design logic. Treating trading like gambling most likely will lead to an undesirable outcome as the probability to lose is 90%. The worst thing that you can do is to treat trading in such a way as it is not sustainable in the long term.
There are a few steps that you need to do in order to start trading Bitcoin in the safest way possible. Of course, you can start trading right away on some random platform without doing any research, which is not recommended at all. It is always better to gradually make your way into trading with leverage.
Research the trading platforms
The first and most obvious step to do is to research the trading platforms in order to choose the one that will suit your personality the best. Keep in mind that the trading platforms offer different leverage and different trading pairs. Almost on all of the high profile trading platforms, you will find a big difference in trading instruments and exposure.
Here are the main things that you should check on each exchange that is offering leverage trading for Bitcoin:
- What is the max leverage
- Trading instruments
- Deposit and withdrawal options
- Is the trading platform using Closed or Cross margin for the open positions
Those are important things that need to be taken into account in order to find which one will suit your trading habits and which one will be most suitable for your trading strategy.
Here are some of the high profile trading platforms which you can check:
Decide on your trading strategy
Before you start trading, it is recommended that you decide on your strategy over the long term. As being profitable in the long term is the purpose of trading, it is best to come out with a strategy that will fit in this frame. Of course, you can decide to go with a highly aggressive trading style while utilizing the highest possible leverage with your positions.
Set-up your trading space
The next thing that you want to do is to set up your trading space on the platform of your choice. Thus adjusting the trading indicators, positioning tabs for more clear picture, etc.. that will provide the highest effectiveness during your trading sessions.
Decide how much of your funds you are willing to risk while trading with leverage
This is step is very important as you don’t want to go all-in and get rekt in the blink of an eye. It is always better to start small and divide your available capital keeping a reserve in case you need to add more liquidity to your account. If you are just starting to trade with leverage, it is recommended that you use no more than 10–20$. Don’t forget that with 100x leverage exposure, those 10$ gives you the power of 1000$, of course, this is if you use the usual maximum on the trading platforms, which is not recommended.
Set a target on which you will withdraw profits no matter what
Set yourself a profit target on which you will withdraw a percentage of your capital. This is for assuring that you are locking up clean profits outside of the account on the trading platform that you are trading on. It is always a good thing to take profits out of the table, no matter how small they may seem. Many new traders make this mistake because of them being greedy to see a big number, unfortunately, in trading, big numbers come with high risk.
In order to start trading safely, it is recommended to make some preparations and research in the beginning, as we explained in this article. Providing yourself a very needed basis, so you make a more educated choice. Of course, there are many factors that you need to include when you start trading on your trading platform of choice. It is a long road, but the importance is to just start, it is easier to start than most people think, but it is hard to be profitable in the beginning. In conclusion — if you are completely new to trading, especially if you first start with the crypto market do your research, read about the indicators, how leverage works, markets, and trading styles.