WHAT THE FUCK IS LEVERAGE

It's trading with borrowed money.

buy $1000 of Bitcoin using $100 as collateral and you're using 10x leverage.

Think of it as turning the volume up on your money.

100 x () what of eth. You have to have an initial balance. 100 x 0 is 0.. so no.

You'd get 100 dollars if you have 3.05$ worth of eth and you longed x100 (= 305 or 1 ETH) at 305 and it went to 405 and you sold.

or short at 405 and went to 305. but you would have to have 4.05$ to short at that price with 100x and make 100 dollars.

and no, its not like options, it stays open until you hit your take profit price or a stop loss or you are liquidated.

Who is she and why is she not naked and straddling my face?
Nice digits btw

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If i have 300 worth of eth and short 10x i will make it but if it ends up going up instead what happens

>she
user, I...

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cute hair

very

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Then you are financially ruined.

Wait but i only put in 300 so i only lose that. Doesnt seem bad

That's how gambling addiction usually starts. You win a few the first time with small amounts so you become cocky. You go all in with your life savings and get liquidated.

Oh thanks
>tip 1eth

anyone else owe arthur hundreds of thousands after a margin trade gone wrong?

Just want to use this thread to discuss how using Leverage impacts Liquidation Price, because I gave an answer about it in a prior thread that wasn't entirely correct.

The OP asked this question: And he was essentially asking if using more Leverage would reduce your Initial Margin (which it does), and he also wanted to know how that would impact Liquidation Price.

I correctly stated that, for a given Position Size, as more Leverage is used, the Liquidation Price for a Long position would increase (and would decrease for a Short position).

However, my reasoning was not correct for Kraken, specifically, because Kraken calculates the Maintenance Margin based on Initial Margin (80% of the Initial Margin), rather than calculating it based on the Total Position Size, as it is often done when trading stocks on Margin (and what the picture I was posted was showing an example of).

And so, I just wanted to correct this explanation:

Let's say you want to have a Long position amounting to 1 BTC, and you want to use Leverage to achieve that amount.

How will different levels of Leverage impact your Liquidation Price?

1 BTC Long using 5x Leverage:
- Initial Margin: (1 BTC/ 5) = 0.2 BTC

- Percentage BTC must move for that amount to be Liquidated: 5x Leverage * 4% = 0.2 BTC (BTC must fall 4% for a 1 BTC Long position, using 5x Leverage, to be Liquidated)
1 BTC Long using 10x Leverage:
- Initial Margin: (1 BTC/ 10) = 0.1 BTC

- Percentage BTC must move for that amount to be Liquidated: 10x Leverage * 1% = 0.1 BTC (BTC must fall 1% for a 1 BTC Long position, using 10x Leverage, to be Liquidated)

Notice how using more Leverage means that BTC needs to fall LESS for a Long position (of a given size) to be Liquidated?

this was the question asked specifically about how Leverage impacts Initial Margin and Liquidation Price.

I'm also pretty sure exchanges keep track of each bet and then manipulate the market to the side that will end up getting the most people liquidated.

You are so newfag it hurts holy shit, it never hurts to lose money, it hurts being WRONG, and you need to prove that you are RIGHT to the market, so you waste again 300 and 300 more until you are proven RIGHT

this isn't about money, it's about being RIGHT and being superior to other traders, to the "big other trader" which you need to absolutely KILL

Actually when you win money it feels kinda ok, but losing money because of a wrong choice feels like the stingiest feel you will ever take in your life, it will nag you down feeling depressed for fucking WEEKS if not MONTHs if it was something really important

For example, those fuckers who were shorting the bottom, i bet my ass some of them actually killed themselves not meme way, i mean, they actually put a rope to their necks because the nagging feeling of shorting the bottom was making them utterly depressed

Trading is not a meme, you are seriously fucking with the occult and psychological forces not meant for a common human being, be fucking aware, you will understand WHY money is the fucking devil and the source of all human evil in the world

2x leverage means a move of 50% liquidates you
3x means 33% to liquidate
5x means 20%
10x means 10%
20x means 5%
100x means 1%

and so on... every broker has his own personal "tick" where it shows their own price because if it were real real time it would be too chaotic, actually some brokers trade against you when you do high leverage since the price isn't real (like in forex)

I thibk im getting it thanks but im not a newfag just new to the margin stuff!! I have 2 bitcoins!

well trading is not the same as holding, it's actually 2 completely different mental states

money you borrow to increase return on investments (because you are putting more money on it)

Can i have your discord

Oh fuck, just realized what I messed up in my explanation here boards.4channel.org/biz/thread/14298188#p14299654: I'll delete it and repost.

Dont do it bro, u seem alright and trading takes years of winning and losing.
Dont jump into margin trading unless the money u ise literally means nothing.
The stress will fucking eat you alive. Its the real deal pull your hair out type of shit. Be gratefull for your 2 bitcoins and dont get too greedy bro. Take out a few hundred or a thousand and start swinging some alts at 5-10% increments

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This girl looks so nice, I'd take her even if she doesn't have a dick.

Makes sense to me friend maybe ill hold off.

This. Jesus this.

Reposting with corrections (can't seem to delete this):

How will different levels of Leverage impact your Liquidation Price?

1 BTC Long using 5x Leverage:
- Initial Margin: (1 BTC/ 5) = 0.2 BTC

- Percentage BTC must move for that amount to be Liquidated: 5x Leverage * 20% = 1 BTC (BTC must fall 20% for a 1 BTC Long position, using 5x Leverage, to be Liquidated)

1 BTC Long using 10x Leverage:
- Initial Margin: (1 BTC/ 10) = 0.1 BTC

- Percentage BTC must move for that amount to be Liquidated: 10x Leverage * 10% = 1 BTC (BTC must fall 1% for a 1 BTC Long position, using 10x Leverage, to be Liquidated)

leverage is a tool to protect your investment
or lose everything if you are a retard

leverage your skirt, bitch
AAAHAHAHAHAHAHAHA

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Use cross margin you faggot

Good info guys thanks

>BTC must fall 1% for a 1 BTC Long position, using 10x Leverage, to be Liquidated
*fall 10%

there are no discords for real trading, you are on your own, frens aren't frens, freedom isn't free

What if i have more questions fren

Nice digits, big boy, do you often come here everyday?

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>Trading is not a meme, you are seriously fucking with the occult and psychological forces not meant for a common human being
Expand on this. What exactly do you mean?

Kek

Apologies the spam when I explain things, just takes me a while to break things down to simpler way of understanding something:

Whenever you're trading on Margin, the amount of unrealized gains or losses your position currently has gets added/subtracted to Equity (the Initial Margin) you have in the position.

So to explain why this happens:
>2x leverage means a move of 50% liquidates you
>3x means 33% to liquidate
>5x means 20%
>10x means 10%
>20x means 5%
>100x means 1%

Let's say you take a 2 BTC Long position, using those different levels of Leverage:

2x Leverage:
- Initial Margin: (2 BTC/2) = 1

- Liquidation %: (1 BTC Initial Margin / 2 BTC Total Position Size) = 50%

3x Leverage:
- Initial Margin: (2 BTC/3) = 0.67

- Liquidation %: (0.67 BTC Initial Margin / 2 BTC Total Position Size) = 33%

5x Leverage:
- Initial Margin: (2 BTC/5) = 0.4

- Liquidation %: (0.4 BTC Initial Margin / 2 BTC Total Position Size) = 20%

etc.

Liquidation essentially is how much Equity in your position (as a percentage) that you can lose, before your position gets closed out entirely. The less you have initially (for a given position size) the faster it happens.

I like threads like these, allows me to try figure shit out better.

So if i do a 100x leverage and it goes down 1 percent im instantly out of money? But if i do a 2x it can go 50 percent in one direction before its all gone?

>Think of it as turning the volume up on your money
kek

Normally when investing you take the stairs up and the levator down, with leverage you take the elevator up and the window down

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Yeah, but before that happens, there's usually something called a Maintenance Margin (I mentioned it earlier). If your Equity in the position falls below the Maintenance Margin level, you'll get a Margin Call, where your broker will require you to deposit more Margin (Equity) into the position, usually to bring it back up to the Initial Margin level.

If you don't respond to the Margin Call, you get Liquidated.

You will lose 10 dollars on your 1 Eth for every 1 dollar up a single Ethereum goes

This user explains it well

Whats a margin

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It's the amount of your own money (Equity) that you put into a position. I see a lot of crypto trading platforms referring to it as a "Collateral Amount". A Broker is lending you money and the Margin you put up is basically what the broker will hold as security against the position you take.

You can end up taking larger positions than you could otherwise do so, because of this. You put up some, the Broker lends the rest.

Hodlpleb cope.

leverage is basically renting bitcoin and collecting the price difference from the price you buy it to the price you sell it or vice versa.

Thanks for the help everyone i wont be doing this anytime soon.