How to Use Bitunix Leverage Trading: A Comprehensive Guide

If you want to trade crypto with a larger position size, then take a look at Bitunix leverage trading. Bitunix doesn’t require KYC, and offers leverage of up to 125X when trading futures, although the maximum amount of leverage available depends on the token.

To get the most out of Bitunix leverage trading, this Bitunix futures guide will look at how to trade futures on Bitunix, and at some of the features to be aware of so you can maximize your crypto profits.

The Benefits and Risks of Bitunix Leverage Trading

When trading with leverage, or margin trading, we’re actually trading perpetual swaps, which are futures contracts without an expiry date. This means we don’t buy or sell the underlying crypto tokens, but we’re speculating on the price going up or down.

A key benefit of this kind of trading is that you can use leverage, meaning you control a larger position using funds borrowed from the exchange. So if you trade with $100 using 10X leverage, you control a $1,000 position, which means any gains will be multiplied by ten.

Also, you can take a short position, meaning you’re betting on the price going down. This isn’t possible when spot trading, when you’re simply holding an asset because you think the price will go up.

But these advanced trading tools bring additional risks: just as gains are amplified, so are losses. So if a position moves against you when you’re using 10X leverage, your loss will be multiplied by ten.

Also, there are liquidation risks. When you open a leveraged position, you’ll see a liquidation price, and if the asset price drops to this level (or rises in a short position), then you lose all of the collateral you placed in that trade. And the higher the leverage, the tighter the liquidation price.

Additionally, when using Bitunix futures, trading fees are multiplied according to your leverage level, and funding rates (more on those below) are also multiplied.

What Are Long and Short Positions?

When you open a long position, it means you’re betting on the price going up. In a short position, you’re betting on the price going down, so you can think of it as a spot trade in reverse, but with the option of using leverage.

So if you open a 10X short position and the price goes down 5%, then you make a 5% profit multiplied by ten (the amount of your leverage). But of course, if the price goes up, you make a loss, and the liquidation price will be higher than the price at which you enter the position, with Stop Losses also set above the entry price, and Take Profits below.

How to Use Leverage on Bitunix

If you don’t already have an account on Bitunix, then please take a look at this guide–Getting Started With Bitunix–for a summary of the basics.

But with an account set up and funded, let’s continue the leverage trading guide, and you need to move some USDT from your spot trading account to your futures account to use as margin for your trades–this is the collateral you will borrow against.

To do that, click on Spot Account in the dropdown under the Accounts tab, and then click on Transfer at the top right. You can then move funds from the Spot account to the USDT-M account (which is the name of the futures account).

That done, click on the Futures tab and you’re ready to trade in the Bitunix futures market.

So first, select the pair you want to trade. Let’s use BTC/USDT for an example, which is a good choice anyway as it’s the biggest crypto, with the longest track record, and the most trading analysis.

Then you can enter your trade in the input panel to the right, which goes like this:

• Select cross or isolated margin. More on that below, but as a default when you start trading, use isolated.

• Adjust your leverage rate. Single digits is not too risky, and perhaps begin with 5X or lower to get started.

• Select Limit or Market order. If it’s a Limit order, you then need to enter the execution price. If it’s a Market order, it simply executes at the best market price.

• Enter how much to buy. You can use the slider to allocate a percentage of your available funds.

• If you’re opening a long position, select Buy TP/SL, and enter trigger prices for a Take Profit and a Stop Loss. If you’re opening a short position, select Sell TP/SL. You don’t have to use these, but they are recommended.

• Click Open long or Open short to place the order.

Viewing Your Positions

If you look below the price chart, then under the Positions tab you can view the details of any positions you have open. This includes details such as the entry price, mark price, liquidation price, and PnL (profit and loss). You can edit the details of your position here–such as the margin and leverage amounts, and the TP/SL–and you can manually close the position from here.

You can also view your positions on the chart itself, and you can alter the Stop Loss and Take Profit by simply sliding them up and down, or you can click on the X to cancel them altogether.

What Is the Funding Rate?

To the top right of the price chart you’ll see Funding Rate/Countdown. When this gets to settlement time (which is three times a day on BTC), rates are paid either from long positions to short positions (if the funding rate is positive), or vice versa if the rate is negative. This means you may have to pay, or you may receive payment.

Funding rates can indicate market sentiment and show how crowded the market is on either side. So for example, a high positive funding rate indicates bullish sentiment, but if prices are moving up and the funding rate is increasing, then it starts to look like a crowded trade and the market might be getting overheated.

Manage Your Risks

Bitunix leverage trading is riskier than spot trading, but you can get comfortable with advanced trading by managing that risk in the following ways.

• Use Isolated Margin. If you select cross margin, all open positions draw on everything in your Futures account for collateral, creating the possibility of the entire account getting wiped out. On the other hand, isolated margin keeps every position separate from the others.

• Don’t go crazy with the leverage. You can trade with up to 125X but this doesn’t mean you should trade with 125X. When you’re getting to grips with margin trading, keep the leverage low, maybe even just 2X at first.

• Use TP/SL. To avoid liquidation, set a Stop Loss, and to lock in profits and improve discipline, set a Take Profit at an appropriate level. Stop Losses should generally not be too tight, as trades need space to absorb some volatility.

• Add a trailing SL. This is a Stop Loss that dynamically adjusts upwards as the price goes up (or vice versa in a short position), locking in profits if there’s a big enough price correction.

• Adding margin. If you’re close to the liquidation price but you want to keep the position open, you can add more margin, thereby reducing the margin rate and moving the liquidation price further away.

To learn more about these Bitunix leverage trading strategies and more, please take a look at this earlier article: Advanced Trading Techniques on Bitunix.

Bitunix Leverage Trading Tips

The risks and rewards are amplified when you take advantage of Bitunix leverage trading, so sticking to best practices and staying in the right mindset is more important than ever. That being the case, let’s run through some simple tips to create an efficient futures trading strategy.

• Get to know a small number of assets. In crypto, there’s an ever-growing number of highly volatile tokens, including the strangest of all–meme coins. However, you don’t need to be on top of them all, and for trading purposes you could even just stick to BTC only.

• Don’t over-trade. The market is always there and you can go long and short, profiting from both bullish and bearish trends. If a trade doesn’t stand out to you, then don’t trade until later.

• Get to grips with Technical Analysis. Just gaining initial familiarity with a few chart patterns and well known indicators can help when it comes to figuring out entries and possible exits for your Bitunix leverage trading positions.

• Follow the news, both in crypto and more widely. Markets react in the short term to news events, and in the longer term to the macro environment, and crypto is risk-on, gaining from increases in global liquidity. Also, be aware of our position in bitcoin’s four-year halving cycle, because the whole of crypto, up to now, has correlated closely with this pattern.