In traditional markets a 10x long generally refers to a trade ten times the size of the trading account.
In crypto markets a 10x long generally refers to a trade ten times the size of the position margin.
In crypto markets a 10x long generally refers to a trade ten times the size of the position margin.
That is so as Bitmex innovated by implementing "isolated margin", which separates the margin of a position from the rest of the account.
Don't have isolated margin outsde of crypto.
Don't have isolated margin outsde of crypto.
In crypto a trader taking a 20x long is generally someone using 20x leverage using isolated margin, which technically means trade has a 5% stop.
Given how price gaps, it is best to use high leverage only with isolated margin (as a stop loss).
100x => 1%
20x => 5%
5x => 20%
Given how price gaps, it is best to use high leverage only with isolated margin (as a stop loss).
100x => 1%
20x => 5%
5x => 20%
Let's define leverage as:
Leverage = Trade Size / Margin
Leverage can be increased either by increasing Size OR by reducing Margin.
Increasing leverage in crypto platforms reduces Margin, therefore increasing leverage doesn't increase risk, but rather reduces risk.
Leverage = Trade Size / Margin
Leverage can be increased either by increasing Size OR by reducing Margin.
Increasing leverage in crypto platforms reduces Margin, therefore increasing leverage doesn't increase risk, but rather reduces risk.
More leverage => less risk.
That is counterintuitive, and can thus be confusing for many.
That is counterintuitive, and can thus be confusing for many.
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