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Crypto Trading

Margin Trading

Margin Trading

As explained in the Trading Strategies school program, Margin Trade refers to a trade mode in which users borrow a certain amount of digital tokens by pledging digital tokens in KuCoin to make a long (buy) / short (sell) operation, so as to leverage large funds with small funds to earn more profits.

Be careful when you are trading with leverage! Yes, it might increase your profit, however, it can also increase your losses. Do not use the margin trading technique if you do not have funds to cover up that loss.

How to Borrow Money

If you already have assets you can simply transfer them from the Main Account to Margin account with a few simple clicks like we did in lesson one, chapter 2.

However, if you would like to borrow the money from KuCoin, you simply go to the “Earn” tab and select the “Lend” option. All you have to do here is decide how much you would like to borrow and click the “BorrowUSDT” button. When you click the "Transfer" button, you can click on the "Drawdown Triangle Symbol" and "Transfer Symbol" on the current page to complete your transfer among Margin Account, Main Account and Trading Account. Or you can borrow money while trading on the market in the small box on your left (look at the picture).

How To Make a Margin Trade

In margin trading, the earnings can be magnified if your prediction moves in the same direction as the market moves; However, your losses can be increased correspondingly if your predictions move opposite to the markets. Please note the risk carefully when participating in margin trading.

To make a margin trade on KuCoin click on “Trade” as we did in Lesson 2, chapter 1, however now choose “Margin”. You will be taken to the exchange where you can trade with margin. Select the trading pair from the left column to enter the corresponding trading page. For example, let's take BTC/USDT, search BTC/USDT from the left column and click it. There are two options for Margin Trade on KuCoin: Long/Short. If you decide to go long, insert a price and amount and click “BUY BTC” (look at the picture). If you decide you want to short, again input the price and amount and click “Sell BTC”.

Margin Trade Example

Still find it difficult to understand Margin Trading? Here’s an example for BTC/USDT:

Buy BTC (Long): Lend USDT, buy BTC with USDT in Margin Trade.

When the BTC price moves up, going long is profitable. Close the position, sell BTC to USDT, the rest part of USDT is the profit after repaying the principal and interest.

Sell BTC(Short): Lend BTC, Sell BTC to USDT in Margin Trade.

When the BTC price moves down, going short is profitable. Close the position, sell USDT to BTC, the rest part of BTC is the profit after repaying the principal and interest.

Good Luck out there!