Home > How to Leverage Trade Crypto in 2025 > How to Leverage Trade Crypto in 2025
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Written by Sudhir Khatwani
Sudhir Khatwani holds a bachelor's degree from Vellore Institute of Technology and has made significant contributions as a Programmer Analyst at Cognizant, where he worked on critical projects for leading financial institutions like MUFG and CITI Bank. His technical expertise and analytical skills have been instrumental in delivering high-impact solutions within the financial sector. His expertise in digital assets and blockchain technology was further honed through his previous role as a content strategist for the prominent cryptocurrency exchange, CoinSwitch.
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Last Updated on January 28, 2025
Leverage trading in cryptocurrency offers significant opportunities, especially on platforms like MEXC.
Unlocking the potential of crypto leverage on MEXC can amplify your trading results, allowing you to control more prominent positions with a smaller initial investment.
This advanced trading strategy, though riskier, can be advantageous when executed with the proper knowledge and caution.
When you start on MEXC, navigating to the futures section and transferring assets from your spot account is crucial.
The platform provides leverage options up to 200x for various crypto pairs, giving flexibility based on risk tolerance and trading goals.
Understanding these leverage settings and their associated risks is critical to maximizing potential returns.
With this guide, you’ll learn the precise steps to leverage crypto on MEXC, from setting up your futures account to selecting appropriate leverage ratios.
Whether you are a beginner or looking to refine your trading strategies, this tutorial will equip you with the essential tools to thrive in the dynamic world of crypto futures trading.
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To begin leverage trading on MEXC, choose a suitable cryptocurrency exchange first.
MEXC is known for its features, including user-friendly interfaces, high-security standards, and leverage options of up to 200x.
Criteria to consider when choosing an exchange:
With these steps, you are now set up to start leverage trading on MEXC.
When engaging in leverage trading on MEXC, managing risk is crucial to preserve your capital.
Initial Margin and Maintenance Margin are two key concepts. The initial margin is the amount you need to open a leveraged position, while the maintenance margin is the minimum amount required to keep that position open.
For example, if you open a position with 50x leverage, your initial margin requirement might be 2% of the position’s value, but you must maintain a certain amount to avoid liquidation.
Example Calculation: Suppose you want to open a position worth $10,000 with 50x leverage. The initial margin would be $200 (2% of $10,000).
If the value of your position drops and your account falls below the maintenance margin, which might be set, for example, at $150, your position risks liquidation.
Keeping your account value above the maintenance margin is essential to avoid involuntary liquidation. Regularly monitoring your account value helps prevent sudden, undesired losses.
Monitoring Account Value: You can utilize different strategies to maintain your account value:
Tools and Features on MEXC:
Implement these practices to manage risk effectively on MEXC.
Example: A trader uses 10x leverage to trade Bitcoin (BTC) on MEXC.
Initial Setup: The trader has $1,000 and uses it as a margin to open a long position, effectively controlling $10,000 worth of BTC.
Price Movement: BTC prices rise from $30,000 to $33,000.
Outcome: The trader’s position increases in value by $3,000. Given the 10x leverage, this results in a 100% profit on the initial $1,000 margin.
Case Study: A trader uses 20x leverage to trade BTC without implementing a stop-loss strategy.
Initial Setup: The trader has $500 as the margin, controlling $10,000 worth of BTC.
Price Movement: BTC price drops by 5%.
Outcome: The trader faces liquidation, resulting in a total loss of the initial $500 margin.
Buying More Crypto: Using leverage can multiply your buying power, for instance, with 5x leverage, $1,000 turns into $5,000 worth of crypto.
Bear Market Strategies: Leverage can also be used to short the market. For instance, if you expect BTC to fall, you can sell $10,000 worth of BTC by using $1,000 of your margin at 10x leverage.
Leveraged ETFs can amplify your returns based on daily movements. Suppose you invest in a leveraged ETF during a rising market. If the market increases by 2%, a 3x leveraged ETF could increase by approximately 6%.
Risk Management: Always use stop-loss orders to prevent significant losses. For example, setting a stop-loss at 2% below the entry price on a 10x leverage trade can help manage your risk.
Monitoring Trades: Monitor your leveraged positions and adjust them to manage risk and maximize profits.
Leveraged tokens allow you to gain leveraged exposure to various cryptocurrencies without managing the complexities of margin trading. Each token represents a basket of perpetual futures positions, automatically rebalancing to maintain a desired leverage ratio.
Examples of popular leveraged tokens available on MEXC include:
Leveraged tokens can be advantageous because they handle margin, rebalancing, and liquidation risks for you. This simplification makes leverage trading more accessible, especially for newcomers.
Benefits of using leveraged tokens:
Leveraging crypto on MEXC can be a powerful tool for experienced traders with a firm grasp of technical and fundamental analysis.
When using leverage, it’s essential to manage risks carefully.
MEXC offers up to 200x leverage for perpetual futures and 10x for margin trading, providing flexibility to suit diverse trading strategies.
Key Recommendations:
With the right approach, leveraging crypto on MEXC can enhance your trading experience and potential returns. Always trade responsibly and be mindful of the inherent risks.
Sudhir Khatwani holds a bachelor's degree from Vellore Institute of Technology and has made significant contributions as a Programmer Analyst at Cognizant, where he worked on critical projects for leading financial institutions like MUFG and CITI Bank. His technical expertise and analytical skills have been instrumental in delivering high-impact solutions within the financial sector. His expertise in digital assets and blockchain technology was further honed through his previous role as a content strategist for the prominent cryptocurrency exchange, CoinSwitch.
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