Trading Litecoin with leverage allows us to enter positions larger than our capital would allow if we trade LTC on a standard exchange. This is achieved by borrowing funds. Of course, nobody is going to lend us funds for free, so we need to provide collateral in the form of margin. If the market goes against us, we stand to lose some or all of the margin we used to enter the position.
However, if we predicted the market’s movement correctly, we can obtain returns that wouldn’t be achievable if we simply went with a non-leveraged trade. Therefore, margin trading is a double-edged sword with potential for both outsized gains and losses.
In recent years, cryptocurrency margin trading platforms have grown in popularity, with many different options being available on the market. Currently, the most popular such platform is BitMEX, which we have already covered in a previous guide.
In this article, we will be taking a look at PrimeXBT, which offers 100x leverage on all its listed crypto assets (Bitcoin, Ethereum, XRP, Litecoin and EOS). In addition to cryptocurrencies, PrimeXBT users can use their BTC to also speculate on other markets such as forex.
Like other similar platforms, we can use PrimeXBT to speculate on whether a cryptocurrency is going to increase or decrease in value. This makes it possible to profit from trading cryptocurrencies even in a falling market.
An important thing to note about PrimeXBT is that all withdrawals and deposits are made with Bitcoin, even if we are using the platform to speculate on the price movements of another crypto asset, for example LTC.
1. Create an account
Head to PrimeXBT.com and click “Register” or use our referral link:
Then, enter your e-mail address and password. Be sure to use a password that is both strong and unique (not used in any of your other accounts). You will receive an e-mail to confirm the registration.
2. Fund your account
In order to start trading on PrimeXBT, you will first have to deposit some Bitcoin. When you log in to the platform, you will see a Bitcoin address that has been assigned to your account as a deposit address. The minimum deposit on PrimeXBT is 0.001 BTC.
Once the deposit is completed, you will need to transfer some of the funds from your PrimeXBT “wallet” to your PrimeXBT trading account. This internal transfer is done instantly.
3. Place an order
Now that your trading account is funded, you’re ready to place your order. As an example, let’s say that we believe LTC will gain value against the USD in the short term – we want to open a long position.
When getting started on PrimeXBT, it’s best to start out with small trades, so that you can get a better feel for the platform first. Be sure to also read the relevant guides at the PrimeXBT help center to understand how the exchange works in detail.
There are multiple ways to place an order via the PrimeXBT interface. In this guide, we will be placing our order from the exchange’s chart widget. Type in LTC/USD to access the LTC/USD chart. If you want, you can adjust the chart’s timeframe, draw trendlines and change the chart’s appearance.
Since we want to go long on LTC/USD, we will click the “Buy” button. If you want to go short, click “Sell”. An order window will pop up where we can adjust all the relevant parameters of our order. We can choose between a market, limit, stop or OCO (one cancels the other) order. For the sake of simplicity, we will use a market order, but you will often want to use limit orders or other types of orders, depending on your trading strategy.
We will enter a position worth 2.5 LTC with 100x leverage. In order to enter this position, we will need to provide 0.00024151 BTC as margin (“margin impact”). The margin impact cannot exceed the available margin of our trading account. You can also set your stop loss level (the price level at which your position will be automatically closed to avoid further losses) and take profit level (the price level at which your position will be automatically closed to take profits).
Make sure to keep a close eye on the status of your trading account, which can be monitored on the top right corner of the PrimeXBT interface. Here, you can see your balance, equity, unrealized profit/loss, used margin and available margin.
The PrimeXBT help center explains each category:
- Balance – Funds deposited to your trading account excluding Unrealized Profit and Loss
- Equity – Portfolio balance including Unrealized Profit and Loss
- Unrealized PL – Floating Profit and Loss, the aggregated result (unrealized) of all your opened trading positions
- Used Margin – The amount of BTC currently used to cover the margin requirements of all opened positions
- Available Margin – The funds available for margin trading derived from subtracting used for margin requirements from Equity. Represented in BTC
- Available Margin, % – Same as above but represented in % from the total balance. (Available Margin/Equity) * 100%
We can monitor the status of our position in the “positions” widget. Here, we can see our current profit/loss, take profit price and stop loss price. By right clicking on our position, we can modify our take profit and stop loss levels.
If you want to manually close your position without waiting for the price to hit either your stop loss or take profit levels, you can do so by clicking the “x” button on the right side of your position.