While the nature of other traditional businesses has taken a huge hit, the cryptocurrency market contrarily has seen a further upsurge in the current COVID-19 scenario. Cryptocurrencies have seen a sharp movement in prices, which has obviously triggered more trades. This is because price volatility is the key to determining trading strategy and investment decisions.
Entrepreneurs can make considerable profits from these up and down price variances. While this led to many digital assets reaching an all-time high in most cases, there are also cryptos that had been seriously affected and had lost major values. And, some investors were able to reach the top-of-the-line and made favorable outcomes, while others stumbled, hoping for better prices in the future.
Also, experts believe that the COVID-19 state will reinforce the tremendous value of crypto and blockchain. Considering all these aspects, What could be a better fit than an exchange that allows you to pitch in a minimum investment, but reap augmented profits without being prone to volatility? That is what leverage exchange software offers you.
Leverage exchange is the current hot trending exchange in the market, and the popularity has grown considerably over recent years. Here, in this blog, we are going to help you grasp insights into what a leverage exchange is and how it works, to figure out better strategies for the growth of your exchange business. So, let’s start off.
What is a leverage exchange?
Leverage exchange, also known as margin trading crypto exchange is a platform that allows investors to borrow funds from one another, or from the exchange itself, with a minimal initial deposit, to increase their trader’s position size, market exposure, and profitability. Here, the term ‘leverage’ refers to the borrowed funds, and ‘margin’ is the initial amount that the investor deposits with the exchange. The leverage ratio varies depending on each exchange. The exchange charges a nominal transaction fee for each transaction happening on the exchange.
How does leverage trading work?
To help you understand better here’s an example,
If you take our leverage exchange platform, we offer leverage upto 100X with an initial margin of 1 BTC. This means you can increase your market position and profit value by 100X. So,
With a transaction fee of 0.05% for the leverage of 100 BTC and a margin of just 1 BTC, you can earn $750 on every order.
Thus, for every 150 orders, you will earn,
Daily Earnings- $75000
Monthly Earnings- $2.25 million
Annual Earnings- $27.00 million
Understanding Going short vs Going long
Whenever you open a crypto leverage trading position, you will be given a choice between “going short” and “going long”. It is important that you understand these to make the most favorable outcomes.
Going long is when a trader predicts that the price of a particular digital asset or cryptocurrency will go up, while going short is the exact opposite. A trader will decide to go short when he/she predicts that the price value of the digital asset will decrease. What you need to understand most essentially here is that the exchange you trade on will hold collateral for the leverage that you borrow.
When you successfully close a trade, at a profit, the exchange will release the cryptocurrency you deposited to open the position, along with the profits. But, if you incur a loss, the exchange will automatically close the trade and liquidate your position. This occurs based on the price of the asset that you are speculating on reaching a specific threshold, known as the liquidation price. Therefore, it is very important that you clearly understand the market conditions and implement proper trade strategies for the exchange which will improve profit chances for both the users and the exchange. How can you achieve this? Let’s find out.
Strategies that will help with better favorable outcomes
- Setting clear goals
It is important to set a clear pre-defined goal i.e the profit number you want to achieve and stay focused towards achieving it. Letting yourself get carried away, and choosing long positions will lead to unnecessary losses.
- Increasing trade size gradually
For a novice trader, it is always a good idea to begin from smaller position sizes, practice and understands the skills, and then gradually increase the position size for better results.
- Understanding of TP (Take Profit) and SL (Stop Loss)
Grasping a clear understanding of the order types TP (Take Profit) and SL (Stop Loss) will help in a big way to minimize the risk values. The users can set specific profit/loss targets and the trade positions are automatically closed when it reaches the bankruptcy limit to avoid major losses with the help of these order types.
- Demo Trading
By practicing with demo trading, otherwise known as paper trading, users can learn and improve trading strategies. Paper trading platforms do not involve real money but display the real market value to help users determine strategies accordingly.
- Exchange fees/ Interest
Leverage/ Margin exchange platforms do not provide leverage for free. When you open a leveraged position, you must pay interest on the capital you borrow. Choosing the exchange with minimal exchange fees/interest is important for users, likewise setting minimal fees will boost the number of trades for the exchange owners.
Benefits of Leverage Exchange software
The Leverage or margin exchange software will have some essential features to deliver the complete purposes of its existence.
- High Leverage
This is for the users to allow maximum leverage to enjoy the high market exposure. They usually start from 2X and till 150X. This is wholly based on the needs of the user.
Leverage exchange software is equipped with many security features, including SSL integration, end-to-end encryption, and many security protocols like anti-SSL striping, Anti DDos, and more to deliver a secure medium.
It supports multi-chained process methods to allow the users to perform hassle-free transactions and provide smooth leverage and other transactions.
- Trading engine
The high potent trading engine that matches the seller and buyer seamlessly. The trading engine works when the seller is intended to sell his coin for another coin, and the trading engine will search for the buyer who wants the same coin and wishes to exchange the coin that the seller seeks.
- Admin panel
The Leverage exchange software comes with an exclusive admin panel that helps the handler to monitor and maintain the exchange software. It also allows them to intrude in any dispute that arises inside the Exchange software.
- Multi-chain Wallet
Multi-chain supported wallet to serve major cryptocurrency users and to ensure the broad transaction spectrum. This exchange software supports integration with most of the available types of wallets like cold wallets, paper wallets, etc.
Other than those mentioned above, the Leverage exchange software offers various benefits to elevate the user experience.
Fundamental leverage exchange features,
- GDPR Compliance
- Social/Copy Trading
- Advanced Order Types
- Powerful Trade Matching Engine
- Multi-currency Wallet
- Robust Admin Backend Panel
- Perpetual Contracts
- Multi-Account Management
- USB Custodian System
- Aggregated Price Feeds
- Improved Liquidity
- Auto Deleveraging
- Take Profit/Stop Loss
- Partial Close Orders Option
- FX/CFD Leverage
- Trading Bonus
- Affiliate Marketing
- Risk Management Strategies
- Enhanced security
Things to Utilize and Neglect in the Leverage Exchange software
Leverage tokens need more cautious attention while handling them in the market, and any misprediction may drain your complete fortune, take the below statements into account before proceeding with the leverage software,
- Utilize ADL
Auto deleveraging will keep track of the insecure traders and automatically cancel the contracts without any need for instruction. This is done to protect the user from being extensively lured into the insecure trader’s bankruptcy stage. Using ADL will allow you to stay on the safer side of the Leverage exchange.
- Stop Loss
This will allow the trader to set a height level, where the contract will automatically disband and enable the trader to fetch the profit he already desired. This will prevent the traders from taking last-minute risks that get them down.
- Stay on the safer side.
The leveraging process can get you more profit than many other existing identical exchanges. Still, one misconception about the rise and fall of the market is enough to draw out the fortune you made in the years.
- Keep them moving
To be precise Leveraged tokens are not actually for investment. They are a tool to save you from drowning. If you prefer the Leveraged tokens for investment, then you should stop right now.
- Partial closure
Aware of the partial closure method where you can stop the leveraging contract if you think you had enough in the space. This will come in handy when you decide to play a completely safe game.
These are the key basics you need to know about a leverage trading software before commencing your business. If you aspire to be a part of this exclusive exchange business or wish to know more information about the exchange, working, features, price, etc, you can get in touch with our experts or try our demo.
Our highly qualified and extensively experienced developers will help with robust white-label solutions for your cryptocurrency exchange with leverage platforms, integrated with core features, functionalities, and trading strategies that will create a win-win for both users and exchange owners. Connect with us, and we’ll discuss a lucrative business opportunity.