BUY with leverage

[naleche]

Hello,

I may go around the forums and tutorials Youtube I can't find an answer to a question.

For example in a config or Bitcoin is at 1100$.

I want to buy on Kraken when it is 1000$
I have on my account 2000$
So theoretically I could buy buy 2 BTC.

But I want to buy 4 BTC so it costs 4000$.
If I use leverage x2 this is therefore possible. Kraken will lend me 2000$.
To buy at 1000 euros I make position with a limit order.
But while the order doesn't go through I don't have any fees, right?

Let us admit the order goes> I therefore have 4 BTC bought at 1000$.
6 months later the value of the BTC rose to 10,000$, I decided to sell my 4 BTC. (40,000$)
During these 6 months Kraken counted 0.01% per hour since the purchase?

How much will that reporter me?

If anyone can enlighten me it would be great.
Thank you 

[1713500568]

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[1713500568]

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[1713500568]

1713500568

[BitMaxz]

Hello,

I may go around the forums and tutorials Youtube I can't find an answer to a question.

For example in a config or Bitcoin is at 1100$.

I want to buy on Kraken when it is 1000$
I have on my account 2000$
So theoretically I could buy buy 2 BTC.

But I want to buy 4 BTC so it costs 4000$.
If I use leverage x2 this is therefore possible. Kraken will lend me 2000$.
To buy at 1000 euros I make position with a limit order.
But while the order doesn't go through I don't have any fees, right?

I don't know how kraken  works but I think there's no fees when you cancel the order just like the same as other exchanges.

Check this "How trading fees works on kraken

Let us admit the order goes> I therefore have 4 BTC bought at 1000$.
6 months later the value of the BTC rose to 10,000$, I decided to sell my 4 BTC. (40,000$)
During these 6 months Kraken counted 0.01% per hour since the purchase?

According to this "What are the fees for margin trading" it's not per hour it seems it's every 4 hours?
I can't find 0.01% per hour on their page it seems every 4 hours?

How much will that reporter me?

What do you mean by this are you talking about total profit?

[odolvlobo]

The math is straightforward. If you borrow $2000 for 180 days and it costs you 0.01%/4 hours, or 0.06%/day, it will cost you 10.8% or $216. Your profit is $40000 - $4000 - $216, or $35784.

[naleche]

Thank you for your answers,
I think you are all in the right.
Has anyone ever had an experience like this?

On the other hand if I already have bitcoins in my wallet, how does it work?
Let's say I have 7BTC and I buy 2BTC with leverage.

So for stop the fact that I pay taxes because I borrowed it's necessary that sells 2BTC and it's ok?

Sorry if my questions are stupid...

[davis196]

Thank you for your answers,
I think you are all in the right.
Has anyone ever had an experience like this?

On the other hand if I already have bitcoins in my wallet, how does it work?
Let's say I have 7BTC and I buy 2BTC with leverage.

So for stop the fact that I pay taxes because I borrowed it's necessary that sells 2BTC and it's ok?

Sorry if my questions are stupid...

Your questions aren't that stupid,but I don't understand your broken english.Are you using Google Translate?
If I remember correctly,in most countries,interest payments for borrowed money are deducted from your taxable income.I don't know if this applies for leverage trading in a cryptocurrency exchange platform.
Leverage trading simply isn't for newbies traders.Stay away from leverage trading,if you don't have any trading experience at all.

[naleche]

  Yes, unfortunately I use Googl translate.
Anyway we understand each other and thanks for your Help !

[Freddy11]

Buying with leverage is something as greatest luxury, so we need to be extremely careful with how we approach all this to benefit. I find it super comfortable with FreshForex, where they got epic setting that include unlimited leverage, so one can really trade with super level of freedom and gain through.

[ak74]

Novices will die miserably when they play leverage！

[rexxarofmoknathal]

The math is straightforward. If you borrow $2000 for 180 days and it costs you 0.01%/4 hours, or 0.06%/day, it will cost you 10.8% or $216. Your profit is $40000 - $4000 - $216, or $35784.

Exactly, it all depends on the contract and policies that Kraken had in place at the time of the transaction, and what was wavered or not. If the numbers are known, then as above it can be really easy to work out exactly how much profit or loss you encountered!

But tbh I wouldn't buy with leverage in place simply because I usually I'm not in the favour of interest rates 

[adaseb]

The math is straightforward. If you borrow $2000 for 180 days and it costs you 0.01%/4 hours, or 0.06%/day, it will cost you 10.8% or $216. Your profit is $40000 - $4000 - $216, or $35784.

Exactly, it all depends on the contract and policies that Kraken had in place at the time of the transaction, and what was wavered or not. If the numbers are known, then as above it can be really easy to work out exactly how much profit or loss you encountered!

But tbh I wouldn't buy with leverage in place simply because I usually I'm not in the favour of interest rates  

Most people that trade that long for 6 months they either buy it on spot without paying lending fees or they just buy the futures and have a small premium to pay. Nobody does long term trades like that.

Keep in mind that if you trade on futures, and you are going long and your collateral is BTC, then your liquidation is when your average price goes down by half with 1x leverage. Because at 1 BTC at $10000, equals a 100% loss when that BTC is worth $5000 and price is trading at $5000. This is why you need to be careful. This is why btc had that black thursday due to long liquidations. Most bought at $8000.

[maydna]

I would not suggest you use leverage trading if you don't know how to trade or you don't know the basics of trading because you will lose your money in a short time. Leveraged trading will need skills to analyze the price, especially analyzing where the trends will go, so if you don't know about that, I don't think you will make a profit.

Meanwhile, why you don't just buy bitcoin at usual trading in Kraken or Binance so you can make a profit like other traders, beware if you want to chase a big profit, but you don't have skills, then that will be your doom. No one knows what will happen in the next 6 months. Leverage trading is not as simple as that, and you should always check the price and the trend, analyze it, so you know when you should close your trade.

But if you buy bitcoin for 2 bitcoin, and hold it on another wallet, you will not have to worry about the price movements, and of course, you will not have to worry about your leverage trading too.

[tbterryboy]

The fees you are saying which would be charged per hour is applicable for margin trading only. Margin trading means you can borrow 3X more coins than the actual amount of coins you hold onto your wallet. Margin trading and leverage/futures trading have some differentiation.

You can trade with the futures or the contract by buying 4 contracts worth $1000 each and selling them in the near coming future once you feel the price is on the peak. In leverage trading, you would have to bear some risk of the liquidation price. Your position might be liquidated if ever you did not monitor the liquidation price much closely.

[stepwilli]

Most people that trade that long for 6 months they either buy it on spot without paying lending fees or they just buy the futures and have a small premium to pay. Nobody does long term trades like that.

Keep in mind that if you trade on futures, and you are going long and your collateral is BTC, then your liquidation is when your average price goes down by half with 1x leverage. Because at 1 BTC at $10000, equals a 100% loss when that BTC is worth $5000 and price is trading at $5000. This is why you need to be careful. This is why btc had that black thursday due to long liquidations. Most bought at $8000.

I was shocked when I saw almost $120M+ funds getting liquidated on bitmex and binance. Most of the leverage traders would have seen their accounts vanish in few minutes after that instant dump. This is why leverage trading is most riskier. Bitcoins are a high volatile currency. The price for bitcoins might pump as well as dump in a glance of eye and this might make our positions get liquidated on the exchanges.

We can never be sure what would be the outcome of the future price. Your calculations might even work but yet the price might quickly move in the opposite direction(which would liquidate your funds) and then rally onto the positive direction(which would be of no profit for you).