Minimum Trading Volume for Leverage Trading of Altcoins?

[hinkel11]

Hello,

With regards to leverage trading of altcoins, one often reads about recommendations of not trading altcoins with too low trading volume.

When it comes to leverage trading of altcoins, in your experience, which should be the minimum daily trading volume on a specific exchange to consider a coin as tradable in terms of liquidity and the ability to open and close positions straightforward?

Thank you.

[1715625413]

1715625413

[1715625413]

1715625413

[DaMut]

At our current situation where Eth could go up for 30% in a single day, it is recommended to leverage the altcoin that has at very least 1/5 of its market cap as its trading volume in 24h the more it has the better it will be. because the market is extremely volatile, it could create a huge dump in case Bitcoin price goes down for a few percent. it happened to a few altcoin before when it did not have that much liquidity, the price just jumped down for 60% off its initial price because of panic sell and leverager.

[Tytanowy Janusz]

At our current situation where Eth could go up for 30% in a single day, it is recommended to leverage the altcoin that has at very least 1/5 of its market cap as its trading volume in 24h the more it has the better it will be. because the market is extremely volatile, it could create a huge dump in case Bitcoin price goes down for a few percent. it happened to a few altcoin before when it did not have that much liquidity, the price just jumped down for 60% off its initial price because of panic sell and leverager.

volatility does not always go with low liquidity. Its not the problem for leverage traders that ETH goes up and down 30% in one day if you can open/close 1 milion $ position at close to 0 spread. The problem is when your stop-loss or even worse margin-call closes pushing price few % down because of zero liquidity.

@OP
It depends on leverage, position size, proportion of real trades and fake trades (avoid shady exchanges), volatility. Mostly I would not leverage trade coins below $500M daily volume.

[livingfree]

It's better that a newbie shouldn't try it yet until he or she is prepared to lose some and gain almost nothing. Leverage trading isn't for everyone although it's foreseeable that there's a really a big gain that awaits for someone who will become good at it.

But if you're considering the minimum volume, then it should be more than a million so that you're trading with a good coin pertaining to that standard as you try it.

[nancy]

Leverage trading is really risky and my best advice for newbies is to just hodl their money instead of trading

[DaMut]

volatility does not always go with low liquidity. Its not the problem for leverage traders that ETH goes up and down 30% in one day if you can open/close 1 milion $ position at close to 0 spread. The problem is when your stop-loss or even worse margin-call closes pushing price few % down because of zero liquidity.

@OP
It depends on leverage, position size, proportion of real trades and fake trades (avoid shady exchanges), volatility. Mostly I would not leverage trade coins below $500M daily volume.

volatility always happens on low liquidity coin, name a low liquidity coin that does not have a big gap between buy and sell?
that is exactly what I was talking about liquidity of leveraged altcoin.
without a sufficient liquidity to cover the open leveraged altcoin, it is very easy for user to get liquidated because the price movement will be huge. even with stop loss feature, as long as there is not enough liquidity you will get burned easily.

[Tytanowy Janusz]

volatility always happens on low liquidity coin, name a low liquidity coin that does not have a big gap between buy and sell?

Gap between buy and sell is not called "volatility". Its called spread. There are coins with huge gap and low volatility (for example dead shitcoins), there are coins with huge short term volatility and 0 gap (for example during or right after pump).

Spread is the word you mean here not volatility ... but slippage is even better here - price impact from realizing order.

[ilovealtcoins]

Trading pairs with low volume can be risky because they easily change the exchange rate. I see altcoins in a $ 50 million short trade to be the most vulnerable to volatile markets.
I remember that when Bitcoin drops sharply, these altcoins will drop the fastest. It is recommended that you limit the transaction to low-volume compound currencies to ensure the risk in trading.