Cryptoballers are mastering the leverage trading platform known as BitSeven. BitSeven affords crypto trading on leverage in Bitcoin, Ethereum, Litecoin and Ripple. Leverage trading is high risk but comes with tremendous opportunities for those that learn to be disciplined in trading. Each cryptocurrency above has varying leverage capabilities. The least maximum is Ripple and the greatest is Bitcoin. Much of this is due to the volatile nature of the currency. BTC can be leveraged to 100x while Ripple can only be leveraged to 30X. Litecoin can be leveraged to 40X and Ethereum to 50X.
BitSeven has its own crypto exchange on the platform so traders can enter into leverage positions once a trader has transferred from their wallets BTC into the platform. BitSeven only accepts BTC and upon doing so a trader can than exchange the BTC for any of the other three currencies on the platform and begin trading.
Each entered trade has what is called a "cut loss". A cut loss is an execution price where the trade will automatically execute if the leverage trade falls (UP ORDER) or climbs (DOWN ORDER) to the levels determined at time of entry.
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For each position, a loss cut value (liquidation price) is automatically calculated and set.
You can calculate the loss cut value using the following formulas:
For UP positions:
Execution price * (100% – (100% – ((fee% + fee%) * leverage + 15%)) / leverage);
For DOWN positions:
Execution price * (100% + (100% – ((fee% + fee%) * leverage + 15%)) / leverage).
The loss cut value cannot be canceled or changed manually but it can be changed by adding an additional same-directional order to an open position.
Let’s look at an example:
There is an open UP BTC position that have been opened at the 9000 price with a volume of 0.5 BTC and with a 50x leverage. The loss cut for this position will be as follows:
9000 * (100% – (100% – ((0.075% (the trading fee for BTC for opening a position) + 0.075% (the trading fee for BTC for closing a position)) * 50x + 15%)) / 50x) = 8860.50.
Suppose the price goes down and you need to move the liquidation price lower. To do this, you need to add another UP order with a lower leverage, since it is necessary to reduce the initial leverage. In each position, the lower the leverage, the further the loss cut price is from the position opening price. The volume of the order that is added also matters. For example, if the volume of a new order is approximately equal or greater than in existing position, then the opening price of the averaged position will change significantly more than in the case of a small volume, and hence, the price of the loss cut will also be recalculated and significantly changed.
Let us return to our example.
For instance, you need to maximize the liquidation price using a new order. To do this, open a limit UP order at 8870 price with 1x leverage and an order volume equal to the position volume which is 0.5 BTC. To calculate the loss cut value, first, you have to calculate a new average leverage and a new average position open price.
In order to do this use the following formula:
Average price = (Execution price 1 * order amount 1 * leverage 1 + Execution price 2 * order amount 2 * leverage 2 + … + Execution price (N) * order amount (N) * leverage (N)) / (Order amount 1 * leverage 1 + Order amount 2 * leverage 2 + … + Order amount (N) * leverage (N))
Average price = (9000 * 0.5 BTC * 50х + 8870 * 0.5 BTC * 1х) / (0.5 BTC * 50х + 0.5 BTC * 1х) = 8997.4510
Average leverage = (Order amount (1) * Leverage (1) + Order amount (2) * Leverage (2) + … + Order amount (n) * Leverage (n)) / (Order amount (1) + Order amount (2 ) + … + Order amount (n)).
Average leverage = (0.5 BTC * 50х + 0.5 BTC * 1х) / (0.5 BTC + 0.5 BTC) = 25.5х
Now we know in advance both the average leverage (25.5x) and the average price of the position (8997.451) even before the orders are placed. Next, you can calculate value of the loss cut in case of averaging the position. You can do this according to the previously given loss cut formula:
For UP positions:
8997.4510 * (100% – (100% – ((0.075% + 0.075%) * 25.5х + 15%)) / 25.5х) = 8711.0321
Thus, we found the price of the loss cut even before we added a new order to the position.
Loss cut without adding a new order for UP position = 8860.50
Loss cut after adding a new order for UP position = 8711.0321
Keep in mind that the risk of liquidation of a position in this case (as can be seen from the example) decreases, but the financial risk increases, since the volume of the entire position become larger. The initial risk was 0.5 BTC, and in the case of averaging in our example, the risk is 1 BTC.
This calculator is highly informative for beginning traders who seek to understand the PNL % from entry to exit in any given leverage trade.
https://blog.bitseven.com/position-calculation/
Learn more regarding leverage trading by following these you tube channels:
The Oracle Disciple:
BitSeven Leverage Trading Beginner Sessions:
https://www.youtube.com/channel/UCVh_MHstZuOI7kjA_ZedkCw
Cryptoballers Mastermind:
https://www.youtube.com/channel/UCzC4TdiXcu6HBsIrnYcUdQw
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