You may have already learned about margin trading and how it uses borrowed funds from exchanges (like Huobi Global) as leverage to provide traders with new, profitable trading strategies. If so, you’d also be aware of the significant risk that comes with margin trading.
This lesson is perfect for you if you already understand the risks associated with margin trading but are unsure how to use the exchange interface to open and close trades.
Read the following lessons for more beginner trading knowledge:
Opening margin trading positions
Keep this basic idea in mind – if you expect the price of a token to increase, buy long. And if you expect the price to decrease, sell short. So let’s go through the process of how to buy and sell in margin trading on Huobi Global:
1. Go to the Huobi Global main page, then mouse over ‘Spot Trading and choose ‘Margin’.
2. Choose either cross margin or isolated margin contracts. Not sure what the difference is? Read this lesson before proceeding.
3. Choose the trading pair you want to long or short – use the search function or browse the different pairs by clicking on USDT, HUSD or BTC. For this example, we’ll use a BTC/USDT trading pair in cross margin trading.
4. Transfer balances from your other accounts if you don’t have enough. To do so, click ‘Transfer’ and follow the steps.
5. Now that you’ve deposited the initial collateral, you can borrow against it. You can click on ‘loan’ and borrow the margin amount you need. All cross margin contracts allow a maximum margin ratio of 3:1, which is indicated by the 3x logo. For example, if your account’s available amount is 101 USDT, the maximum margin amount would 202 USDT, which will give you a total of 303 USDT.
6. Once you have the desired amount, you can use different orders to buy long and sell short. You can use the same logic you would use in spot trading.
7. Alternatively, use the ‘Automatic loan’ function that lets you buy and sell directly using the available maximum that your accounts’ available amount and your chosen trading pair allow.
8. Make sure to keep an eye on the risk rate. When it reaches ≤110%, the exchange will force your account into liquidation in order to repay the interest and borrowed tokens.
New to Huobi? Register for a Huobi account and receive up to $300 as a ‘Welcome Bonus’ to help you start your investment journey! If you’re an existing user, check out Huobi Earn, where you can start earning interest from your idle cryptocurrencies!