As you’ve probably noticed from my recent posts, the cryptocurrency exchange that I prefer using of late is MXC.co.
There are three primary reasons for that:
- Lack of KYC (You can withdraw up to 5 BTC per day, which is more than enough for me). For higher withdrawals, you would have to go through a KYC procedure.
- LOTS of altcoins you can trade on margin
- Futures support and plenty of cryptocurrencies in their spot exchange.
Also, the exchange is relatively seasoned since it was established back in 2018 and, to my knowledge, there haven’t been any security breaches or hacking attempts.
On the flipside, exchanges like Binance provide a more user-friendly interface and higher liquidity.
In any case, here’s everything you need to know about trading with margin on MXC.co.
Opening an Account
To open an account, you can visit MXC.co.
Yes, this is my referral link. It would mean the world to me if you use it as I’d earn a small commission on your trading fees. This helps me keep this profile going and it motivates me to create more awesome content for you guys!.
As I mentioned, there’s no KYC required so all you’d have to do is provide a valid email address. Make sure that’s an existing email because you will need it to confirm withdrawals. This is also where you will receive anti-phishing codes and get notifications about each login.
Once you have your account set up, it’s HIGHLY recommended to complete your Two-Factor Authentication (2FA) settings. I personally use Google Authenticator for this. You can download the app iOS and Android.
The next thing you’d need to do is to deposit some funds.
How to Deposit and Withdraw
If you have any kind of experience with cryptocurrency exchanges, then everything here will be familiar.
To deposit, you’d have to click on the “My Assets” button located at the top right corner.
This will take you to a new page where you can select the cryptocurrency you’d like to deposit and provide you with your address and a QR code. You can use whatever you find more fitting.
As you can see here, I’ve just deposited about $37 worth of USDT. You can see the transactions on the right, making things very easy to monitor.
The withdrawal process is pretty much the same, but you will have to use your 2FA for verifying it, making things a lot more secure.
How to Trade With Margin
Now that we have all of the formalities out of the way, let’s get to the fun part - trading with margin.
I’d like to add a disclaimer here. While the multipliers are not as high as the ones in the futures contracts, when you trade on a 5x margin, the risk of losing capital is 5x greater. Please, approach this with caution and make sure to trade using funds that you can afford to lose.
On the top navigation menu, you can see the “Margin” section and as you hover your mouse over it, you’d be able to choose between the Standard and Professional user interface. I personally prefer the standard one.
This is how it looks like:
Now, on the left side, we have the order books, in the middle there’s the trading chart, right below it we have our order placement, and on the right side you have the selection of cryptocurrencies you can trade on margin.
*Note that each trading pair has a specific box next to it which indicates the margin you are allowed to borrow. (I’ll explain how the borrowing works down below).
For this guide, we’ll work with the BTC/USDT trading pair.
Margin trading means that you will trade with more funds than you actually have. For this, the exchange will “lend” you some cash, while in return you will be paying an hourly interest rate. With MXC.co, this rate is set to 0.004166% on the amount you’ve borrowed.
Let’s see how it works. As we said before, we deposited about 37 USDT into our account and now we’d like to borrow some more to open a larger BTC/USDT position.
Above the sell orders on the main menu, you will see three buttons - “Asset Transfer”, “Apply to Borrow” and “Apply to Repay”.
First, you will have to transfer your USDT into your margin account - click on Asset Transfer.
Here, all you need to do is determine the amount you want to work with and transfer it. I will transfer all my USDT.
Once you do this, you will have the amount in your BTC/USDT Margin account. Note that each trading pair represents a separate margin account. So now you only have this money in the BTC/USDT Margin account but not in the ETH/USDT Margin account, for example. To have it, you’d have to transfer funds from your main account again.
Once we have the cash in the margin account, it’s time to borrow - click on “Apply to Borrow”.
As you can see, I can borrow 331.74 USDT with my balance, and that’s what I’ll do. Now, my available balance has increased with that sum and I can open the corresponding position.
How to Open a Trade
That’s also very easy.
The sliders below the amount are very convenient because it makes it easier to open a position relative to your current holdings. For this guide, however, I’m opening it with 100% of my USDT.
All you have to do is specify the price that you want to buy at and the amount you want to buy in the respective fields and click “Buy(Long) BTC.”
Once you have your BTC bought, on the right, you can monitor some of the metrics.
Now, here, we can see that I now own 0.0404 BTC, which is obviously a very very risky trade, because I only used $37 of my own money, yet my position is worth more than ten times that.
This is where the Liquidation price comes into play.
So, exchanges won’t expose themselves to the risk of you having to owe them money. This also means that you won’t put yourself in a position where you will actually owe someone actual cash.
As long as BTC’s price drops to this number ($8620.05), my position will be automatically closed and I would have lost my money.
Let me explain how this works in very very simple terms.
If you have $10 and you buy 1 apple worth $10, in order to lose your money, the apple’s price will have to drop to $0.
However, if you have $10 and someone gives you $10 more and you buy 2 apples, the apple’s price would have to drop by 50% and reach $10 for you to lose your $10.
That’s pretty much what this is all about. The higher the amount you borrow, the less the price needs to drop for you to get liquidated. That’s it.
Now, in order to close your position, all you have to do is open a sell order for the full amount of your original position.
How to Repay Your Margin
Once you have your position closed or you have deposited additional money to repay your borrowed money, all you have to do is click on “Apply to Repay.”
Here, the system automatically calculates the amount of interest that you have to pay based on how long you’ve kept the money. In our case, the interest is a little over $0.013. If I kept it for 10 hours, I’d essentially have to pay $0.1 worth of interest, meaning that I can keep this position open for about 10 days and pay an interest of around $3.
How to Track Your Assets
As I said, each trading pair represents a separate account, so this is where it might get a bit confusing. However, when you go to your Assets page and scroll down below, you will find all the account types, making it very easy to track all of your accounts.
Well, guys, that’s pretty much everything there is to know about trading with margin on MXC.co. As you can see, it’s no rocket science.
Once again, be very very careful when you use margin because you’re risk factor increases significantly.
You can register for an account at MXC.co by clicking this link or the image below.
As always, if you enjoyed the content, please smash the like button and follow me for more helpful information! I hope you guys enjoyed reading this and that it helped you if you needed help.
Disclaimer: None of the above content is financial advice. The information hereby provided is for educational purposes only. Do your own research before investing in cryptocurrency. Trading cryptocurrency, especially with leverage, comes with a serious risk of capital loss. Be careful! Never trade with money that you can’t afford to lose!
P.S.: For my next guide, I’ll be showing you guys how to trade Futures contracts on MXC.co.