On the FYBIT platform, a Buy order (Buy UP or Buy DOWN) is designed to open any trade in any direction. A Sell order always closes a trade.
In order to place an Up / Down order and start trading, follow these steps:
- Choose a Market or Limit type of order. All orders can be placed by the market price immediately (Market orders) or with a deferred execution when the desired price is reached (limit orders).
FYBIT trading platform allows you to set pending Limit orders at prices that are significantly better than the current market price. It means that for a BUY UP Limit you need to specify the price, that is lower than the market price. If you try to set a BUY UP Limit order with a price that is above the market price, the order will be executed immediately at the market price.
And vice versa, for a BUY DOWN Limit order you need to use the price that is higher than the market price, otherwise, it will be executed immediately.
- Enter an amount within the available balance in your wallet. The minimum amount is 0.0005 BTC, the maximum is 3 BTC. You can also use all your available balance for trade by clicking at [All] button.
- If you have chosen a Limit order, enter the desired order execution price.
- Enter the Stop Loss price (optional). Stop Loss limits your potential losses by automatically closing a losing position when a specified price is reached.
- Select a leverage size. Different leverage levels from 1x to 100x are available for different crypto-assets.
- Enable the Auto-Sell option if necessary. This option will automatically close your position when the profit level reaches 100%, 200%, or 300% of the open position amount.
- Click on the “Buy order UP” or “Buy order DOWN” button to place an order.
Please note that if you open several orders in the same direction, they will be merged into one position with a common average entry price and average leverage. Orders opened in different directions are not combined.
How to close a position
There are several ways to close a position:
- Use a Sell market order to close a position at the market price. To do this, click on the [SELL] button in the Positions tab against the corresponding position that you want to close.
- By placing a pending order: click on the [Enter value] field in the Sell (Limit) Column and set the price for the limit order. Please note that if you have a UP position open, it is possible to place a SELL Limit order only above the market price. If you try to place a SELL Limit order below the market price, it will be executed immediately at the current market price as a market order. Conversely, if you have a DOWN position open, the SELL limit order must be placed below the market price, otherwise, it will be executed at the market price.
- By setting the Auto-Sell option, which will automatically close the position when the level of 100%, 200%, or 300% of the profit from the position size is reached.
- By setting the Stop Loss option, which will automatically close a losing position when the specified price is reached. Click on the [Enter value] field in the Stop Loss Column and set the price for the Stop Loss order.
Note that on the FYBIT platform, it is only possible to close a position entirely, partial closure is not allowed.
How does leverage work
On the FYBIT platform, the opportunity to use leverage up to 100x is implemented, thanks to this, you can optimize trading and make a profit or loss that is a multiple of the leverage used in a short period of time.
Let’s imagine a situation, a trader has only 0.1 BTC on his balance. However, using 10x leverage, he can increase the value of his position in a trade by 10 times, i.e. with 10x leverage, the user will open a position with a volume of 1 BTC and will receive the difference in price movement from that volume.
In other words, when the price moves 1% in the desired direction with 100x leverage, the trader will receive 100% of the profit from the amount invested in the position, 2% will give 200% of the profit, etc. However, this rule also works in the opposite direction, and you can get a loss as quickly as a profit. Also, keep in mind that the trading fees will also be increased on the size of the leverage and will be applied at the time of closing a position.
The FYBIT trading platform allows you to use leverage up to 100x for all cryptocurrencies used on the platform: Bitcoin (BTC), Ethereum (ETH), Cardano (ADA), Bitcoin Cash (BCH).
Using leverage trading, you can earn more in short-term transactions, because you need less money to open a position. For example, to open a 1 BTC position with 100x leverage, you need to use only 1 BTC / 100 = 0.01 BTC. At the same time, if the price of the cryptocurrency changes by 1% in a profitable direction, you will earn 1% of the entire position of 1 BTC, which is equal to 0.01 BTC.
Please note that the amount of potential losses will also be increased by the amount of leverage. But another advantage of margin trading is that you will not be able to lose more than the amount that was initially used in your account to open a position, that is 0.01 BTC for the above example. The remaining funds in your trading account will not be used to maintain the position.
In other words, when trading using leverage, the maximum risk is always limited by the size of an individual position, and the profit is multiplied by the size of the leverage.
Proper use of leverage can significantly improve your trading results.