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Bitcoin is Weak, Could Slide Below $22.5k as Bears Press On

Bitcoin is Weak, Could Slide Below $22.5k as Bears Press On

Leveraged Bitcoin and Crypto Trading

Trading Bitcoin and other cryptocurrencies with leverage allows you to trade a much larger position size than your deposit amount would allow. And of course, trading larger position sizes returns a higher end profit (or loss!).

For example, if you want to trade 1 lot Bitcoin with no leverage, you will need 1 Bitcoin as margin, which is currently around 22,000 USD. Considering the average retail trader will want to deposit between $500 and $10,000 initially, a 22k margin requirement is simply too high.

This is where leverage comes into play. If you trade with 1:20 leverage, you will need 20 times less than this, so you would only require 1,100 USD. Suddenly the margin requirement becomes much more manageable.

AltumBrokers offers the market’s highest leverage for cryptocurrency trading, which is 1:500. However, this doesn’t mean you can trade 10 Bitcoins with only $440, wishful thinking, right?

Trading Cryptos With High Leverage

Trading such volumes with high leverage on volatile markets like cryptocurrencies would likely spell disaster for traders and wipe out accounts almost instantly (see our article on stop out). This is why AltumBrokers uses a dynamic leverage model.

A dynamic leverage model means that there are restrictions on the volumes that can be traded with the maximum leverage.

The dynamic leverage model used by AltumBrokers allows traders to trade a maximum of 10,000 USD value with 1:500 leverage.

Where the trade volume higher than this, the leverage will be restricted, as per the below table:

Maximum Leverage Per Volume Traded

Tiers
Volume USD
Max Leverage
Margin Requirement %
Tier 1
0 - 10,000
1:500
0.2
Tier 2
10,000 – 50,000
1:200
0.5
Tier 3
50,000 – 100,000
1:100
1
Tier 4
100,000 – 200,000
1:50
2
Tier 5
200,000 – 1,000,000
1:20
5

Margin Requirements Using Dynamic Leverage

Here’s an example of the total margin requirement for 1 lot Bitcoin:

Current BTC price = 22,000 USD.

You can trade 10,000 USD out of the 22,000 with 1:500 leverage (20 USD Margin Requirement)

The next 10,000 USD you can trade with 1:200 leverage. (50 USD Margin Requirement)

The remaining 2,000 USD you can trade with 1:100 leverage. (20 USD Margin Requirement).

This brings the total margin requirement for 1 lot BTC to 90 USD.

This 90 USD would automatically be converted into the base currency of your MT5 trading account as follows:

Margin Requirements for 1 Lot Bitcoin

MT5 Account Base Currency
Trading Price (USD)
Margin Requirement for 1 lot Bitcoin
Bitcoin (BTC)
22,000 USD
0.00409 BTC
Ethereum (ETH)
1,716 USD
0.052 ETH
Tether (USDT)
1
90 USDT
Litecoin (LTC)
62 USD
1.45 LTC
Cardano (ADA)
0.5 USD
180 ADA
BitcoinCash (BCH)
128 USD
0.7 BCH
Ripple (XRP)
0.35 USD
257 XRP

The above example is to illustrate how the dynamic leverage works only; the actual margin requirements will depend on the market price at the moment you open the trade. This article was last updated using September 2022 prices.

The dynamic leverage model is applied to the account as a whole, and not per trade. This means that the accounts total exposed volume is considered when calculating the leverage and margin requirements.

For example, if you have 5 trades open of 1 Bitcoin each, this is considered a total volume of 5 Bitcoin (110,000 USD) and the total requirement margin would be:

10,000 USD @ 1:500 = 20 USD

10,000 USD @ 1: 200 = 50 USD

50,000 USD @ 1:100 = 500 USD

40,000 USD @ 1:50 = 2,000 USD

The remaining 130,000 USD @ 1:20 USD = 800 USD

Total Margin Requirement = 3,370 USD

Since only 3,370 USD is required out of the total 110,000, this would give an overall account leverage of 1:33.

Our Leverage Margin Calculator can easily calculate for you your overall account leverage depending on the volumes you have open.

For more interesting tips and facts visit our Education Centre.

Have questions?

We’re available 24/7 to help you.

You can email us, or send us a message on WhatsApp, Telegram or Messenger!

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Dynamic Leverage Explained

Dynamic Leverage Explained

Leveraged Bitcoin and Crypto Trading

Trading Bitcoin and other cryptocurrencies with leverage allows you to trade a much larger position size than your deposit amount would allow. And of course, trading larger position sizes returns a higher end profit (or loss!).

For example, if you want to trade 1 lot Bitcoin with no leverage, you will need 1 Bitcoin as margin, which is currently around 22,000 USD. Considering the average retail trader will want to deposit between $500 and $10,000 initially, a 22k margin requirement is simply too high.

This is where leverage comes into play. If you trade with 1:20 leverage, you will need 20 times less than this, so you would only require 1,100 USD. Suddenly the margin requirement becomes much more manageable.

AltumBrokers offers the market’s highest leverage for cryptocurrency trading, which is 1:500. However, this doesn’t mean you can trade 10 Bitcoins with only $440, wishful thinking, right?

Trading Cryptos With High Leverage

Trading such volumes with high leverage on volatile markets like cryptocurrencies would likely spell disaster for traders and wipe out accounts almost instantly (see our article on stop out). This is why AltumBrokers uses a dynamic leverage model.

A dynamic leverage model means that there are restrictions on the volumes that can be traded with the maximum leverage.

The dynamic leverage model used by AltumBrokers allows traders to trade a maximum of 10,000 USD value with 1:500 leverage.

Where the trade volume higher than this, the leverage will be restricted, as per the below table:

Maximum Leverage Per Volume Traded

Tiers
Volume USD
Max Leverage
Margin Requirement %
Tier 1
0 - 10,000
1:500
0.2
Tier 2
10,000 – 50,000
1:200
0.5
Tier 3
50,000 – 100,000
1:100
1
Tier 4
100,000 – 200,000
1:50
2
Tier 5
200,000 – 1,000,000
1:20
5

Margin Requirements Using Dynamic Leverage

Here’s an example of the total margin requirement for 1 lot Bitcoin:

Current BTC price = 22,000 USD.

You can trade 10,000 USD out of the 22,000 with 1:500 leverage (20 USD Margin Requirement)

The next 10,000 USD you can trade with 1:200 leverage. (50 USD Margin Requirement)

The remaining 2,000 USD you can trade with 1:100 leverage. (20 USD Margin Requirement).

This brings the total margin requirement for 1 lot BTC to 90 USD.

This 90 USD would automatically be converted into the base currency of your MT5 trading account as follows:

Margin Requirements for 1 Lot Bitcoin

MT5 Account Base Currency
Trading Price (USD)
Margin Requirement for 1 lot Bitcoin
Bitcoin (BTC)
22,000 USD
0.00409 BTC
Ethereum (ETH)
1,716 USD
0.052 ETH
Tether (USDT)
1
90 USDT
Litecoin (LTC)
62 USD
1.45 LTC
Cardano (ADA)
0.5 USD
180 ADA
BitcoinCash (BCH)
128 USD
0.7 BCH
Ripple (XRP)
0.35 USD
257 XRP

The above example is to illustrate how the dynamic leverage works only; the actual margin requirements will depend on the market price at the moment you open the trade. This article was last updated using September 2022 prices.

The dynamic leverage model is applied to the account as a whole, and not per trade. This means that the accounts total exposed volume is considered when calculating the leverage and margin requirements.

For example, if you have 5 trades open of 1 Bitcoin each, this is considered a total volume of 5 Bitcoin (110,000 USD) and the total requirement margin would be:

10,000 USD @ 1:500 = 20 USD

10,000 USD @ 1: 200 = 50 USD

50,000 USD @ 1:100 = 500 USD

40,000 USD @ 1:50 = 2,000 USD

The remaining 130,000 USD @ 1:20 USD = 800 USD

Total Margin Requirement = 3,370 USD

Since only 3,370 USD is required out of the total 110,000, this would give an overall account leverage of 1:33.

Our Leverage Margin Calculator can easily calculate for you your overall account leverage depending on the volumes you have open.

For more interesting tips and facts visit our Education Centre.

Have questions?

We’re available 24/7 to help you.

You can email us, or send us a message on WhatsApp, Telegram or Messenger!

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How to Calculate Crypto Lot Sizes, Margin and Profit

How to Calculate Crypto Lot Sizes, Margin and Profit

When making your manual calculations, there are five trading terms that you must understand. These are: lots, margin requirements, leverage, profit and currency conversions. We will cover all these areas in the below article.

Lot sizes

When trading cryptocurrencies 1 lot is always equal to 1 of the base currency being traded.

The base currency is the first currency in the quote.

For example, when trading BTCUSD, BTC is the base currency.

When trading DSHEUR, DSH is the base currency.

Margin Requirements

Margin is how much you need to open the position.

Margin is always calculated in the base currency of the quote, as follows:

Note, the above table shows full margin requirements, and does not take the account leverage into consideration.

When trading with leverage, the full margin requirement is divided by the leverage amount, as follows:

Minimum Lot sizes

When trading Forex, the minimum lot size is usually 0.01 lots, which is known as a micro lot.

This micro lot has a value of 1,000 of the base currency being traded. For example, 0.01 lots USDCAD is $1000.

Cryptocurrencies however, may have much smaller value than this. For example, a micro lot of ADA would have a value of only 0.01 ADA – which is the equivalent to only $0.0088 – which of course is a much too small amount to trade.

This is the reason that cryptocurrencies, unlike Forex, have different minimum trade sizes – it is to ensure that the trade being placed actually has a substantial value.

You can see all the minimum trade volumes in the below table, and we have also shown you what the equivalent USD value of the minimum trade is:

Profit Calculation

So, as we’ve discussed above, trade size and margin requirements are all done in the base currency of the pair being trading.

Profit, however, is always calculated in the quote (second) currency of the pair being traded.

The trade profit in the quote currency is simply the difference between the opening price and the close price of the trade as follows:

Currency Conversion

Now, if your MT5 trading account currency is different to that of the quote currency, you will need to convert the profit amount into your MT5 currency.

The MT5 platform of course calculates all this for you automatically, however it’s always good to understand how the calculation is being made.

You need to multiply or divide the profit amount by the exchange rate of the quote currency and your MT5 base currency.

Sounds complicated but it’s really very simple!

See the table below for the exact calculations (where ‘/’ means divide by the exchange rate, and ‘X’ means multiply by the exchange rate), depending on your MT5 currency:

Summary

Margin and Profit calculations for crypto currency trading are relatively simple, however they can seem confusing due to the huge differences in value of each crypto.

Stick to our simple rules above and you’ll have no problems at all!

Here’s a quick reminder of the manual calculations we’ve been through:

Have questions?

Check out our Leverage Margin Calculator for easy calculations.

Reach out to our 24/7 Support team and we’ll be happy to help!

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How to Calculate Spreads

How to Calculate Spreads

Lot sizes

A spread is the difference between the ask and the bid price. For example, if the Bitcoin to US dollar is trading with an ask price of 23291.96 and a bid price of 23308.51, then the spread will be the ask minus the bid price.

23308.51 – 23291.96 = $16.55

The spread is is always calculated in the quote (second) currency of the pair being traded.

AltumBrokers calculates the Spread in Points. A point in Cryptocurrency Trading is the last decimal place of the price.

If the Spread of BTCUSD is 1655, the calculated spread will be $16.55

If the Spread of BTCETH is 14,the calculated spread will be 0.00014 ETH

Have questions?

Check out our Leverage Margin Calculator for easy calculations.

Reach out to our 24/7 Support team and we’ll be happy to help!

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Stellar Lumens (XLM) Explained

Stellar Lumens (XLM) Explained

What is Stellar Lumens (XLM)?

Stellar Lumens (XLM) is the native token of the Stellar Network, a high throughput blockchain created by Jed McCaleb—who is also behind Ripple’s XRPL and its solutions. Stellar Lumens might have the same mode of operation as Ripple. However, their codes are different, with Stellar being more decentralized. XLM is released by the Stellar Development Foundation—a non-profit. Their primary objective is to promote financial access for the millions of the unbanked population by keeping transaction costs at a bare minimum while remaining completely decentralized.

Why Trade XLM?

The Stellar Foundation is a non-profit organization whose objective is to bank the majority of the world’s unbanked population. They have, over the years, posted success, partnering with IBM. XLM is also very liquid and listed by many exchanges, including AltumBrokers. Unlike others, AltumBrokers supports high leverage of up to 100X. Furthermore, traders enjoy low fees and zero commissions. All new traders also receive a 100 percent welcome deposit bonus.

Have questions?

We’re available 24/7 to help you.

You can email us, or send us a message on WhatsApp, Telegram or Messenger!

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Monero (XMR) Explained

Monero (XMR) Explained

What is Monero (XMR)?

Monero is one of the first cryptocurrency networks and the first to integrate full anonymity features. It remains open-source and powered by a Proof-of-Work consensus algorithm while leaning on complete decentralization. In Monero, all transactions are opaque as the network can satisfactorily conceal the identities of senders and recipients using techniques such as Ring Signatures and Stealth Addresses.

Why Trade XMR?

The Monero network is the most valuable privacy-centric network. Its primary value proposition stems from the ability of users to send transactions with guarantees of total anonymity in a fully decentralized and secure network. AtumBrokers has, from 2019, supported the trading of XMR and is open to all global users. Traders can open long and short positions while accessing high leverage of up to 100X via the MT5 trading platform.

Have questions?

Check out our Leverage Margin Calculator for easy calculations.

Reach out to our 24/7 Support team and we’ll be happy to help!

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Tezos (XTZ) Explained

Tezos (XTZ) Explained

What is Tezos (XTZ)?

Tezos is a “self-amending” Proof-of-Stake blockchain designed to compete with Ethereum but emphasizes continuity. The idea behind Tezos’ creation is to minimize the probability of hard forks that can damage a network. Holders of XTZ can vote on development proposals by “baking” –staking–their coins and locking them for a period to earn XTZ. Tezos has grown over time and has an active DeFi and NFT ecosystem, striking a valuable partnership with Ubisoft in 2021.

Why Trade XTZ?

Tezos is in the top-50 and a liquid cryptocurrency held by thousands across the globe. With a developing DeFi and NFTs ecosystem attracting high-profile partners, XTZ has become a sought-after coin. XTZ is available for trading in AltumBrokers, paired with the USDT, BTC, and other liquid currencies. Traders can initiate long and short positions through the easy-to-use MT5 trading platform with over 60 trading tools and indicators. All new AltumBrokers traders who sign up to trade XTZ will receive a 100 percent deposit bonus and low fees.

Have questions?

Check out our Leverage Margin Calculator for easy calculations.

Reach out to our 24/7 Support team and we’ll be happy to help!