 So you might have noticed on yesterday's video that over the weekend we made a trade that returned 70% profits on our money while Bitcoin's price only made a 7% move. So you probably wondered how in the world did he just make 70% profit on a 7% move. Although this may not be new to all of you, I know it's new to a lot of you. This all comes down to leveraging your capital. In this video, we will cover exactly how it is that I trade with leverage and how you can too. Stay tuned. Hey, what's up Jay here and welcome to Bitcoin Daily bringing you guys the best tips, tutorials and trade ideas to help you guys become profitable and successful traders. The goal of this channel is to empower you guys with the resources and knowledge to take you to the next level. So make sure to like, subscribe and hit that notification bell. Share this video as we continue to spread the mass adoption of not only cryptocurrencies but just investing and making money overall. So first of all, let's start this video off with a disclaimer. Trading Bitcoin on its own is already very risky. Remember that 80% of traders who actually trade the markets daily do not make money. So when you add leverage on top of this, it becomes that more dangerous. Make sure that you understand these risks and how to manage them before you risk your own money. I only recommend crypto trading to experienced traders. Nothing here is financial advice. This is just for educational purposes only. All right, now that we got that out the way, let's jump right in. So what is leverage and how does it work? So leverage trading is a powerful tool for traders. It helps investors maximize their returns even on the smallest of changes. It can help you grow your capital exponentially and increase your exposure to the market. But the same way that leverage can work for you, it can work against you. While you stand to gain magnified profits when the market goes your way, you also suffer amplified losses if the trade goes against you. So if you're a consistently winning trader and profitable trader, then leverage will help amplify that and make you a bigger winner. If you're consistently a losing trader who consistently is losing, then leverage is just going to amplify your losses and make you a bigger loser. So this is why I do not recommend beginners to use leverage when they're trading. So when you are trading with leverage, you put a small amount down, but you get to control a much larger position. The small amount is what's referred to as margin or collateral. The amount of leverage that a broker offers depends on the platform itself. Traders use leverage depending on their skill level, investing goals and their appetite for risk. In most cases, it's professional traders who tend to use leverage more aggressively while everyone else is usually recommended to use it very cautiously. So let's dig a little deeper. What is leverage trading? Sometimes referred to as margin trading, leverage trading involves borrowing funds to amplify potential returns when buying and selling cryptocurrency or any other asset, for that matter. When you leverage trade, you can access increased buying power and may open positions that are much larger than your actual account balance. For example, if you have an account balance of five Bitcoin and you want to place a trade with leverage of 10 to one, you can open a position worth 50 Bitcoin. This means that if the market moves in your favor, you'll be able to access 10 times the profits. However, it also has the same effect of magnifying losses when the market moves against you. Margin trading is risky, speculative and complicated. So it's not suited to beginners and is best left to experience traders. So how exactly does it work? When you open a position, a portion of your account balance is held as collateral for the funds you borrow from the exchange. If your trade is successful and you close the position at a profit, your collateral is returned to you along with those profits minus any fees. However, if the market moves against you and you're in a loss, your trade will automatically be closed and your collateral liquidated when the market reaches a certain price. This is known as a liquidation price. All right, so we're going to go over an example of going long with 10X leverage. Note why your profit can exceed 100% losses are limited to 100% of the margin requirement. So in this scenario, the entry price is $11,670. The margin, so the money that you're putting up is $1,167. So because we're using the 10X leverage, we have access to 10 times what our margin is. And then the long liquidation price is $10,503. So what does that mean? That means if your entry goes all the way down to $10,503, you are automatically out of the trade, right? So you've lost your $1,167 and it's gone. So that's why anytime you're trading, especially with leverage, you want to use stop losses. You want to manage your risk. It is vital to your profitability. It is vital to your success and it's vital to your education. So if your entry was $11,670 and you have an increase of 5% on the price, right? So if it increases from $11,670 up to $12,254, you just made a 50% return, right? Because you're using 10X on a 5% move, that's 5 times 10 equals 50%, right? So a 50% return on your margin funds is $584, okay? Hopefully that makes sense. Let's do it at 10%, right? So if you enter $11,670 and the price jumps up to $12,837, that is a 10% move, right? Now because we're using 10X leverage, it's 10 times 10X leverage equals 100%, right? So on this move, because it went up 10% and because you had 10X leverage, you just made 100% profit on your money, which was what's margins, right? So you made exactly what you were risking, which is $1,167. But now the thing is, it works both ways. So if you lose 5%, you're really losing 50% of your money. If the price moves down 10%, you lose 100% of your money and that's when it's gone. That's it. So at that 100% mark, you're liquidated. Your position is automatically closed. But when you're in profit, you can go beyond that price, that 100% mark. So the platform that I currently use to trade with leverage is Bybit. If you guys look here on the screen, you can see that they're currently giving away $620 in bonuses. The bonus depends on the deposit that you make. So if you make 0.01 BTC, you get 15 and it goes up to $1.5 BTC deposit. You get up to $500 in bonuses. So you get the $500 plus you'll get a $20 coupon and you can get over $100 in bonuses in the rewards club, which all equals to $620. Make sure to use this code jackpot. Make sure to click the link in our description and I'm also going to pin it in the comments for you guys. So now let's go ahead and look at a real time scenario. So we're going to look at this position. So this is one of the long term positions that I entered on one of my example accounts. Basically when there was a dip to 30, I had an order automatically set around 30,500 ish around there, something like that. And that ended up triggering. And if you look, I actually have an active order here at 30,000. So I think I had orders down to 30,000 and these triggered automatically. So I had another one here. So what I did is I set basically 5,000 each order, right? So 5,000 if I'm using in this particular scenario, I'm using 10x leverage. So for 5,000, that means I'm risking for $500, 500 times 10 is 5,000. So for each order, I was risking $500. So I ended up, two of my entries ended up hitting here. And so I'm basically risking 10,000, it ends up being $1,117 that I currently have margin. So why is it more than the 10,000? So 10,000 would be 1,000, right? But because the value of Bitcoin has gone up 10%, I gained 10% on my money, which was $1,000. I gained 10% because of the value of Bitcoin itself going up, right? So that gives me, I made basically 100 bucks here, right? And then I made the profits times 10, right? So Bitcoin moved 10%. In this case, it's a little bit less right now. But let's just say 10% to keep the math simple with the 10% move on Bitcoin times the 10x leverage that I had in this position. As you guys can see, it shows it right here, 10x leverage, that equals to 1,000, whatever the number is right now, it's going crazy right now, it's going up and down. So it's going to be, but let's just say 1,050, 1,100, whatever it may be. So that's why the math works out like that. As you guys can see, my liquidation price is at 29,917, but remember that I set up an order at 30. So what happens if the price were to go down to that point, my order at 30,000 would trigger and would push this liquidation price down. Now, this is called, this is a different type of strategy. This is called dollar cost averaging. And basically, I'm trying to dollar cost average on this account on these dips, right? So I'm just using this account just to do these dips and then to make a few thousand on the way back up and I'll close the trade and then I'll do it again. So now let's look at the same example, but now this is Ethereum, right? So on Ethereum, I basically did the same thing, except I have 5x leverage on this position instead of the 10x leverage. So my liquidation price you can see is all the way down to $7,885. So that's very, very far away. My entry price is $926. So I bought during that dip. So you can see I have 10,000 open with 5x leverage. That means that my risk money is $2,000. So it shows that here where it says position margin, right? Now it shows more than $2,000 because remember, the $2,000 that I risked was at $926. The price is currently now at $13,82. So the value of that position has gone up, which is now is worth $2,836. And then here you can see in the unrealized P&L, right? So you guys can see here that my percentage is 173% in profit, right? Which is equal to about three and a half Ethereum's or about $5,000, right? How the hell am I up 173% profit on a basically like a 35% move, right? So because Ethereum has gone up 35% since the time I entered the trade, then you grab that 35 and you multiply it times 5, which is the amount of leverage that I'm using on this position. And that's how you come up with 173% profit. That's pretty much it guys. Just wanted to touch on the basics and try to keep everything as simple as possible for you guys. Hopefully I was able to get that point across in the simplest way possible. If you guys enjoyed this video, man, go ahead and hit that subscribe button. Make sure to hit the like on this video and share it with your friends and family. You guys have been killing it lately. We finally, finally hit the point where we could apply for monetization with YouTube. So I want to thank you guys. I appreciate you guys more than you know. I love you guys and I love this community. As you guys can see, I'm trying to make videos based on the type of stuff you guys want to see. So if you guys have anything that you want me to make, go ahead and drop a comment with that and I'll make sure to add it to my list of topics. I will see you guys tomorrow as always. Peace and love.