Hi everyone. I am having trouble understanding how the margin trading on Coinbase works. If I deposited $10,000, Coinbase gives me another $10,000 to use for trading. What I dont understand is how/when I can become liquidated and what happens if I do. For example, if I buy in today at the current Bitcoin price with $20,000 (using my $10,000 and their $10,000) at what point will I become liquidated? How can I prevent this? Where would I have to set my stop loss to prevent this? I can't seem to find any information on this. Thanks!
you will be liquidated when your trade is continuously losing and interest will take all of your principal amount. At Binance they do the same thing, they lend you money to trade and they will take your interest every month. Therefore, you should also consider in borrowing, because trading margin is not easy. According to statistics, more than 95% of traders failed in the first 2 years and lost a lot of money. That's the number in the house's plan and that's why they lend so much money. Be careful and consider carefully, $ 10k is not a small amount of money.
So borrowing is not the same thing as leverage trading? I have the borrow option on Coinbase, but I do not see the option to use leverage.