Leverage is one of the most powerful tools in a crypto trader’s arsenal that allows increasing potential profits using borrowed funds. On the MEXC exchange, this tool is especially popular among users trading futures and margin products. However, with great opportunities come great risks. In this article, we will discuss in detail what leverage is, its advantages and dangers, and how to effectively use it on the MEXC platform in 2025.
This article will be useful for both beginners who are just starting to learn margin trading and experienced traders looking to optimize their strategies. We will cover the basics, provide practical examples, and offer a step-by-step guide on using leverage on MEXC, one of the leading crypto exchanges with a wide range of trading tools.
What is Leverage in Cryptocurrency Trading
Leverage is borrowed funds provided by the exchange to a trader to increase the size of their position. Instead of trading with only your own money, you can “multiply” your capital several times. For example, with 10x leverage, your $100 becomes a trading position of $1,000.
How Leverage Works
On MEXC, leverage (up to 200x) is mainly available in the futures trading section. Here’s how it works:
- You deposit initial capital (margin), for example, $100.
- You choose leverage, for example, 20x.
- The exchange adds borrowed funds, and your position becomes $2,000.
- Profit or loss is calculated from the entire amount ($2,000), not just from your margin ($100).
Example: If the price of Bitcoin rises by 5%, your profit from $100 without leverage would be $5. With 20x leverage and a $2,000 position, the profit increases to $100, which is 100% of your initial capital!
Types of Leverage on MEXC
MEXC offers flexible leverage options:
- Spot Trading: Typically no leverage (1x).
- Margin Trading: Up to 10x for some pairs.
- Futures: Up to 200x depending on the asset and market conditions.
Learn more about trading basics in the MEXC learning section.
Advantages of Leverage
Leverage opens up many opportunities for traders, especially in the volatile crypto market. Here are the key advantages.
Increase in Potential Profit
With leverage, you can earn more even with a small capital:
- Without leverage: $100 + 10% growth = $10 profit.
- With 10x leverage: $1000 + 10% growth = $100 profit.
This is particularly relevant for short-term movements that are often seen on crypto exchanges like MEXC.
Access to Large Positions
If you have a limited budget, leverage allows you to trade assets that would otherwise be out of reach. For example, with $500 and 50x leverage, you can open a $25,000 position on BTC/USDT.
Strategy Flexibility
Leverage is suitable for different trading styles:
- Scalping: Quick trades with high leverage.
- Swing Trading: Using leverage to capture medium-term trends.
- Hedging: Opening opposite positions to reduce risks.
Leverage Risks
Despite its attractiveness, leverage is a double-edged sword. Understanding the risks will help you avoid losses.
Increased Losses
Just as leverage amplifies profits, it also amplifies losses:
- Without leverage: $100 – 10% drop = $10 loss.
- With 10x leverage: $1000 – 10% drop = $100 loss (full margin loss).
Liquidation
If the price moves against your position, you may lose your entire margin. At MEXC, this is called liquidation:
- With 20x leverage and $100 margin, the asset price only needs to drop by 5% for a $2000 position to be liquidated.
- The higher the leverage, the less “room” for error.
Cryptomarket Volatility
Cryptocurrencies like Bitcoin or Ethereum are known for sharp price swings. In 2025, volatility remains high, making leveraged trading particularly risky.
Psychological Pressure
Trading with high leverage requires cold calculation. Beginners often succumb to emotions, increasing losses.
How to Use Leverage on MEXC: A Step-by-Step Guide
Now that you understand the pros and cons, let’s break down how to use leverage on MEXC.
Step 1. Registration and Account Funding
- Register on MEXC.
- Complete verification (KYC) to access futures.
- Fund your account through the spot wallet (e.g., USDT).
Step 2. Navigating to Futures
- In the top menu, select “Futures” → “USDT-M Futures”.
- Select a trading pair, for example, BTC/USDT.
Step 3. Leverage Setup
- Click on the leverage setting icon (usually next to the pair).
- Choose the level: from 1x to 200x (often up to 125x for BTC/USDT).
- Confirm the selection.
Tip: Beginners are better off starting with 3x-5x to minimize risks.
Step 4. Opening a position
- Long (Long): Buying with the expectation of a price increase.
- Example: BTC at $60,000, leverage 10x, margin $100. Position: $1000.
- Short (Short): Selling with the expectation of a price decrease.
- Example: Short BTC at $60,000 with the same leverage.
- Specify the margin amount.
- Select the order type (limit, market).
- Click “Buy/Long” or “Sell/Short”.
Step 5. Managing the position
- Monitor the liquidation price (displayed in the interface).
- Use stop-loss to limit losses.
- Close the position manually or set a take-profit.
Step 6. Withdrawing profits
After closing a position, the profit (or remaining margin) is transferred to your futures wallet. From there, you can withdraw funds to a spot or external wallet.
Learn more about futures in the MEXC guide.
Leverage utilization strategies
For beginners: low leverage and stop-losses
- Leverage: 3x-5x.
- Timeframe: 1H-4H.
- Tools: Candlestick analysis + RSI.
- Example: Long BTC/USDT at $58,000 support with 5x leverage and stop-loss at $57,500.
For experienced traders: high leverage scalping
- Leverage: 20x-50x.
- Timeframe: 1M-5M.
- Tools: Levels + MACD.
- Example: Short ETH/USDT at $4,000 resistance with 20x leverage.
Hedging
- Open long and short positions simultaneously on different pairs to reduce risks.
Advantages of leveraged trading on MEXC
High leverage
MEXC offers up to 200x on futures — one of the highest in the industry.
Low commissions
Futures commissions are among the most competitive, which is important when trading with leverage.
User-friendly interface
Intuitive design and mobile app make trading accessible anytime.
Relevance in 2025
With the increasing popularity of futures and new tokens on MEXC, leverage remains a key tool for experienced traders.
Frequently Asked Questions (FAQ)
What leverage should a beginner choose?
Start with 3x-5x to reduce the risk of liquidation.
What is liquidation?
It is the forced closure of a position if losses exceed your margin.
Is it safe to trade with leverage on MEXC?
Yes, if you use risk management and do not exceed a comfortable level of leverage.
Conclusion
Leverage is a tool that can both increase your profits and lead to losses. On MEXC, you have access to flexible leverage settings, low fees, and powerful trading tools. Understanding the risks and benefits, as well as skillful use of leverage, will help you succeed in crypto trading in 2025.
Ready to give it a try? Sign up on MEXC and start trading smart today!
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