When you anticipate a rise in an asset’s market price, you can profit by taking a long position through margin trading.
The principle of a long position in margin trading involves borrowing funds to purchase assets at a low price, then selling them at a higher price after the market rises, repaying the loan and retaining the price difference.
Example of a Long Position in Margin Trading
Suppose the current market price of BTC is 10,000 USDT, and you expect it to increase. You can use margin trading to buy BTC now and sell it later at a higher price to repay the loan.
Steps:
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1. Transfer Funds As Margin
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Log in to your LBank account. Click [Wallet] and select [Margin Account].
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Click [Transfer] and transfer 10,000 USDT from your spot wallet to your margin account as margin.
2. Use Margin to Buy BTC
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After logging into the account, click [Trade] - [Spot] - [Spot_leverage]，and choose the trading pair.
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Navigate to the Trading Page, click [Margin]-[Buy], select [Cross], [Limit] and switch to [Auto Borrow].
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Enter order details: [Price] [Amount]
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Click [Buy BTC] to place the order.
Conditions:
💡The system automatically borrows 20,000 USDT to purchase 2 BTC at 10,000 USDT each. Combined with your original 10,000 USDT margin, your total position is 30,000 USDT. Your long margin position is established.
3. Close the Position and Secure profit
Assume BTC rises to 12,000 USDT two weeks later, as predicted. You can sell at this price and repay the borrowed funds.
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Go to the [Sell] Page, select [Limit], and switch to [Auto Repay].
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Enter order details: sell 3 BTC at 12,000 USDT each.
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Submit the order.
Once filled, the system automatically uses the proceeds to repay the borrowed 20,000 USDT.
Calculation
Excluding fees and interest for simplicity：
💡Ignoring fees and interest, your net profit would be 6,000 USDT, resulting in a 60% ROI.
How to Manage Risk When Going Long with Margin?
In a long margin trade, a rising market allows you to profit by buying low and selling high.However, if the market falls, your margin level (ML) may drop, potentially triggering liquidation.
To mitigate this, you can use an OCO order (One-Cancels-the-Other) to set simultaneous take-profit and stop-loss orders for effective risk control.
Example of Risk Management
Assume you go long on BTC, but the price falls instead of rising. While you remain optimistic about a rebound, you're worried that further declines triggering liquidation, an OCO order can help by setting both stop-loss and take-profit levels:
1. Set a Potential Take-profit Price
If you assume BTC reaching 11,000 USDT is an ideal exit point, set the [Price] to 11,000 USDT to lock in profit if the market rises.
2. Set an Acceptable Stop-loss Price
If BTC falls and you’re willing to accept a loss at 9,905 USDT, with a minimum acceptable closing price of 9,900 USDT:
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[Trigger Price] 9,905 USDT
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[Limit Price] 9,900 USDT
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[Amount] 3 BTC
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Click [Sell BTC] to place the order.
3. System Automatically Determines and Executes
Once the order is placed, the system monitors market trends and executes either the take-profit or stop-loss order, canceling the other. This ensures timely exits during price fluctuations, securing profits or limiting losses.
By leveraging LBank’s margin trading for long positions during an upward market trend, you can maximize profits. Using OCO order (One-Cancels-the-Other) for risk control enables automatic execution of take-profit or stop-loss actions, helping you optimize gains while minimizing risks.
Risk Disclosure
Margin trading involves significant risks and may result in partial or complete loss of funds, making it unsuitable for all investors. Market fluctuations, strategy failures, or technical issues may adversely affect trading results. Past performance is not indicative of future outcomes. Please carefully evaluate your risk tolerance and consider seeking advice from a professional financial advisor. LBank bears no liability for losses incurred from margin trading.
Still Need Help?
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⚠️ In case of any discrepancies in translation, the English version shall prevail.