Margin Trading Advanced Guide

How to Open a Margin Trading Account on Fokawa

To open a margin trading account on Fokawa, follow these steps:

Log In: Sign in to your existing Fokawa account. There is no need to create a separate account for margin trading.

Navigate to Margin Trading: Go to the "Margin" section on the Fokawa platform. This can usually be found in the main menu or under the trading section.

Enable Margin Trading:
- Click on the option to enable margin trading.
- You may need to read and agree to the terms and conditions associated with margin trading.

Complete Verification (if required):
- Some platforms may require additional verification steps to ensure you are eligible for margin trading. Follow any prompts to complete these steps.

Fund Your Margin Account:
- Transfer funds from your spot wallet to your margin wallet to start trading.
- Select the amount you want to transfer and confirm the transaction.

Start Trading:
- Once your margin account is funded, you can begin margin trading by selecting the trading pairs and placing your orders.

What are the Risks of Margin Trading?

- Increased Losses: While margin trading can amplify gains, it can also amplify losses, potentially exceeding your initial investment.
- Liquidation Risk: If the market moves against your position, your margin account may be liquidated to cover losses.
- Interest Costs: Borrowed funds incur interest, which can add up over time and affect profitability.
- Market Volatility: High volatility can lead to rapid changes in margin levels and increase the risk of margin calls.

How Do I Calculate Margin Levels and Liquidation Prices?

- Margin Level: The margin level is calculated as (Total Asset Value / Total Borrowed Amount) x 100%.
- Liquidation Price: The price at which your position will be liquidated is determined by the maintenance margin level and the amount of leverage used. The specific formula can vary based on the platform's terms.

What is the Maximum Leverage Available on Fokawa?

- Maximum Leverage: Fokawa offers varying leverage options depending on the cryptocurrency and market conditions. Typically, the maximum leverage can range from 2x to 10x.

How Do I Transfer Funds to My Margin Account?

Log In: Sign in to your Fokawa account.
Navigate to Margin Trading: Go to the "Margin" section.
Transfer Funds:
- Select the option to transfer funds.
- Choose the source wallet (spot wallet) and the destination wallet (margin wallet).
- Enter the amount and confirm the transfer.

How Do I Repay a Margin Loan?

Log In: Sign in to your Fokawa account.
Navigate to Margin Trading: Go to the "Margin" section.
Repay Loan:
- Select the option to repay your loan.
- Choose the cryptocurrency and the amount you wish to repay.
- Confirm the repayment transaction.

What Are Fokawa’s Margin Trading Fees?

- Trading Fees: Fees are applied to each trade executed on margin.
- Interest Fees: Borrowed funds incur interest, which is charged daily or hourly depending on the terms.
- Other Fees: There may be additional fees for transferring funds, maintaining positions, or specific account activities.

How Do I Close a Margin Position?

Log In: Sign in to your Fokawa account.
Navigate to Margin Trading: Go to the "Margin" section.
Close Position:
- Select the position you want to close.
- Choose the option to close the position, either partially or fully.
- Confirm the transaction to execute the closure.

By following these guidelines, you can effectively manage margin trading on Fokawa while understanding the associated risks and procedures.

Updated on: 19/06/2024