A beginner's guide to buying power
Buying power is one of the most useful tools available to traders. It lets you trade larger positions than your deposit. This guide explains what leverage is, how buying power works on Cronos App, and how to manage the risks that come with it.
01 The basics
What is buying power?
Buying power is the total value of trades you can make with your account.
If you deposit $100 and use 10x leverage, your buying power is $1,000. Profits and losses are calculated on the full $1,000, not just your $100.
On Cronos App, the default is always 1x. You trade only what you deposit unless you choose to increase your buying power.
Leverage increases your potential gains. It increases your potential losses by the same amount.
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What is buying power?
Buying power is the total value of trades you can open with your account. Learn how it works and how to use it responsibly.
How to manage risk in trading
Risk management is how you control your losses. Learn position sizing, stop-losses, and the rules that keep traders in the market.
02 How much to use
How much buying power should you use?
The right amount depends on your experience level and risk tolerance.
For first-time traders, 1x or 2x is a sensible starting point. Lower buying power gives you more room to recover if a trade goes against you.
As you get more comfortable, you can increase gradually. There is no benefit to maxing out your buying power early.
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03 Managing risk
How to manage risk
Buying power amplifies both gains and losses. Risk management is how you control the downside.
Set a maximum loss per trade
Decide how much you are willing to lose before you enter a trade.
Use stop-losses
A stop-loss closes your position automatically if the price falls to a set level.
Keep buying power low when starting out
High leverage magnifies mistakes as much as it magnifies wins.
Review your open positions regularly
Know how each position is performing, know your exit level, and do not leave leveraged positions unmonitored.
Set your exit before you enter
A stop-loss closes your trade automatically if the price drops to a level you set.
Lock in gains automatically
A take-profit order closes your position when the price hits a target you choose.
You stay in control
Your dashboard shows every open position and your current profit or loss in real time.
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FAQ
How does trading leverage work?
Leverage lets you control a position larger than your deposit. Deposit $100 with 10x leverage and your trade has $1,000 in market exposure.
What leverage is good for $100?
Lower is safer when starting out. At 1x, $100 controls $100 in exposure. At 10x, it controls $1,000.
What does 20x leverage mean in trading?
A $100 deposit controls a $2,000 position. Cronos App offers up to 10x buying power on select assets.
Is leverage trading a good idea?
It depends on your experience and risk tolerance. Start at 1x and only increase when you are confident in your risk management.
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