Buying power is how much you can trade with your account. On some platforms, it equals your deposit. On others, the platform extends your buying power beyond what you put in. This guide explains how it works.
What is the meaning of buying power?
What is the meaning of buying power?
Buying power is the total value of positions you can open at any given time. It determines the maximum size of your trades.
If your account holds $100 and your buying power is $100, you trade only what you deposited. That is 1x buying power.
Some platforms offer multiplied buying power. If you have $100 and your buying power is $200, you are trading with 2x. The extra $100 is provided by the platform. This is leverage.
On Cronos App, you can set your buying power multiplier. You control how much amplification you apply to your trades.
How to manage risk in trading
Learn position sizing, stop-losses, and rules that protect your account.
How does buying power affect your trades?
How does buying power affect your trades?
Higher buying power means you can open larger positions with the same deposit. A 10% price move on a $200 position is a $20 gain or loss.
At 1x, on a $100 position, the same 10% move is only $10. The multiplier scales the outcome up or down proportionally.
This works in both directions. Higher buying power amplifies gains and losses equally. A 10% adverse move at 2x results in a 20% loss on your deposit.
Most platforms cap losses at your deposit. You will not owe more than what you put in. But a leveraged position can still lose its full value quickly.
How do you increase your buying power?
How do you increase your buying power?
On Cronos App, you adjust your buying power by changing your multiplier. The choice is yours.
A higher multiplier is not always better. It increases potential gains and potential losses by the same amount.
New traders are better off starting at 1x. Trade only what you deposit until you have a clear sense of how assets move. Increase only when you are confident.
Do not raise your multiplier after a losing trade. Using higher buying power to recover losses quickly is one of the fastest ways to deplete a trading account.
Continue lendo
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