how to trade
this tutorial will walk you through how to open a trade on handle.fi while providing you with an understanding of the features. if you haven't already connected your wallet to handle.fi use this guide.
set up a SHORT fxAUD/ USD trade
- 1.once you've decided which market you want to open a leveraged position in select it from the dropdown on the order desk.
- 2.now that you've selected your market you must decide which direction you want to trade: long (buy) or short (sell).
- 3.after completing that you now have to set your parameters for the trade:
- 1.position size: refers to the number of contracts that you are trading. it is important to determine your position size before you start trading because it will affect your risk and reward. note: the liquidity in the top right is the maximum amount of iquidity available.
- 2.leverage: is the use of borrowed funds to increase the size of a trade which multiplies the volatility.
- 3.collateral: the total risk you are taking on in the case your position is liquidated. your collateral is = position size / leverage and is automatically calculated. example: if you choose to take a $10,000 position with 20x leverage then you would be required to put up $500 collateral. when you put up collateral you can choose from a range of assets which you can select from the dropdown list.
- 4.before placing the trade make sure to understand all the details surrounding your trade:
- 1.entry price: is the current price of the asset at that time.
- 2.mark price: is the current estimated fair value of a perpetual futures contract. this can differ from the entry price for a number of reasons such as the market volatility or borrow rate.
- 3.liquidation price: this is the price where your collateral amount would be nearly equal to your trade losses. your trade is closed whenever you collateral - losses - borrow fee is less than 1% of your position size. after deducting losses and fees any remaining collateral will be returned to your account. for more info on liquidation parameters see here.
- 5.borrow rate: the fee charged by the protocol for lending the underlying asset to leveraged traders. the rate is based on the token utilisation rate and is paid to the counterparty (hLP). the borrow rate is changing constantly as a result of traders stepping in and out of the market. keep in mind this fee is charged every hour so be aware of the current rate.
- 6.upon proceeding with pressing buy/ sell @ market you will reach a confirmation pop up. after confirming your trade details are correct confirm the transaction and your trade will be placed.
after opening a trade, the positions tab will display your trade and provide some options on how you can manage your trade from here.
- share your trade: handle.fi allow you to share your trade on social media by selecting this option. it will create an image highlighting your achievements:
- edit position: this will allow you to adjust the parameters of your trade by adjusting the position leverage. your leverage is adjusted by either depositing or withdrawing more collateral. depositing more collateral decreases the leverage on your position while withdrawing more collateral increases the leverage on your position. the window will display the details of a suggested leverage change and the effects it has on collateral and your liquidation price.
- close position: you can fully or partially close a trade by selecting the close option. there are a few selections to be made after making the decision to close:
- 1.close amount: if you would like to close the entire trade then select max in order to complete this. if you prefer a partial close then enter the amount you wish to close.
- 2.leverage box: if you are making a partial close then there is an option to maintain your existing leverage ratio. by checking this option you are closing your position as well as withdrawing the corresponding amount of collateral.