TL;DR- go to Derivatives on the top menu, and select either Futures Pro or Futures Lite. Don’t be intimidated by the user interface of KuCoin Pro- it takes about 5 minutes to learn. Follow the below steps using the ‘jump to section’ button above. Leveraged trades can get you wrecked quick- but they can also take you to the moon.
Check out this piece for shorting cryptos specifically on KuCoin, either with leverage or without.
Can you leverage trade on KuCoin?
Absolutely, and KuCoin doesn’t even need you to do the lengthy Know-Your-Customer (KYC) process. This means you can live anywhere in the world and trade on KuCoin. Follow my instructions here to fund your KuCoin account. Without KYC, you’ll be able to trade with up to 5x leverage. With KYC, you’ll be able to trade up to 20x leverage. Remember- the higher the leverage you use, the faster you’ll get liquidated (lose all your money) if things go south.
What is leveraged trading and how does it work?
On ‘buy/long’ trades, leveraged trading means KuCoin ‘spots’ you money on your trade. Let’s say you choose to use 5x leverage and Buy 1 Ethereum- KuCoin would buy 4 more ETH for you. If the price of Ethereum increases, then the profit made on those 4 ETH is awarded to you when you cash out. You would gain 5x the profit you would have without leverage. But if the price of ETH decreases, you lose 5x what you would have without leverage. If the price of ETH were to decrease by 20%, you would lose all your 1 ETH investment. The leveraged trades on KuCoin are perpetual, meaning they don’t have any expiry date like you would with call options in the stock market. This is generally a good thing for traders.
Needless to say, crypto exchanges like KuCoin have a lot of money. Since so many traders screw themselves over with leverage, KuCoin makes money off of this, much the same way casinos make money. You’ve gotta be careful with leverage.
Keep in mind that day trading is very akin to gambling. 90%+ of ‘day traders’ end up losing money. I like trading as much as the next crypto fan, but the key is to be honest with yourself. Are you making informed decisions or are you chasing the dopamine hits that price pumps give you?
Will I owe money if I use leverage and lose on my trade?
No, you won’t owe money. KuCoin will automatically liquidate your position and take your invested money before this happens. When you place a long trade, KuCoin will show you the approximate price the coin has to dip to for you to be liquidated. This doesn’t mean leverage can’t wreck you, though. If you leverage heavily on a long, the crypto only needs to move down a small amount for you to lose everything you put in. Because of this, I wouldn’t recommend using the leverage feature when doing your first dozen or so short trades with KuCoin. If you lose 50%, 75%, or even 90% of your trade, you can always come back from it. If you get wiped out, you’re out of luck!
How to use leverage on KuCoin (Step-by-Step)
Let’s get down to business. Today I’ll be showing you how to short any crypto using KuCoin Futures.
1. You’ll need to be set up with KuCoin and have your KuCoin account funded.
2. The next step will be to fund your KuCoin Futures account. Go to the Assets Overview homepage after logging in to your KuCoin account. In the middle left of the page under the Futures Account square, choose Transfer. Fund your futures account using any of your other accounts.
3. On the top bar of the KuCoin homepage, select the derivatives drop down and select Futures Pro.
4. Across the top of the Futures Pro homepage you’ll see the trading pairs. There are currently 60 or so pairs to choose from- and the list grows every week. The trading pairs are usually large cap cryptos with plenty of volume- so unfortunately you won’t be able to go long heavy on small projects. Click the search icon and begin to type the crypto which you’d like to use leverage on.
5. On the right side of the trading window, enter the number of coins you’d like to short underneath Amount. Underneath Price, enter the price you’d like to buy the coin at. I usually go for whatever the price of the coin is immediately at that moment. To do this, select the last button inside of the price box. After entering this amount, you should see the cost of the trade underneath the red ‘sell/short’ button on the bottom right.
6. Here’s where the leverage part comes in. To leverage your trade, select one of the circles on the Leverage: bar. If you’ve done KYC with KuCoin, this will go up to 20x. If not, it will go up to 5x. Select the amount of leverage you’d like on your trade. Based on this amount, enter the amount of tokens you’d like to buy with your leverage in the Amount box. For example, if I want to spend $10 for a $5 coin with 4x leverage, I would put 8 coins in the Amount box. The cost underneath the Buy/Long button would then show to be $10. Play around with the amounts if you need to to see how it works. Then select Buy/Long.
7. When the pop up window comes into view select Buy. Input your trading password if prompted. If you haven’t set up your trading password just yet follow the steps in my article about it. You’ve just set up your first leveraged trade on KuCoin. Congrats! Now all you need to do is sit there and hope the crypto gods smile on you.
If you do the above steps, your trade should execute within seconds. You’ll see notifications on the top right showing that KuCoin filled your order. Note that KuCoin sometimes breaks up larger orders into smaller chunks. Don’t be alarmed if your request for 100 tokens of Solana results in two buy orders: one for 34 SOL and the other for 66 SOL, for instance. That’s just the exchange finding the right sellers for you to buy from.
If your order doesn’t go through
If your order doesn’t execute within the first minute, it’s most likely because you set your buy price too low. For example, you set a Solana buy order at $202.50, but SOL is trading at $202.65, and doesn’t dip down to $202.50, so the order can’t execute.
To fix this, click market and then last in the box to get the most recent price, and resubmit your order.
My own experience with leverage on KuCoin
I’ve definitely made some mistakes shorting cryptos on KuCoin. Since I think that Shiba Inu is a shitcoin, I’ve done a couple of levered shorts on SHIB and gotten liqudated (lost all my money). The market’s greed and stupidity outweighed my own analysis of the coin being overbought.
If I ever do use leverage now, it’s on longs (buys) and 2x or 3x. The reason why is I like to sleep. I also consider myself an investor and not a gambler, because that narrative makes me feel better about myself. Who needs the truth? Be careful out there with leverage, people.