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Automated Configuration Leverage Adjustment
Automated Configuration Leverage Adjustment

How we Adjust your Auto-Trading Configuration based on a Specific Trade Leverage

Eyad Tal avatar
Written by Eyad Tal
Updated over a week ago

This automated adjustment is applied to some auto-trading configuration parameters in order to adjust them for futures trading when a futures trade is opened automatically (won't apply for manual trades).

In order to understand this feature, it's important to understand the basic idea of futures trading (with leverage). For example, if we trade with leverage 10X, meaning we are multiplying the possible range of our profit and loss by 10 (every change of 1 in the price of the contract will make us earn or lose 10).

How does leverage affect our auto-trading configuration?

Let's say we set our default stop-loss at 10%, meaning we are willing to risk up to 10% of our investment (potential loss of up to 10%). When the price of the coin or contract reaches 10% below the entry price (for long trades), we will lose 10% of our investment.

When trading with Leverage (10X for example), if the price decreases by 10%, we will lose 100% (10% * 10X), which means that effectively, while trading with leverage 10X and 10% default stop-loss we are potentially risking 100% of our initial investment.

In order to keep an effective stop-loss level when trading with leverage, Cornix will automatically divide your default stop-loss value by the trade's leverage to keep your default stop-loss level effectively as you set it upfront.

Default stop-loss = 10%

Leverage Level = 10X

Adjusted stop-loss = 1% (Default stop-loss/Leverage Level)

Effective stop-loss = 10% (Adjusted stop-loss * Leverage Level)

Automated Configuration Leverage Adjustment applies to the following Trading Configuration parameters:

All trailing parameter adjustments are limited to a cap of 0.2%. The Default Stop-Loss parameter is not limited.

Does not apply to the First Entry Grace parameter and Limit Price Reduction.

Workaround: when you edit a specific trade, after it was open automatically, we take into consideration that you set the trade's parameters while taking into consideration the trade's leverage, therefore after editing a trade manually, we won't adjust the parameters you set and will leave it as you edit it.

*This only applies for automated trades (trades that were opened automatically or by "One Click Follow"), and does not apply for manual trades, and smart bot trades.

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