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In the realm of non-margined spot trading on Kraken, you rely on your “balance”. For instance, if you wish to trade USD for BTC on the BTC/USD trading pair, you need to have a USD balance. This means you must have sufficient funds in one currency to exchange for another. After executing a non-margined spot exchange, your corresponding balances remain available for further exchanges or withdrawals. For most non-margined spot exchange orders, the “Simple order” form will suffice.

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Remember that if you have multiple open positions on margin, they will be closed following the First In, First Out (FIFO) rule. Closing a spot position through a closing transaction involves executing an opposing order for a volume equal to the one that opened your position. The proceeds from this transaction first satisfy your margin obligation to Kraken. Selling closes a long spot position, while buying closes a short spot position. Any remaining profit or loss is added to or deducted from your account balance, denominated in the quoted currency of the trading pair you’re using (e.g., EUR in the pair BTC/EUR). However, if your account lacks the necessary funds in the quoted currency to cover potential losses, your account funds may be converted into the required currency, subject to conversion fees.

Risk Management. Managing risk is crucial in margin trading. Margin call warnings to help you avoid significant losses. However, for those eligible, Kraken also offers the option to leverage their trades through margin. Let’s delve into the distinctions between these two approaches. Now, let’s explore how this differs from traditional spot trading. Primarily, Kraken operates as a “spot market” exchange, allowing users to buy and sell currencies instantly. Kraken provides risk management features like margin liquidation.

Now, it’s essential to grasp how leverage functions in spot transactions on Kraken margin trading, as it can significantly impact your trading strategy. Leverage, in this context, serves a dual purpose. As you already know, spot transactions on margin at Kraken allow traders to buy and sell cryptocurrencies using funds that go beyond the balance of their accounts. Maximum Position Size. It determines the maximum amount of margin that Kraken is willing to extend to you for a spot transaction on margin, often referred to as your maximum “position size”. Used Margin. This refers to the portion of your collateral balance held aside when you engage in a spot transaction on margin.