🧾Managing Positions

A position represents a trader’s stance or expectation regarding the future price movement of a specific asset through a perpetual futures contract. In essence, it’s a speculative bet or investment based on the anticipated direction of the asset's price.

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🧭 Types of Positions

Perpetual futures trading involves two primary types of positions:

• 📈 Long Position: The trader expects the asset’s price to rise over time. They’re essentially betting on an upward price movement to gain profit.

• 📉 Short Position: The trader anticipates a decline in the asset’s price and aims to profit from a downward move.

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📊 Profit and Loss on Positions

The main goal of opening a position is to earn a profit based on the trader’s price prediction. If the market moves as expected, the trader can close the position and profit from the price difference between entry and exit.

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⚙️ Understanding Leverage

In perpetual futures trading, leverage plays a crucial role — it increases both the potential return and the risk. Leverage allows traders to control a larger position with a relatively smaller amount of capital, amplifying the impact of price changes on their account.

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🔍 How Leverage Works

For example, using 10x leverage means the trader can control a position size ten times greater than their actual balance.

• ✅ Profits increase when the market moves in the trader’s favor

• ❌ Losses grow when the market moves against them

⚠️ Important: Excessive adverse movement may trigger a liquidation, causing the trader to lose their initial margin (collateral).

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⚖️ Risk vs Reward

Leverage involves a delicate balance between potential gain and increased risk. Traders should apply risk management strategies and set leverage levels that align with their risk tolerance and experience.

💡 Leverage is a powerful tool when used wisely — but can be harmful if misused.

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🛠 Practical Tips

✅ Opening a Leveraged Position

Storm Exchange offers a simple and intuitive interface to open a leveraged position.

1. Choose your trade direction:

   • Long — if you expect the price to go up

   • Short — if you expect it to go down

2. Set the following:

   • 💰 Collateral amount

   • 📏 Leverage level

🔢 Formulas:

• Position Notional Value:

$$Position Notional = Collateral * Leverage$$

• Position Size (in base asset):

$$Position Size = Position Notional / Entry Price$$

🧮 Example: Leverage: 10x Collateral: $500 Entry Price: $2000

→ Notional: 500 * 10 = 5000 USDT → Position Size: 5000 / 2000 = 2.5 ETH

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📈 Opening a Position with Orders

By default, positions are opened using market orders, which are executed almost instantly at the current market price. Some slippage may occur due to market impact or execution delay.

Storm Exchange also supports other order types — such as limit orders. Learn more in: 📘 Limit Orders

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🏄 By understanding position structure and leverage mechanics, you can trade more efficiently and with greater control.