Bitcoin Forum

I never did forex i dont get how it works. Anybody can explain ?

The profit from trading is based on a small percentage from the sale, not the full amount. For example:

You buy 1 btc for $500, then sell it for $505. This full $505 amount is not all profit, because you bought it for $500. You really only made $5 on the trade, or 1%. You're doing large transactions for small profit, which is the margin.

You can margin Trade BTC and LTC on https://www.bitfinex.com/?refcode=7L2PJM7b4u with 10% off through my ref link.

Basically you lend money automatically through the swap market (3.3:1 Leveraged) and go short or long. You then have opened a margin position, because you dont trade with your own money, but with margined money, your own money serves as collateral in case prices run against your positions. Good Luck Trading!

Margin trading basically means that you can buy more bitcoin with less money then you would if you would pay a full amount at the exchange like bitstamp or others. To buy one BTC at the exchange you would need to commit the whole amount like $530 for example. If a forex broker offers leveraged trading with say 1:3 leverage, it means you need less money to open a position to buy the same amount of bitcoin. 1:3 leverage in this example means that for every $1 you can open a buy order to $3.

okay so i play with lended money. so how do they profit if i loose? i spend 1USD yet they hav to spend 2 exta for me.

also does that mean i can buy unlimited BTC or LTC?

Simply put, if youhave only $1, but you can do more than $1 of something, how much you can do that depends on the exchange give you leverage

If you have 250 and buy 500 worth of coin, that is margin trading.

Any 1% increase in price will give you 2% profit if the leverage is two.

so the exchange give loans. but what if i looe - how do they make cash from hr loan ive wasted

They require you to have collateral, which is higher than the loan amount you get.

If you lose money, you will lose your own money first and the remaining to be pay back to lender.

This is not a 100% true statement. How margin works is that you only pay for some percentage of the full price of the investment. Say for example that BTC is trading at $500 but you only have $200. You could borrow $300, add it to the $200 that you have and buy 1 BTC. If the price were to go up to $510 then you would have a profit of $10 minus your interest costs.

If you were not trading on margin then you would have only purchased .4 BTC for $200 and when the price went to $510, your position would only be worth $204. So your profit (and potential losses) are magnified.

You can only lose your money. When your account shrinks to a certain degree (established by the broker), you will get what is called "margin call" (no pun), which means that you should either deposit more money in the account or to sell off some of your assets. If you don't do this, your positions will be closed by the broker, so that they don't inflict losses upon themselves.

so anybody makes money on that or not really?