Margin trading. Where to start?

[redsun114]

On the one hand, this type of business has many pluses. However, margin trading has another side. Exchanges do not sufficiently disclose the risky side of cryptocurrency trading with leverage. Inexperienced traders, who watched several videos on YouTube, are led to this and give their last money, wishing to double it soon.

The result is quite the opposite, and they lose not only their savings but also get into debt.

Exchanges don’t have to declare the risk before the said trader too would know that trading with margin is a very risky business that people should try and avoid, because there is no way that you would want to trade on leverage and not be greedy and this is where the problem comes from.

The risk in margin trade would have actually been low if people were leveraging low, but like you said, because they have watched some sort of videos that are making it look so interesting leveraging high, they also get involved in it, thereby making them loose their money by not applying some risk management options to it. If people are to trade on margin trade, the highest leverage that anyone should even go should be 2x, 10x is still manageable, but anything going far above this should really be disregarded.

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[d3nz]

Last month, i'm thinking on learning how margin trading works but it will be hard since you need to always check the market every minute since the cryptocurrency is very volatile and unpredictable but i know you can set a stop-loss incase the price goes down.

I know that margin trading is very profitable as long as you know what you're doing and keeping up with the markets flow.

[AicecreaME]

Investing in cryptocurrencies is as risky on its own

Society thinks risk could be avoided if they are going to be aware of it, they carefully collect data and information which they think that could be the key to a successful plan when Trading or engaging in the field of cryptocurrency.  

And I'm not sure about the debt part. How are you supposed to get in debt by margin trading? In the worst case scenario your position gets forcefully liquidated which might potentially lead to a complete loss of balance, though not necessarily as you could just have insufficient collateral to keep your current margin positions open (for example, when price moves against you). Honestly, this is the first time I hear you could get in debt with margin trading (unless you mean something else, of course)

I agree. Maybe they thought that every Trader who use this trading method will not totally deposit a capital on their trading account because there are certain individuals that will lend some money to them as a kick start, but it doesn't work like that. Market Trading is also like the other method of Trading that you will be depositing a certain amount of money that you would use as a capital. You'll start to make leverage with the specific ratio of borrowed funds to the margin.

For example, you'll open a Trade that cost $10,000 and the ratio is 10:1, then you'll have to commit your $1,000 capital.

[doomloop]

Last month, i'm thinking on learning how margin trading works but it will be hard since you need to always check the market every minute since the cryptocurrency is very volatile and unpredictable but i know you can set a stop-loss incase the price goes down.

I know that margin trading is very profitable as long as you know what you're doing and keeping up with the markets flow.

That is true. It takes a lot of work and as the saying goes, big things require big efforts. The more you will put in to a work, the more you are going to get out of it. However, I think for a beginner, it is best to learn more than trading and make himself aware with the behavior of his coin. Once he achieves this milestone, margin trading will not remain a difficult task. The most significant skill after knowledge is patience. That cannot be ignored either.

[South Park]

Margen trading is so tentative if you are a good trader but i suggest you that you use only a margen trading in forex or stock market because crypto is very volatile and its very hard to predict what will gonna happen in the future. This is just my suggestion but in the end you are the one responsible with your actions so think it carefully before doing it.

This is precisely my problem with using margin trading in this market, I understand that those that do this in forex do so because that is an incredibly liquid market and the movements in that market are smaller, but in the market of cryptocurrencies where you see such a huge volatility, why people choose to use margin trading? Bitcoin went from 3500 to almost 14000, that is close to giving 300% in profits in a matter of months, is that not enough for people? Why do they want more?

Because of "Greed" for sure and knowing human beings aren't really contented if they wont able to achieve those high leverage profits.We can compare the risk factor on using up margin between forex and crypto markets.

In forex its already giving me some heart attack even volatility is really small,how much more on crypto where price can swing up 10% a day?
but somehow people are looking after on possible profits that they can generate on that's why they do love to try into this market.

That makes sense, but while greed is pushing them to use marging trading in this market at the same time it seems they do not understand how dangerous it is, there are traders clamming to be using 50x or even 100x of leverage and that means that even the smallest movement in the opposite direction of their prediction can be enough to ruin them and not only that it is likely they will develop bad trading habits in the process that will cost them even more money in the future.

[TheUltraElite]

That makes sense, but while greed is pushing them to use marging trading in this market at the same time it seems they do not understand how dangerous it is, there are traders clamming to be using 50x or even 100x of leverage and that means that even the smallest movement in the opposite direction of their prediction can be enough to ruin them and not only that it is likely they will develop bad trading habits in the process that will cost them even more money in the future.

Its unhealthy which is what my point is. Doing margin trading only increases the mental trauma to any commoner. I dont know if any trader exists who makes money everyday from margin but I doubt they do because most of the top traders are spot traders and not gamblers.

The leverage does attract a lot of greed and that is what fuels the market of margin trading. Because the markets are more in a stagnant phase in the 8000-9000 USD marks people are getting desperate not having a big swing to sell/buy on. So they are moving temporarily to other more risky methods, which I pointed out in another such thread yesterday.

I feel that newbies should stay away from margin unless they learn the basics of spot trading before margin trading.

[deisik]

The leverage does attract a lot of greed and that is what fuels the market of margin trading. Because the markets are more in a stagnant phase in the 8000-9000 USD marks people are getting desperate not having a big swing to sell/buy on. So they are moving temporarily to other more risky methods, which I pointed out in another such thread yesterday

That's not the only option (or rather, a direction)

When prices become stagnant (though I wouldn't call the current market that or even stable), first thing many traders do is narrow their trading ranges and likely increase volumes to squeeze same profits from less price action. This is also risky as the longer market stagnates the stronger it is going to move when it finally starts to move. In this manner, these traders get caught in the action by either suffering losses or losing profits, wherever the market goes

I feel that newbies should stay away from margin unless they learn the basics of spot trading before margin trading

Agree

[AUruHM]

That makes sense, but while greed is pushing them to use marging trading in this market at the same time it seems they do not understand how dangerous it is, there are traders clamming to be using 50x or even 100x of leverage and that means that even the smallest movement in the opposite direction of their prediction can be enough to ruin them and not only that it is likely they will develop bad trading habits in the process that will cost them even more money in the future.

Its unhealthy which is what my point is. Doing margin trading only increases the mental trauma to any commoner. I dont know if any trader exists who makes money everyday from margin but I doubt they do because most of the top traders are spot traders and not gamblers.

The leverage does attract a lot of greed and that is what fuels the market of margin trading. Because the markets are more in a stagnant phase in the 8000-9000 USD marks people are getting desperate not having a big swing to sell/buy on. So they are moving temporarily to other more risky methods, which I pointed out in another such thread yesterday.

I feel that newbies should stay away from margin unless they learn the basics of spot trading before margin trading.

If you can to make a quite exact prediction and have own trade system then why not? For learning and some 'casino' effect, you can use a small part of your funds. An important task to solve is which exchange use. Bitmex has good liquidity but with some technical problems due to p/d. And their funding happens 3 times per day. Now a quite good choice is OKex with his perpetual swap and funding once per day.
With margin you can check own knowledge about price moving 

[BlacksmithCorporation]

I was looking for some ways to increase my profits and eventually decided on margin trading. I am aware of the risks, but the potential gain impresses. What should I consider before going in for margin trading and which exchange offers more favorable conditions for that?

Margin trading is extremely profitable but the risk is similar, I think you should be aware of leverage and capital management. I have just witnessed two new members of my group liquidate their accounts in just one week, because they use leverage up to 50x and use all assets to trade. Their common point is that they are overconfident and involved with the winner's mind.

About the trading platforms, I think you can choose Okex they have margin trading with USDT, very suitable for downtrend. Or you can choose future or perpetual swap with higher leverage.

[joinfree]

Margin trading is no place for a newbie mate because even experienced traders sometimes get caught up in this game of losing your funds to the whales. However, if you feel you've got the balls to venture into margin trading then i suggest you use Binance Exchange as it's one of the popular exchanges with huge investors.

[TrevorS]

Begin your study of margin trading by learning the basics of risk management, as well as conventional trading. Margin trading is an extremely dangerous thing, not only because of the high volatility of the market, but also because the exchanges themselves can technically close orders and put you in a hopeless situation.
This has happened to me several times.

[wxxyrqa]

I understand that under current conditions in the cryptocurrency market, margin trading is very dangerous in itself and if a person does not have sufficient experience or time to trade, it is better to refuse this type of trading.  Nevertheless, I have repeatedly come across information that margin trading is the best choice for professional traders who consider this type of trading to be the main source of income.  I think this already says a lot.
But for beginners or traders with no experience, any loan in the cryptocurrency market is a strong danger.

[Edraket31]

Begin your study of margin trading by learning the basics of risk management, as well as conventional trading. Margin trading is an extremely dangerous thing, not only because of the high volatility of the market, but also because the exchanges themselves can technically close orders and put you in a hopeless situation.
This has happened to me several times.

Yes and good thing that we do have google and youtube that we can learn for free, so there is no reason for us not learn it, if we really want to learn. Then, one thing is focus on one exchange first, I would suggest to go to Binance, and start learning there,  you may refer here for guidelines, https://www.binance.vision/tutorials/binance-margin-trading-guide , aside from this, read some articles too.

[crossabdd]

consideration first is about liquidation. and the second is about interest rates. so that we can make the right calculation for profit and loss. and I only know that good exchanges for margin are Binance.com and Bitmex, because these exchanges are in the top 10 exchanges.

[fullhdpixel]

Margin trading is extremely profitable but the risk is similar, I think you should be aware of leverage and capital management. I have just witnessed two new members of my group liquidate their accounts in just one week, because they use leverage up to 50x and use all assets to trade. Their common point is that they are overconfident and involved with the winner's mind.

About the trading platforms, I think you can choose Okex they have margin trading with USDT, very suitable for downtrend. Or you can choose future or perpetual swap with higher leverage.

They are crazy and greedy, the leveraging itself is not the problem, but the greed of the people applying it is the real issue here, how can someone jump leveraging at 2x which maximum should be 10x and go and leverage at 50x, then they keep blaming margin trade, if they had leverage at 2x every time they trade, would they still not be in business by now rather than the way their account has been liquidated, so their greed is what consumed them.

I am not arguing that margin trade can be risky, but there is always a way to manage every risk. The best way to manage the risk of margin trade is just to leverage low, once you can leverage low, it would be impossible for the money to liquidate easily except if there is a long downtrend for a very long time.

[NeironixNV]

I was looking for some ways to increase my profits and eventually decided on margin trading. I am aware of the risks, but the potential gain impresses. What should I consider before going in for margin trading and which exchange offers more favorable conditions for that?

If you want to trade against the dollar, I like the Bitfinex exchange, the most pleasant trading terminal, there are all the necessary trading orders, stop loss and take profit. If you want to earn bitcons, then you can try trading on Bimex.

[nekonyun]

for beginners you have to practice trading if you directly to margin trading you will get big loss, dont see big profits from margin trading if you cannot trade because other people will easily get your money in margin trading, if the biggest market for margin trading is BITMEX exchange

[beerlover]

for beginners you have to practice trading if you directly to margin trading you will get big loss, dont see big profits from margin trading if you cannot trade because other people will easily get your money in margin trading, if the biggest market for margin trading is BITMEX exchange

Yes, margin trading cannot be a starting point for a trader due to its inconsistent results but traders may switch over into margin trading after hands on experiences in spot trading. This way they may handle all the pressures of margin trading and convert their all of efforts into profits from the small capital. Yes, you may think about margin trading only when you feel like you have relatively small capital to convert your efforts into profits for a given time frame.

Personally I never suggest anyone to get into margin trading as it is a platform for wiping out all our capital when market moves slightly against our expected market direction. Better always sticking with sport trading as it gives enough time to wait and hold our positions on the occurrences of unexpected market directions.

[Sadlife]

Binance has recently increased their margin trading returns from 20%-120%, but i dont know if they've already launched this new rates. I would suggest that to take extreme caution in doing this, because despite its staggering gains that could definitely make you rich in an instant. It could also make you loss everything and this method are for experience traders only.

[jostorres]

Start with Poloniex for first time. Cool graphs, low rate for loans.

I agree with you that if you start with Poloniex for the first time then it should be avoided because it is riskier if you do not need sufficient knowledge in margin trading especially for newcomers. The best exchange trading site for margin trading is Binance.

Choosing a platform for margin trading is the last step but you have to follow a lot of steps before it. You have to start gaining some knowledge about how margin trading works. I have seen a number of people going for margin trading with no previous knowledge just because they can have major profits but you should understand that without knowledge there are none profits.

You have to devote your time in learning more and more about the trade calls. You can never make a mistake by buying at a wrong price in margin trading as the price reversal might make all of your funds get liquidated in just a couple of seconds.