Recently, taking into account the downtrend of the crypto-currency market, margin trading has become popular. What is the first thing you should pay attention to in this area? What materials should be studied before starting?
Before margin trading, a trader should clearly understand how to calculate margin and know the difference between the required margin and available margin before entering a position. The reason for this is that it’s generally not recommended to open a position while utilizing maximum available leverage, otherwise, the trade is a risk of being stopped out prematurely if the market moves in the opposite direction.
I margin trade with PrimeXBT which has an inbuilt exposure limit which is set by the risk management to help protect both you and the platform itself from loss. But even so, you should always leave yourself with a buffer in case you wish to modify your position.
As well, anyone who intends to trade with high leverage on margin needs to be fully aware of the increased risk and understand market trends. This isn’t to say don’t do it, rather, be prepared with a clear exit strategy in case things go wrong - setting a predetermined stop-loss and never invest more than you can afford to lose (
as always).