3 Top Tips to Stay Safe While Margin Trading Crypto

[cheezcarls]

The benefits of cryptocurrency margin trading are numerous. By allowing for incredible profitability and the ability to trade on the short side, margin exchanges have become popular with cryptocurrency traders of all experience levels.

However, although margin trading has the potential to generate spectacular profits without requiring much starting-capital, it is also possible to suffer significant losses if traders lack adequate caution when selecting and executing trades.

Read the top 3 tips here

I have a question to all of the traders here, especially when it comes to crypto margin trading. Do you think these three tips about staying safe while doing margin trading crypto would be effective?

Despite that you can say it's the safest way in trading cryptocurrencies, there's no such guarantee that it would be really "safe" as the market is so unpredictable that it would go down anytime without warning.

Just like what is happening to Bitcoin and other cryptocurrencies now, the prices are going down and it may expect to go even deeper as much as $7,400. Now it's hanging on around $7,600+.

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[South Park]

I have a question to all of the traders here, especially when it comes to crypto margin trading. Do you think these three tips about staying safe while doing margin trading crypto would be effective?

Despite that you can say it's the safest way in trading cryptocurrencies, there's no such guarantee that it would be really "safe" as the market is so unpredictable that it would go down anytime without warning.

Just like what is happening to Bitcoin and other cryptocurrencies now, the prices are going down and it may expect to go even deeper as much as $7,400. Now it's hanging on around $7,600+.

I read the article and the advice is not bad but I have some problems with it.

Source: https://beincrypto.com/3-top-tips-to-stay-safe-while-margin-trading-crypto/

Overall, trading with low leverage is a simple way for newer traders to get to grips with the market, providing traders with more ‘breathing room’ compared to high-leverage positions. Once a trader feels comfortable with around 2-5x leverage and has a thorough understanding of a platform’s margin call levels, they might then want to begin testing higher leverages to increase the profitability of trades.

My main problem with the quote above is that they are encouraging new traders to use leverage, and that is a mistake, unless you have been in the market for years and you have been obtaining profits through those years then there is no justification for you to use any level of leverage, the market of cryptocurrencies is too volatile and even a very low level of leverage can be enough to wipe out your account in minutes and that is not something that a new trader can manage effectively.

[teosanru]

I think margin trading is like the very hard level of the game of trading. But the thing is that like every level requires you to learn a new skill in order to succeed from that level. In this level of trading it's risk management. People often say it's hard to calculate your stop loss and profits and everything in Margin trading as all of it get's messy but the truth is most of them are reluctant enough to not give it a second thought before diving into the trade. I think Risk management is the key to play Margin Trading Safe and there are plenty of calculators available online which can pretty much help you in calculating the risk you are taking per trade and what should be your risk to reward ration if you are taking such risk.

[leowonderful]

If you're trying to gauge sentiment through long-to-short estimators like Coinfarm for Bitmex, note that because of the way Bitmex contracts work, there is always one short for every long and vice versa, and with sites like Coinfarm, there's no indication of what sort of leverage each trade on the site was placed on or anything like that. It's also nearly impossible to gauge actual sentiment no matter what sort of tool you're using, and so I'd advise using technical analysis over pure sentiment-based analysis.

Another reason why it's not a good idea to use extremely high leverage is because an increasingly large percent of your trade goes towards maintenance margin, and this means you get liquidated even faster with 100x leverage and higher leverage. The effect does become less and less noticeable at lower leverage, however.

[DarkDays]

I have a question to all of the traders here, especially when it comes to crypto margin trading. Do you think these three tips about staying safe while doing margin trading crypto would be effective?

Despite that you can say it's the safest way in trading cryptocurrencies, there's no such guarantee that it would be really "safe" as the market is so unpredictable that it would go down anytime without warning.

Just like what is happening to Bitcoin and other cryptocurrencies now, the prices are going down and it may expect to go even deeper as much as $7,400. Now it's hanging on around $7,600+.

I read the article and the advice is not bad but I have some problems with it.

Source: https://beincrypto.com/3-top-tips-to-stay-safe-while-margin-trading-crypto/

Overall, trading with low leverage is a simple way for newer traders to get to grips with the market, providing traders with more ‘breathing room’ compared to high-leverage positions. Once a trader feels comfortable with around 2-5x leverage and has a thorough understanding of a platform’s margin call levels, they might then want to begin testing higher leverages to increase the profitability of trades.

My main problem with the quote above is that they are encouraging new traders to use leverage, and that is a mistake, unless you have been in the market for years and you have been obtaining profits through those years then there is no justification for you to use any level of leverage, the market of cryptocurrencies is too volatile and even a very low level of leverage can be enough to wipe out your account in minutes and that is not something that a new trader can manage effectively.

Why would they be trading on a margin trading platform if they don't intend to use leverage?

I wouldn't say that the markets are too volatile for any kind of leverage, newbie traders should be safe playing with 2-4x leverage, after all, 25-50% moves in a single day for a major cryptocurrency are practically unheard of.

Personally, I'd suggest sticking with low leverages and a nice tight stop loss for beginners, if they're not the type of person to watch the market 24/7.

[Pearls Before Swine]

Despite that you can say it's the safest way in trading cryptocurrencies, there's no such guarantee that it would be really "safe" as the market is so unpredictable that it would go down anytime without warning.

What's the safest way to trade, using margin?  That's ludicrous.  Trading on margin is far more risky than simply trading with a cash account.  I get why traders use leverage, but it is *not* safer than just using your own money to trade without borrowing funds in order to increase potential profits.

My main problem with the quote above is that they are encouraging new traders to use leverage, and that is a mistake, unless you have been in the market for years and you have been obtaining profits through those years

I agree, tho I had to chop your post off since you used a runon sentence.  Exchanges love newbies using leverage since the market is usually so volatile that they will probably lose everything.  Traders starting out ought to just use their own funds instead of borrowing from an exchange.  Sadly I don't think most will heed that advice, as greed usually wins out.

[1Referee]

The effect does become less and less noticeable at lower leverage, however.

What people consider low leverage is still extremely high in the grand scheme of things. I had a discussion once with a wannabe trader and I was kinda made fun of for not going beyond 3x leverage and to some times stick to just plain spot trading. The dude was convinced that up to 20x leverage is still within the "safe zone" which is completely retarded.

Crypto in general is inherently already extremely volatile and people want to add 20x more risk to each movement because of their greed. No wonder most people end up broke here.  

[nydiacaskey01]

Question is, is there a way to stay safe in trading? We all know how unpredictable the price of Bitcoin is. Even those who are very good at reading charts and graphs can't precisely predict where Bitcoin is heading, what more with Margin Trading. The returns are high I agree but the risk is higher than trading the old fashioned way. So is there a way to stay safe? I guess there's none. Dont trade at all maybe.

[maxreish]

Those tips in the article will contribute to lessen the risk of doing margin trading. Actualy, whenever I execute trades i am doing small leverages. By this it will give you a longer liquidity period than higher leverages.I assumed it is effective because I am still gaining profits.

And with regards to indicators, some may misread the ratio of it or complicate things because of using so much indicators. There is nothing wrong about that but just make sure you really know how to analyze and read those for effective margin trading.

[whtchocla7e]

Thanks for your post, it really helped me. 1 merit has sent to your post! I tried trading margin many times, it was not profitable for me. Although it is a small amount ($ 5-200), the losses made me lose confidence in trading margin.

[nreal]

I have a question to all of the traders here, especially when it comes to crypto margin trading. Do you think these three tips about staying safe while doing margin trading crypto would be effective?

All of these things are useful, but it depends a lot on how the trader uses them. However, I don't see the article mentioning a stop loss, and I think a stop loss is the most important in a risky trade like margin trading.

[NathanJB]

I have a question to all of the traders here, especially when it comes to crypto margin trading. Do you think these three tips about staying safe while doing margin trading crypto would be effective?

All of these things are useful, but it depends a lot on how the trader uses them. However, I don't see the article mentioning a stop loss, and I think a stop loss is the most important in a risky trade like margin trading.

Setting a stop loss is a major commandment in the book of cryptocurrency margin trading. No one should forget about stop loss, especially in margin trading. In margin trading, especially if the leverage is being set at a very high level, everything will turn to zero in a blink of an eye. If you set an order and forget to set a stop loss and you take a very short nap, it is very possible that when you wake up and get back to your trading portfolio, it says you have zero balance. Setting a stop loss is a golden rule.

[jostorres]

Did you just say that margin trading is easy? That's one of the most difficult and most risky things to do when it comes to trading. The risk in margin trading is very high, that's why anyone that wants to start margin should first learn the fundamentals of margin trading so that they don't end up making mistakes, trading with emotions and holding on to positions that would soon fall.

I already saw in the article that they recommended where newbies can learn the fundamentals of margin trading, just like TradingView, there are other websites too.

[Willitivity]

Nice and quite handy tips right there. I love the way they were analysed and detailed out for ease of understanding.
Even though I haven't tried our margin trading on a Very good period, but I can sure align some of these tips to normal trading. Also this helps for someone seeking to try out margin trading. It actually a very risky something.

[DBronze98]

Yes, this is absolutely true. I often get caught up in big levers until I have my account burnt for the first time. Things were crazy and I lost confidence in myself a few months ago. But until now, I have met some pretty good people in this short-term trading field and they advised me exactly as the article wrote. and it's important to never trade like gambling, keep your mind as stable as possible.

[Cherylstar86]

I have a question to all of the traders here, especially when it comes to crypto margin trading. Do you think these three tips about staying safe while doing margin trading crypto would be effective?

All of these things are useful, but it depends a lot on how the trader uses them. However, I don't see the article mentioning a stop loss, and I think a stop loss is the most important in a risky trade like margin trading.

Every a little cent is very important just like a million cents and it's definitely a huge amount in the future by investing. We can't deny the fact that each users makes a move that can be  benefit by those users the same perception but in the end and  it will still depend since the market is not as huge amount and I definitely believe that soon it can have huge amount in the future as wish by many here in crypto currency community.

[pundit]

I think trading with high winning rate is more important than anything else in trading. Margin trading can provides leverage on total value of coins you hold but until winning percentage is not high, margin trading is of no use. For me the 3 rules in trading are below ;
1. Never risk more than 5% of total capital in single trade.
2. Always trade with SL and TP.
3. Keep emotions aside before and after trade is taken.

Always plan a trade and remain stick to that plan, changing plan in between can lead you to losses.

[South Park]

I think trading with high winning rate is more important than anything else in trading. Margin trading can provides leverage on total value of coins you hold but until winning percentage is not high, margin trading is of no use. For me the 3 rules in trading are below ;
1. Never risk more than 5% of total capital in single trade.
2. Always trade with SL and TP.
3. Keep emotions aside before and after trade is taken.

Always plan a trade and remain stick to that plan, changing plan in between can lead you to losses.

The three points that you gave are good but your winning rate alone is not the most important aspect of your trading system, there are many systems that have a very low winning rate but it can be very profitable to trade because when those systems win they earn you a huge amount of money, and it exists the possibility that a system with a high winning rate is a losing one because the profit that you will get with each winning trade is small while the losses that you get are huge.

[Twentyonepaylots]

Did you just say that margin trading is easy? That's one of the most difficult and most risky things to do when it comes to trading. The risk in margin trading is very high, that's why anyone that wants to start margin should first learn the fundamentals of margin trading so that they don't end up making mistakes, trading with emotions and holding on to positions that would soon fall.

Some people might find margin trading easy especially when they have a lot to risk. Margin trading requires adepth knowledge of the market and your target, being too clumsy with your decision might leave you nothing but tears. Margin trading is more risky, yes, but it is also the highest potential rewards. But then again winning and losing will just be based and reflect as who you are in the market, know your field before anything else.

I already saw in the article that they recommended where newbies can learn the fundamentals of margin trading, just like TradingView, there are other websites too.

You can find everything on the internet and it would costs you $0 to search and learn anything. I find margin trading a hard one, but I think it will be just fine as long as you're guided by the fundamentals of it.  In most cases, margin trading teach the hardest way to learn.

[Distinctin]

Yes, this is absolutely true. I often get caught up in big levers until I have my account burnt for the first time. Things were crazy and I lost confidence in myself a few months ago. But until now, I have met some pretty good people in this short-term trading field and they advised me exactly as the article wrote. and it's important to never trade like gambling, keep your mind as stable as possible.

You better find strategy that helps you out from losing instead.

That is a good one. Follow their advice and stick to the strategy that you've to feel right and really making a good profit. It is also important to know the status of our trades, never think that leverage trading could help you out instead, it only gives you losses in the coming days.