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March 11, 2020, 11:35:46 PM |
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Suppose the trader has $10k and he wants to buy an LTC. After the negative news, the price of LTC drops and 20% of the initial balance melts. The trader will have revenge emotions and will want to add more LTC position on leveraged altcoins trading platforms. For the first chain of the loss cycle, 1:2 leverage is enough to cover the loss with a first winning trade. What if the market goes against the new trade and hits stop loss? The trader loses 40% of the balance. The best idea is to avoid the martingale strategy in the bear market but the leverage tool with smart money management can be the best tool for increasing ROI. For example, the same trader opens reverse trades in parallel space and for whatever reason, the price goes up. In this case, the trader will have $12k worth of LTC and opening a new trade with borrowing from the broker($2k profit=margin), the sequence will bring the max profitability.
P.S: The margin trading is dangerous for inexperienced traders and stay away if you have no idea what you are doing. Not everyone can handle such expensive lessons. Please do your own research and calculate the risks in case of being another side of the trend.
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