Cryptopreneurs01
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Joined: Sun May 02, 2021 11:44 pm

What is cryptocurrency leverage trading ?

Mon May 03, 2021 12:36 am

Cryptocurrency leverage trading is a system that allows you to borrow crypto from your broker to have a higher buying power for your trade. Most cryptocurrency trading platforms offer up to 100% leverage.

Leverage trading was originally designed for people with low capital and whose interest is to day-trade for survival. It was meant to enable them to leverage a small amount of crypto for a return of interest in a value more than the trader's fund accruable interest in a particular trade.

However, as it increases the potential for gain, so it also increases the potential for losses. So be careful when leverage trading.

UNDERSTANDING TERMINOLOGY: Leverage and Margin Trading

The word Leverage and margin trading is confusing to many people, so I find it important to shed light on it.

Margin Trading allows you to gain access to a large amount of capital and leverage it. Trading with margin gives you the opportunity to profit more than trading with your actual capital if your trade is successful, but if the trade goes contrary, it leads to a greater loss too.

You use Margin to create leverage. Leverage gives you the opportunity to open a trade larger (Position) than that which you would be able to open with your actual capital.

Moreover, cryptocurrency leverage trading comes with huge advantages and disadvantages. Greater profit - greater losses, diversification - high-risk trading, ability to trade with limited fund - the ability to lose total capital in a volatile market, among others.

Leverage and Margin trading teaches discipline and risk management and this is very tempting to newbies.

There are a lot of leverage trading platforms on the internet, in the below article you will learn about the two best leverage trading platforms for bitcoin and altcoins.

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