As a new crypto trader Bitcoin margin trading is one of the most important aspects you need to know about before you begin. Knowing about different types of trading and other relevant factors can help you have a better and less stressful experience of trading digital assets.
Therefore, if you are new to the crypto space you need to know details such as what margin trading is and more. Buying, selling, trading or even hodling crypto is not as easy as one might think. There are numerous aspects you need to consider, which can make it easy and convenient for beginners to invest in or trade crypto.
Here are some major details to facilitate trading Bitcoin for beginners, especially if they are interested in margin trading.
Getting Familiar with Bitcoin Margin Trading
Before you dive into crypto trading, you need to be familiar with the concept of margin trading. This is also called leverage trading.
This is one of the most popular types of crypto trading because it increases the chances of getting good profits. However, if you are new to the crypto space you need to know that the profits are never guaranteed and depend on numerous factors.
It is also essential to know that margin trading can be a high-risk venture, which is why you should be:
- Careful while choosing an exchange that supports leverage trading
- Patient and get as much information about the type of trading as possible
Leverage trading means that the traders are allowed to borrow funds from the brokers, in which case the borrowed amount is called leverage. This enables the traders to open bigger trading positions without investing a big amount from their pockets. Since the positions open are bigger, the chances of getting good profits are also increased. However, it is essential to know that the trades can go either way. This is why it is important to know these details about margin crypto trading before you begin.
How it Works?
The concept of Bitcoin margin trading can be complex and difficult to understand, especially for people who do not have a lot of relevant experience or information. There are several crypto platforms that offer support to leverage trading. However, the leverage ratio they offer varies from one exchange to another.
Some of the highest leverages offered by the popular crypto exchanges go as high as 100x, 101x, 125x and 250x.
Here is an example of margin crypto trading for beginners to simplify the concept.
Let’s suppose as a crypto trader you choose an exchange that offers 100x leverage. In this case you will be able to open a trading position for $10,000. However, the amount you will be required to invest from your funds will only be $1,000.
This is how Bitcoin margin trading benefits the margin traders.
What are Some Factors Offered by Leverage Trading?
As mentioned above, margin trading is only one of the types of crypto trading. This means there are several others and they vary from leverage trading based on a few factors.
Margin trading Bitcoin for beginners can be easier and more convenient if you know how it is different from other types of crypto trading.
- Margin traders do not have to pay any daily interest payments
- No specified expiration date for positions opened by margin traders
- Price of the cryptocurrencies are similar to the spot markets
- Several exotic pairs available to be traded
Major Tips to Keep in Mind
To make margin crypto trading for beginners easy and less stressful, there are a few tips they should know and keep in mind while trading with leverage.
Knowing and following some helpful tips while trading can help in reducing the risks and also eliminating unnecessary obstacles and challenges. Therefore, if you are new to the crypto space then you need to know the tips mentioned below.
- Always begin with a small amount
- Be familiar with risk management
- Do not go all in, especially if you are a beginner
- Know the fee you will have to pay
- Learn about short-term trading
- Never overlook the fundamentals of margin trading
- Pay attention to market movements
- Properly understand the concept of liquidation
Crypto Exchanges that Support Margin Trading
If you are interested in Bitcoin margin trading then one of the most important factors you need to know are the different exchanges that offer support to this type of trading.
If you have an idea about your options you can analyze other features they offer and choose the best one accordingly.
- XENA
- BaseFEX
- Bitfinex
- Binance
- Kraken
- BitMEX
- Bybit
- Poloniex
- PrimeXBT
- KuCoin
- Phemex
Final Takeaways!
Knowing about Bitcoin margin trading is one of the most important aspects you need to know about if you want to step into the crypto space and start trading crypto. Therefore, as a beginner, the above-mentioned is essential for you to have.