3 Top Tips to Stay Safe While Margin Trading Crypto - page 2.

1Referee

legendary

Activity: 2170

Merit: 1427

Quote from: leowonderful on November 21, 2019, 03:51:43 PM

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. Lips sealed

Pearls Before Swine

sr. member

Activity: 1190

Merit: 306

Quote from: cheezcarls on November 21, 2019, 11:44:43 AM

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.

Quote from: South Park on November 21, 2019, 12:38:09 PM

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.

DarkDays

legendary

Activity: 2030

Merit: 1189

Quote from: South Park on November 21, 2019, 12:38:09 PM

Quote from: cheezcarls on November 21, 2019, 11:44:43 AM

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/

Quote

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.

leowonderful

legendary

Activity: 1624

Merit: 1130

Bitcoin FTW!

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.

teosanru

hero member

Activity: 2114

Merit: 619

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.

South Park

hero member

Activity: 2884

Merit: 794

I am terrible at Fantasy Football!!!

Quote from: cheezcarls on November 21, 2019, 11:44:43 AM

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/

Quote

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.

cheezcarls

hero member

Activity: 2282

Merit: 659

Looking for gigs

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+.

Topic: 3 Top Tips to Stay Safe While Margin Trading Crypto - page 2. (Read 190 times)