I have been in the cryptocurrency trading world for the past 10 months and couldn't make much profits when the market moved to bear phase. I have been reading about margin trading and have not been able to wrap my head around it? I think i can make some money in the bear phase! Am i correct?
margin = borrowing. in this case, you use the collateral you own (BTC or USD) to secure additional borrowed BTC. you sell that borrowed BTC on the open market in hopes of buying back lower. the difference between your sell price and buyback price = profit.
for example, let's say you're trading on bitfinex and you have 1000 USD collateral. you can move that USD to your margin wallet, then open margin positions with a value of up to 3333.33 USD because the maximum leverage allowed is 3.3x. if you want to profit from declining prices, you'd open a short position.
here's bitfinex's intro to margin trading. it breaks everything down into simple terms:
https://support.bitfinex.com/hc/en-us/articles/115004555165-Intro-to-Margin-Trading