Post
Topic
Board Trading Discussion
Re: What is margin trading?
by
tradebtcEU
on 13/11/2018, 16:37:32 UTC
The first thing to understand about the margin calls is related to the nature of the assets you are trading. Many brokers deals in fact with contracts based on underlying asset, as it's the case with derivatives, so you may find out that in fact you are not trading real coins but contracts.

Due to its very nature, which is extremely volatile, cryptos are extremely vulnerable to any leveraged trading strategy. A margin trading account contains often clauses that could ruin you in a matter of days or hours.

Another aspect which is disregarded by most traders, including forex and other types of centralized trading, is that the broker has the possibility to see clients strategies and to manipulate the market in such a manner that finally will wipe out all their money. Don't forget that a broker's job is to make money, which is take your money.

If you want to trade cryptos, you need to make sure you:
- own the asset (having it in your own wallet)
- trade it then on a low fee trading platform
- learn what are the smallest withdraw limits of that exchange
- do the trades
- eventually put your coins into your safe wallet

So my advice is: don't go on margin trading!  Even if you are a good trader, the fees and interests are going to eat you alive!