Post
Topic
Board Trading Discussion
Re: What is margin trading?
by
Sir.Stevenson
on 07/01/2019, 15:49:46 UTC
What's more, is you can short sell.  Short selling, or shorting, is a way to profit from the downward trending markets.  This is a process where you borrow from the exchange/trading platform in order to sell high and buy back in at a lower price, thereby repaying the 'debt' and profiting from the difference in the sell and re-buy price.

Shorting, like margin trading with high X leveraging, is not a widely-available option at most existing crypto exchanges, but is much more prevalent in traditional financial markets. It allows for profit to be taken during lowering price actions, and can provide a means of creating more rounded trading strategies. A handful of advanced trading platforms like PrimeXBT (https://primeXBT.com) are now allowing for these renowned techniques used in forex/stock markets, with up to 100X leverage which can be applied to all positions (including short) to further increase profit potential in bearish markets.  

It is typically advised however to ensure effective risk management precautions are simultaneously utilized (like stop-loss orders, etc.) to limit your loss potential.  Additionally, it is also advised to start off with lower X leverage (up to 10X max) as stop loss orders can be executed more easily with high X leverage, meaning you'll lose your investment will less price movement, leaving less room for error.  There are many ways to profit in a bear market, but shorting is an ideal method - provided you conduct thorough technical analysis in order to trade with the trend.