Margin Trading can be a risky game to play. Yet, if used correctly and with prudence, it can also help us reap better returns on our investments.
For a quick background, let us explain what is margin trading and how does it work when it comes to trading cryptocurrencies.
What is Margin Trading?
Margin trading with cryptocurrency allows traders to open a position with leverage and trade without putting up the full amount.
Simply put, it increases your buying power through leverage on your existing positions/funds and allows you to buy more cryptocurrencies than what you usually can.
By buying or selling on margin, traders can scale up their buying power or Leverage, potentially generating multi-fold profits beyond what their initial funds could have done (although you need to pay interest on it which we will cover later).
Leverage here refers to the ratio of the transaction size to the