Many people say that Margin trading in Bitcoin is a way to make money quickly, but others think it also easily leads to heavy losses. Some cryptocurrency exchanges allow margin as BitMex, Poloniex, Bitfinex, etc. It can push high profit up to x3 – x10, a very attractive number but also potentially many “dangers”. So what is it?
What is margin trading?
Margin Trading is a form of trading that uses financial leverage so that users can trade or exchange for a larger amount than you have. From there, investors can create higher and higher profits.
When you make a margin request, all the money you use is borrowed from other users. The money in the account you use to deposit is used only as collateral for the loan you borrowed and to pay the lender, not for transactions.
Benefits of Red Box investors when Margin trading
For spot trading, it is only possible to make a profit by buying low and selling high. But for Margin Trading, Red Box investors can make profits regardless of whether the market is up or down.
Increase the amount of money you have available for trading: When you use leverage, you can adjust the amount of money to buy RBD tokens and when the price increases, your profits will go up many times. Margin Trading is suitable for those who have experience in trading but have little capital, take advantage of leverage to buy more tokens and quickly earn profits from small increases instead of buying fewer RBD tokens and have to wait for market price increases or sometimes only earn small profits.
Make money when the market goes down: With spot trading, you can only make money when the market goes up by buying low and selling at high prices. When the market goes down, you have no profit. Red Box investors can make money even when the market downtrend thanks to short orders, which is impossible at normal trading platforms.