Cryptocurrency has received worldwide attention in the past few years. You have heard about people making huge profits from digital currency by now. Trading crypto is simple, but margin trading is an advanced option. It is the easiest way to short a coin if you believe it is likely to crash in the future. This article covers things to know about margin trading and the best platform to use.
Definition
Margin trading involves digital trading assets using a broker or third-party funds. In cryptocurrency, other traders provide the funds then get interests depending on market demand.
Unlike other trading accounts, margin trading accounts give users large funds, allowing them to leverage positions. Furthermore, it expands trading results for traders to earn huge profits, thus suitable in low-volatility markets.
How does margin trading work?
As mentioned above, margin trading involves borrowing capital from a trader or a third party to invest in something. It allows one to access a large capital. On the other hand, the lender earns interest while the borrower makes huge profits after a successful trade.
Why choose margin trading?
Here are the benefits of margin trading:
- Leverage: margin trading can amplify your profits .you can use the margin to short or long a cryptocurrency and leverage.
- Profits: you can earn huge profits with less money.
- Diversification: instead of holding your crypto, you can diversify trading to earn great profits. Most people diversify with leverage trading.
- Trade with limited funds: if you have limited funds or coins, you can still open large trades.
How to choose a margin trading platform
- Safety. A good platform has advanced security features to protect the assets from hacking or malicious activities.
- Trading fees. Choose an exchange that offers competitive trading fees.
- User interface. It should have a user-friendly interface to execute trades fast.
- Coins. It should have a variety of currencies to choose from.
Gate.io: Best margin trading platform
Gate.io is one of the popular exchanges that allow margin trading. Investors can use their digital assets as collateral and borrow a large capital. They repay these loans within a given time. Moreover, they can use leverage to maximize profits.
Users can earn up to 10-x leverage based on the market. On the other hand, the maximum amount a user can borrow depends on the leverage rate. Moreover, the margin market allows users to borrow/lend more than 200 coins. Another benefit of margin trading on Gate.io is offering the best services at extremely lower margin trading fees.
How to start margin trading on Gate.io
Step 1
Download Gate.io mobile app and Sign up to open an account
Below the navigation bar, Click on “exchange” then “leverage.”
Click the leverage ratio to manage your margin trading account
Tap transfer funds, repay loans, or borrow
Step 2
Before you start margin trades, you first need to transfer collateral:
Know the transfer direction
Choose the coin you want to transfer
Put the transaction volume
Click “transfer now.”
Step 3
Select “BUY” or “sell,” depending on the currency borrowed.
Set buy/sell prices and buy/sell amounts, then click “buy” or “sell.”
After placing the order successfully, view it on the “orders” page.
