What is Margin Trading
It is important to know the depth of water before diving in. Welcome to the platform of Etor Exchange which provides the facility of Margin Trading with 100X leverage on the INR deposits. Before you could invest in this, first of all you need to know some specific knowledge about Margin Trading, its history and how does it work. In simple language, Margin Trading means using additional funds provided by a third party.
- History of Margin Trading: In 20th century, Margin Trading was common in U.S. In 1920s Margin Trading was very loose. From then till date, Margin Trading has come a long way. Today, very few exchanges offer Margin Trading with leverage. Etor Exchange is one of those platforms which provide 100x leverage. The requirement has increased the demand which asked for stricter regulators. Since 1920, Margin Trading has traveled to date and has put a greater impact on the investors.
- Margin Trading in Crypto forum: Margin Trading is that power to the investors where one can trade using additional trading assets given by the third party. This boosts the investment power of investors and provides leverage. Trading with Margin allows the investors to trade more with less capital investment. It strengthens the position of the investors.
- An example to understand Margin Trading: A practical example would make things easy to understand the concept of Margin Trading. Suppose, if an investor wants to trade S/he needs to commit the percentage of the total order while Margin Trading. The initial fund deposited by the trader is called margin. Now the trader needs to decide the leverage. For example, a trader desires to trade with $50 as a margin with 3X leverage, so the trader wants to borrow $100 to buy $150 worth of cryptocurrency. It is as simple as that.
- What is short and long position?: To understand this we need to segregate both the terms and understand them individually.
Short Position: When the market goes down, traders use the short position. In simple terms, traders bet against the asset instead of it. Suppose the price of Bitcoin is supposed to go down and decline, the trader can trade in a short position by using leverage.
Long Position: On the other hand, traders can trade with leverage when there is a prediction of an increased market. In this situation, traders can buy using leverage and can sell it later.
Risk related issues: Alertness is the key to stay in the market successfully. Any kind of trading includes risk-related issues. As we all know the volatility of the market. Before investing, it is highly recommended to know the pros and cons of Margin Trading, especially the beginners.
Etor Exchange provides the stage for the investors to trade with 100X leverage in Margin Trading for the first time in India. It is the best platform for traders where there are several options that can be availed by investors. So, this is the right time to invest in Etor Exchange and get the maximum benefits.