Crypto industry is booming at a much faster rate. And, it's such an interesting and great time for the crypto sphere. The crypto trading market is identifying the latest and advanced tools, the best ideas, latest technologies, and the most innovative applications for traders. Amid this growth, there comes a new set of rules and regulations, product innovations, NFTs and much more.
All this has made the crypto market more interesting as well as a hot topic among traders. One such interesting feature which is attracting traders a lot is trading with leverage. Also known as margin trading, this is a useful strategy that allows a trader to magnify the effective size of their position by increasing their exposure as per their initial margin. Whenever your positions are multiplied, the returns will also be higher.
How margin trading is profitable in a failing market?
One of the key features of margin trading is that it allows its traders to turn a bearish market into a profitable trade. How? Let's understand this with a basic example:
Suppose you owned 1 BTC in Jan 2022, when its value was at its peak, say above $50000. While expecting that the market will fail or crash down in some time, you sold that BTC at this higher price point with an aim to buy it back at a much lower price. After a while, you decided back to buy BTC in July 2020, when the market was worth $42000. Here you could have made a profit of $8,000 minus the transaction fee.
And, now you get to know about margin trading, and you added leverage trading. Here the potential profit could have much higher than this. Suppose, you have traded with the leverage of 10:1, your profit could have been 10 times higher.
Trading on BitMEX is quite different from other platforms as these platforms allow you to directly trade crypto coins in your account. This further means that you will directly buy or sell BTC while you execute orders. But on BitMEX exchange, you open a position wherever you think the price will go on. Here at this point, you will gain the price difference as your profits, in case the trading goes successful. In this kind of trading, you are buying contracts for long or short trades and every trade must be closed at some point, i.e. your profitable target.
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