Margin trading, also known as leverage, is an option offered by most of the cryptocurrency trading platforms.
The leverage trading qllows the use of part of the total balance (portfolio) value in the trading with the possibility of raising the folds and achieve a double profit and losses can be the same size.
In this subject we will talk to one of the traders in cryptocurrencies and how he losts all his Bitcoin for use margin trading without the knowledge and experience.
The rolling subject is a university student who worked part-time and off-school hours to earn extra income and used it to buy a home in times of bear market (2018).
Says that despite the devaluation of the Bitcoin, which was owned by the low price trend, he did not discourage his intention to buy more where he was in safe trade zone. To discover the margin of the BitMEX platform . And used it without full knowledge of the subject, which made him lose what he has. To add and deposit all his holdings in the use of leverage, but his attempt to remedy the losses all failed. Then later on, he losts all his portfolio balance.
The story is quoted from the source .
What is the conclusion from this story?
First of all some may blame bad luck for this lose.
Using this investor for an untested trading technique made him lose all his property. Margin trading is very profitable, and is the same time, very risky too. And can cause you to lose all your money.
In addition, a long-term cryptocurrency such as Bitcoin can not be used for margin trading (holding).
When the loss is not to continue and trading under pressure, but must move away from trading for a short period.
Because trading requires awareness and presence of a rational mind and not a drift behind emotions and sensations.
Please note, that is not a bit of financial advice, nor the WhaleToBe team’s view