Introduction to Leverage Trading and Risk Management

moneyster (65)PRO TRON FANin Tron Fan Club • 5 months ago

_{Background Image Source- Canva.com/^Location}

Assalam-o-Alaikum Steemians !

I'm @moneyster, a professional level Cryptocurrency investor and an analyzer. As usual, today I thought to share another Crypto-related experience with you. I hope this article will be considerably beneficial for all the Steemians in this community

@moneyster (1).gif

Introduction to Leverage Trading in Crypto?

_{Image Source - https://www.btcc.com^Location}

Leverage Trading is a high-risk Trading Method that can be used as a Lending Trading method. Here we can earn a lot by investing through a small amount of Crypto. However, here the risk is very high as compared to other trading methods.

Furthermore, here we have to analyze the present market very well before entering to the market. Because, if we don't take entry without analyzing the market, it may cause us to lose our all funds. The reason behind that is that leverage trading is a Trade that we are doing by investing a small margin.

@moneyster (1).gif

What is the risk of Leverage Trading

When we talk about the risk of leverage Trading, it can happen in two ways. The first way is that we have to lose our entire investment as we are investing a small amount of margin but a high amount of leverage. Then, even a small price change can be a reason for getting liquidated soon.

The second way is that we are losing our funds when we are trying to protect our initial investment by adding more funds to reduce the liquidity level. Then, if the price direction goes on the negative side for a long duration, we have to pay a big interest as the leverage trading fee.

@moneyster (1).gif

Difference Between Leverage Trading and Spot Trading

_{Image Source - https://www.binanace.com^Location}

As I said before both Leverage Trading and Spot Trading are quite different when we take is as a trading method. Because, in leverage trading, the entire capital is not owned by us. Here we have only invested a small amount but here we have taken a large amount as a loan from the exchange.

However, in spot trading, the entire capital belongs to us and we don't need any loan from the exchange as we are buying coins in our wallet as a safe method. That is the main difference between Leverage and Spot Trading.

At the same time, as I said in my previous article, we should remember that all the indicators and strategies are not efficient completely as nothing we can find 100% efficient in the world. So, we should depend only on these strategies and indicators to confirm our trading opportunities.

@moneyster (1).gif

I have studied the below-sourced articles to study these topics further, and I have explained all the above facts in my own words and experience.

Source 1

_{10% benificiary set for @tron-fan-club}

#tronfanclub #cryptography #crypto #club5050 #pakistan #steemexclusive

5 months ago in Tron Fan Club by moneyster (65)PRO TRON FAN

Sort:

steem.history (77) 5 months ago

Thank you, friend!
I'm @steem.history, who is steem witness.
Thank you for witnessvoting for me.

_{please click it!}

_{(Go to https://steemit.com/~witnesses and type fbslo at the bottom of the page)}

The weight is reduced because of the lack of Voting Power. If you vote for me as a witness, you can get my little vote.