Crypto Academy Week 12 | Homework Post for @stream4u | Crypto Margin Trading & Crypto Leveraged Tokens Trading

in SteemitCryptoAcademy4 years ago

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Dear Steemians,
I am glad to be part of this week's lesson. Thanks to Professor @stream4u for giving us this excellent lecture on Crypto Margin Trading & Crypto Leveraged Tokens Trading.
After going through the notes and researching this week's topic, I have decided to review what I have learned in my homework task.

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What Is Crypto Margin Trading?

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Crypto Margin Trading is a lending strategy used by crypto traders in trading assets. An asset is borrowed from a third party for trading in other to obtain higher potential profits. The trader gets higher profits when the trading becomes successful, and they also incur significant losses if the trading fails.

In crypto margin trading, the trader gets more funds for the trading than regular trading. Margin trading increases the trader's profit; likewise, it can also lead to huge losses if something goes wrong. A trader can get 3x or 4x profits in margin trading as compared to regular trading. There can be a 3x or 4x loss if the trading fails.

Different crypto exchanges provide different Leverage on margin trading services; this can range from 1x to 50x.
The trader pays interest to the exchange platform if there is profit or loss. This why is it is adb=visable for only crypto experts to engage in this kind of trading.


Advantages of Crypto Margin Trading

  • Margin trading educates the trader on how to plan and manage risks in crypto trading.

  • Margin Trading provides the trader with an opportunity to get more funds for the trading

  • The trader gets huge profits if the trading becomes successful.

  • With margin trading, the trader can bring diversity to his or her trading positions.


Disadvantages of Crypto Margin Trading

  • Margin trading involves high risk

  • the trader can lose many funds if the trading goes wrong.

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How to plan for Trading in Crypto Margin Trading

Just like any trading, margin trading also needs the trader to plan before starting the trade. Below are some of the ways to plan crypto margin trading,

  • The trader should get enough information on the asset they want to invest.

  • The trader should understand the risks involved in the trading before starting

  • Beginners can start practising Demo trading to gain crypto trading experience before going into real trading.

  • It is advisable for Traders to start with low-level leverages.

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Crypto Exchanges Name That Provides Margin Trading Service and What Margin They Provide?

  • Binance Exchange offers both isolated and cross margins trading with Leverage up to 10x

  • Bityard offers isolated margin trading leverage of up to 125x

  • Poloniex offers up to 100x Leverage in margin trading leverage in margin trading.

  • PrimeXBT offers Leverage on margin trading up to 1000x for FX.

  • Kraken offers major cross margin trading with Leverage up to 5x.

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What Is Leveraged Tokens Trading?

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A leveraged token makes it possible for a trader to participate in a leveraged trading position in a digital asset without worrying about managing the margin trade.

Leveraged tokens are good for buying and selling digital assets in a short time. Leveraged tokens provide traders with variable and fixed leverages without managing liquidation risk, margin, or collateral.

Leveraged Tokens are used for trading in the various exchanges; these tokens cannit be withdrawn into the trader's wallet. With Leverage token, a trader can buy, store and transfer the tokens just like other tokens.

Advantages leveraged Tokens

  • Leveraged tokens can be transparently tracked and kept in a personal Ethereum wallet since they are found in the Ethereum blockchain as ERC20 tokens.

  • Leveraged Tokens helps traders to capitalize on the market volatility.

  • Traders can reinvest or sell some of the tokens if the market is down; this avoids liquidation risk.


Disadvantages of Leveraged Tokens

  • The exchanges determine the transparency of leveraged tokens; this makes the exchange control the market than the trader.

  • Trading leveraged tokens is very risky. Traders can easily lose their funds if they do not know how to do leveraged token trading.

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How To Plan For Trading In Leveraged Tokens?

  • Traders should Start with small investments; making small profits from your small investments is better than losing all your money for investing hugely think that you can make huge profits.

  • Traders should set their market strategy and go by that; this will help prevent unnecessary losses.

  • Traders should analyze the various exchanges and select the best offer which suits them.

  • Traders should fully understand the risks involved in crypto trading before starting the trade.

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Crypto Exchanges Name That Provides Leveraged Tokens Service and What Margin They Provide In Leveraged Tokens?

  • BitMex offers high-cap leveraged tokens up to 3x spread.

  • Kraken offers a margin of Leverage of up to x5.

  • KuCoin offers Leverage on a 10x margin

  • Huobi has a 5x leverage margin

  • Polonix offers up to 3x Leverage on leverage tokens

  • Coinbase offers up to 3x Leverage

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Price Forecast For Crypto Assets XXXXXX. (This is a similar question from the last course, take any Crypto Assets Chart graph, as per its current price, and its market trend predicts its future price for only next week, what will be its future price for next one week. You can predict for any direction up or down but explain it properly on what basis you have predicted the price. What will be the possible low level and high level for next week.).

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7th may, 2021 BTC/USADT chart

From the BTC/USDT chart above, BTC has started increasing after it fell within the four quarter of last month. According to my prediction, looking at the current resistance level, BTC is likely to hit $60,800 next week.

BTC has seen a shart rise within the first week of this month; the chart shows an uptrend of BTC. In this case, it is possible to fall to somewhere at $$54k and then rise again to pass the current resistance to $60k.
Currently, the price of BTC moves around $56,236.46; it will be very difficult for it to fall below $54,000 within the next week.

From the chart above, it will be good for traders to capitalize on the current price of BTC and take a position in the market. This is because BTC has the potential to hit $60,800 next week.
Meaning we expect a breakthrough of $4,000 by next week, and if it doesn't, then it would touch the support level which

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Conclusion

Despite the huge profits a trader can make from margin trading, great losses can also be incurred. This is why it is good for experienced traders.

A leverage token allows traders to acquire leveraged trading positions without managing liquidation risk, margin, or collateral. This is one of the strategies traders use to gain more profits without worrying about high risks when the market goes down.

Traders use both Crypto margin trading and leverage token trading is good for a trader to amplify their profits, but great losses can incur; that is why much care should be taken to avoid or minimize losses.


Thank you, professor @stream4u for this wonderful lecture

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Hi @blessingkasabe

Thank you for joining The Steemit Crypto Academy Courses and participated in the Homework Task.

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Provided information are explained well. However, expected more details on Leveraged Tokens Trading like how their price behavior in a market with respective of assets price. On the price prediction topic, you could have done better try to go for more detail, as you mentioned it is possible to fall, provide more clarity like why it will fall, what you have seen in chart explain in detail.
Try to explain the Graphs in more details.
7
Done

Your Homework Task verification has been done by @Stream4u, hope you have enjoyed and learned something new.

Thank You.
@stream4u
Crypto Professors : Steemit Crypto Academy
#affable

 4 years ago 

Thank you for reviewing my work

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