Steemit Crypto Academy – Season 2 - Week 4 - Post for @stream4u

Hello awesome people, how is everyone doing today, it’s a new week, a bright new day with so much excitements. It’s a fresh new week and as always, we are looking forward to more exciting things to come. This week’s topic is about crypto margin trading & crypto leveraged tokens trading.

What Is Crypto Margin Trading?

Crypto margin trading is basically when a crypto trader borrows a cryptocurrency asset in addition to the trader’s initial capital so as to have more capital to perform a trade in order to make more profit when the price of the cryptocurrency used for trading goes up. In other words, crypto margin trading allows a crypto trader to borrow a particular asset so as to leverage assets that the trader already owns in order to have more purchasing power to trade with and make more profit from the trade. This is where margin trading comes into play, so as to help traders who want more capital and more profit if the price goes in their favour. When the margin or leverage trade is successful, the trader would pay back the borrowed asset with interest.

For instance a crypto trader has $500 in a particular crypto asset and wants to make a trade with $5000 so as to make bigger profit, the trader decides to borrow additional $4500 from the margin trading platform in order to have the purchasing power of $5000 to buy a particular cryptocurrency and make more profit when the price goes up. This is called a 10x margin or leveraging 10x the initial capital. This would turn out to be very profitable when the price of the purchased asset goes up as the trader would make 10x the profit, however, when the price of the asset falls down, the trader would have a 10x loss as well. Margin trading can be very profitable if done right but can be very risky as well because a trader can lose his initial trading capital when the price of the cryptocurrency invested falls down.

How To Plan For Trading In Crypto Margin Trading

Trading in general requires a lot of careful planning so as to make the right decisions when investing in any cryptocurrency asset because of the high risk of price volatility in the market. However, margin trading is even more advanced and requires even more careful planning in order to be in a good position to make more profit. To plan for margin trading, the trader has to;

• Have a clear entry and exit plan
• Always pay attention to trends
• Always margin trade with risk capital
• Never allow greed get into the way
• Make sure to do proper technical analysis before jumping into any margin trade so as to be able to predict the price direction of the cryptocurrency
• look out pay attention to sentiments which can drastically affect the price of any cryptocurrency
• Have a clear strategy before jumping into any margin trading
• Stick to trading rules
• Not allow personal emotions get into the way of trading

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

• Binance – Binance offers margin trading on Large marketcap coins up to 5x
• Poloniex - Poloniex offers margin trading up to 2.5x
• BitMEX - BitMEX is another platform that focuses a lot on BTC margin trading and up to 100x leverage.
• Kraken - similar to Binance, Kraken offer margin trading on larget marketcap up to 5x
• StormGain – StormGain offers margin trading up to 200x on large marketcap coins
• Bityard – Bityard provides margin trading up to 125x

What Is Leveraged Tokens Trading?

When we talk of leveraged tokens, we talk of ERC-20 tokens that are issued on the ethereum blockchain. Leveraged Tokens Trading is basically a financial product that allows crypto traders to leverage without needing to worry about collateral or liquidation, increasing the profit potential from the leveraged cryptocurrency asset. While this leveraged tokens can help crypto traders make even more profit, they aren’t meant for long term hold because these leveraged tokens may lose significant value in a high volatile cryptocurrency market.

How To Plan For Trading In Leveraged Tokens?

Similar to planning for margin trading, trading leveraged tokens requires planning as well. To plan for trading leveraged tokens, the trader has to;

• As always when it comes to trading any cryptocurrency asset, the trading leveraged tokens requires a clear entry and exit plan
• Always pay attention to trends so as to make the best trading decisions
• Never allow greed get into the way of trading leveraged tokens as it can lead to loss
• Have a clear understanding of the risk level associated with trading any financial instrument.
• Make sure to do proper technical analysis before jumping into any margin trade so as to be able to predict the price direction of the cryptocurrency
• Not allow personal emotions get into the way of trading
• look out pay attention to sentiments which can drastically affect the price of any cryptocurrency
• Have a clear strategy before jumping into any margin trading
• follow strict trading rules to serve as a guide

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

• BitMax – Provides trading leveraged tokens up to x3
• Hedge – Provides trading leveraged tokens up to x1
• Kraken - Provides trading leveraged tokens up to x5
• Kucoin – provides up to x10
• Huobi – provides leveraged tokens up to x5

Price Forecasting of Crypto Assets Using HNT/USDT pair

For this demonstration, I will be making use of technical analysis, fundamental analysis and sentimental analysis to try to predict the price of HNT in the next week with the help of a couple of tools. I started out by looking at the 7days charts on coinmarketcap so as to have a general idea of the direction the price is going to... HNT has passed my fundamental analysis test and has proven to be a solid project with a great future which means that there is very less chance that the current dip in price will continue to go lower and lower because HNT is a solid and quality project with great potential.

It has also passed my sentimental analysis because after going through their social media channels, people are saying good things about the project and there are no negative news surrounding the project which might lead to a collapse in price. So now, I will put more focus on technical analysis to predict the price of HNT in the next week.

HNT Chart on Coinmarketcap

On May 2nd, the price of HNT was around $19.48

At the moment, the price of HNT is sitting around $18.33 which means that it has lost a few percentage in 2 days

Looking at the overall 2 days price chart on trading view, you can see that there is a big probability that HNT will have a price increase withing a week which means that now is a good time to buy because HNT will likely go in an upward direction in a matter of days.

HNT/USDT Chart on Tradingview

Conclusion

When it comes to making correct and realistic price predictions, technical analysis, fundamental analysis and sentimental analysis are all key, whether it is regular spot trading, or margin trading, or trading leveraged tokens, these analysis types are key to making correct trading decisions. Also, it is important to make a clear plan before venturing into any form of trading financial instruments like margin trading or trading leveraged tokens, a clear plan helps to reduce the risks involved in margin trading or trading leveraged tokens.

@stream4u