Crypto Academy Week 4 Assignment for @streem4u
Hello guys! This is my homework solution to Professor @steem4u's assignment.
1. What Is Crypto Margin Trading?
Margin trading is simply defined as trading with more funds than you actually possess. It can also be likened to burrowing more funds in order to participate or maximize your profit. This is enabled with a collateral which paid by the trader to the exchange platform. This method of trading can bring about tremendous profit and sometimes, causes the trader to lose all his money.
2. How To Plan For Trading In Crypto Margin Trading.
Margin trading can be highly rewarding but can as well be a high risk especially for new traders. So it is higly adviceble to avoid margin trading especially if you are new to crypto trading. Although it hold potentials for traders with minimal funds, traders should have plans and goals- they should know what indicators they expect. It's always better to sell off than loose totally. Traders should also avoid taking with all available funds, for example, if you have 70 XLM, it's safer to trade with 20% - 50% than using all. Though profit could me more, there 3 also risk of losing all.
3. Crypto Exchanges Name That Provide Margin Trading Service and What Margin They Provide?
- Binance: This is the largest cryptocurrency exchange platform in the world. It offers leverage as much as 125× available only to users who have completed their KYC. One other criteria is that the user or trader must not belong to the blacklisted countries on Binance. Example of blacklisted countries includes the USA, Croatia, Liberia and Zimbabwe. The full list of blacklisted countries can be found in this link.
- Kraken: This is the largest exchange platform in the USA, probably because the USA is blacklisted on Binance. Kraken provide option for margine tradimg. Different leverage options exist for different pairs, for example, the leverage available for XBT/USD, XBT/EUR, ETH/USD, ETH/EUR and ETH/XBT pairs include 2×, 3×, 4× and 5×. The leverage available for ETC/XBT and XRM/XBT is 2× and 3× while the leverage available for USDT/USD, ETC/USD, ETC/EUR, ETC/ETH, REP/EUR, REP/XBT, XRM/USD and XRM/EUR is 2×. The highest leverage available on Kraken is 5×.
- BitMax: This exchamge is not available for the US traders as well. Margin trading on this exchange is available for just six cryptocurrencies, these include BCH, ADA and XRP with leverage as high as 20×, LTC as high as 33.333×, ETH as high as 50× and XBT as high as 100×.
- Deribit: This exchamge is open to all countries including the US, making it the most popular margin trading platform. The acceptable mode of funding the platform is BTC deposited. Leverage available to to 100×.
4. What Is Leveraged Tokens Trading?
Leverage token trading is a form of margin trading with derived tokem known as leverage tokens. These tokens are ERC-20 tokens deriving their value from other tokens or assets that they track. When trading with this token, it should be noted that one do not own the underlying token, hence can not be transfered to external wallet or used to pay gas fees. Leverage token trading have similarities and differences across different exchanges. On Binance, they are traded on the spot trading.
5. How To Plan For Trading In Leveraged Tokens?
Trading with Leveraged token comes with it's own risk which can be managed in several ways. One of which include the user of tending Leveraged tokens with high volatility. Those is required because the tokens are used in short term trading and volatility will increase opportunities to make profit. Traders should make enough research on the token they intend using for leveraged token trading, this involved knowing the performance of the token in different times, the teens and volatility.6. Crypto Exchanges Name That Provide Leveraged Tokens Service and What Margin They Provide In Leveraged Tokens?
Binance: Numerous leverage tokens are available on the Binance exchange. Examples include but not limited to XLMUP, XLMDOWN, EOSUP, EOSDOWN, ADADOWN and ADA UP. All leverage tokens are 4×.
FTX: Examples of leverage tokens available on FTX include but not limited to ADAHEDGE (1× Short), ADABULL (3× Short), ADAHALF (0.5× Long), ADABEAR (3× Short) etc.
7. Price Forcast For Crypto Assets XXXXXX. (This is similar question from last course, take any Crypto Assets Chart graph, as per its current price and its market trend predict its future price for only next week, what will be its future price for next 1 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 fornext week.).
Using the cake/bnb pair, I'll predict the price of cake. The web. Studying the candle sick chart, we would discover an uptrend over the past few days, I can predict that the price will increase.
Conclusion:
This topic had exposed me more to the existence of margin trading and leveraged token trading which help to maximize potential profit even with minimal funds. I made more research using different platform available to me they've deepening my understanding of the topic. However, a new traders should learn to be cautious while doing these types of trading to avoid heavy loss.Declaimer: Otherwise stated, none of these pictures is under any copyright.
This is a link to my Twitter post:
https://twitter.com/Damzxyno/status/1389726604197249029?s=19
Hi @damzxyno
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