Homework || Week 3 || How to Spot trade? || By @maazmoid123
Everybody should know the basics if he is into trading, otherwise, it can become a big problem for you if you don't have any knowledge about that.
So today I am here to share my Week 3 homework which is given by the #steemit professor @besticofinder.
So let us start:
Spot Trading:
Spot trading is the most common and normal trading, in which we do buy and sell currency. We sell one and buy another. Its uses in the stock market and Cryptocurrencies market.
In other words spot trading done at the right moment or spot. And in this, it is necessary to trade should take instantly and not in the future.
With spot trading, you are essentially executing a trade at the immediately available asking and bidding price that market participants are asking for. And because of the immediate nature of spot trading, you will need to have the available assets to pay for your trade by the date of settlement.
Margin Trading
While margin trading is about when we borrow funds to invest in the market. Margin trading is surely the opposite of spot trading. In this, we borrow funds from the third parties to increase the leverage and make profits from third party money.
Advantages of Spot trading:
Some advantages of spot trading are:
- 24 hours of trading
- Can gain a lot of benefits includes profits
- Transparent System
- Avoid over-leverage
- Less risk
Disadvantages of Spot Trading:
Some disadvantages of spot trading are:
- Limited balance
- Cannot take full advantage because of less value
- Has a lot of interest rate
Advantages of Margin Trading:
Some advantages of margin trading are:
- Less transaction cost
- Has a profit potential because of the extra borrowed amount.
- Can invest in perfect timing
- can gain huge profit.
Disadvantages of Margin Trading:
Some disadvantages of margin trading are:
- More risk
- Position can get liquidated
- Can lose our whole capital
That is all with my homework. I hope I cover all of what the professor asked.
Reference:
@besticofinder, this is the entry to homework. @steemitblog, thanks once again for this initiative, I am learning a lot from this and feeling great as now I can say that I have some knowledge about these things.
cc: @steemitblog
cc: @steemcurator01
cc: @steemcurator02
Regards,
@maazmoid123
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