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

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Good morning steemians.I am glad to participate in this weeks assignment post.I thank Professor @stream4u for this great lecture.

CRYPTO MARGIN TRADING
Consider a situation where as a business man,you have a capital of $10,000 but is allowed to buy goods worth $100,000.This is (×10) of the persons capital.If the business goes well,the business man will refund the extra $90,000 to the third-party and still retain his $10,000 plus the profit made.This is likened to Margin trading in the cryptocurreny world.

Crypto Margin Trading is a process where a trader buys assets from funds from a third-party (likely the crypto exchange) where he has the margin account.It allows crypto traders to make more profits because they are given more capital,more that the capital they have on their account to trade with.

Crypto Margin Trading is like buying with a loan.

HOW DOES THIS WORK
For a margin trading to occur,the trade has to pay a percentage of the total order value.If a trader wants to trade on a leverage of say (5x ).Then trading with $50,000 will require the trader to commit one-fifth of the amount which is $10,000.That $10,000 that the margin trader commits is called the margin. Different crypto platforms have different leverage rates for initiating margin trading.

HOW TO PLAN FOR TRADING IN CRYPTO MARGIN TRADING
Every business in life requires planning to avoid heavy loss and to maximize profit.Margin trading is like trading with a loan.One has to be sure that the trade have a higher likelihood of being profitable before embarking on Margin.

One can plan for Cypto Margin Trading by:

•One of the ways to plan for crypto margin trading is to understand the cryto market cycle.The trader should know when there is a bull(rise in price),a bear(drop in price) and a flat.This would help the trader to know the right time to initiate a trade.

•Forecasting on the crypto that he intends to trade to know if the price will rise after the purchase.Since making profit is dependent on the rise in price of the crypto purchased.

•The trader also have to check the interest rate of the crypto exchange platform.

•The trader must know the leverage value say (x2,x5,x10) etc so as to know how much he would have to commit before the margin trade can take place.

•It is also important for the margin trader to minimize his trades,or to buy little by little to avoid incurring heavy loses.

CRYPTO EXCHANGES THAT PROVIDE MARGIN TRADING AND THE MARGIN THEY PROVIDE

There are lots of crypto exchanges that provides margin trading to traders.However,each exchange has its own leverage value and also the coins that are available for its margin trading.Here is a list of few of the cryto margin trading exchanges.

•Binance

•BitMex

•Bybit

•Huobi

•Deribit

•Poloniex

•Kraken

Let me compare them using a table.

CRYPTO EXCHANGE	LEVERAGE	MARGIN
BINANCE	1x to 125x	0.8% to 100%
BITMEX	100x	1%
BYBIT	100x	1%
HUOBI	3x	33.3%
DERIBIT	100x	1%
POLONIEX	5x	20%
KRAKEN	5x	20%

LEVERAGE TOKENS TRADING
Leverage Tokens are simply ERC-20 tokens that give a leveraged exposure to the price of a cryto without the risk of liquidation.Leveraged Tokens are the best way to leverage trading.source.

Leverage Tokens Trading is a way of trading tokens without the buyer managing any leveraged position.For Instance,FTX tokens allow for a leveraged position without having the headache of margin, liquidation, funding rate or collateral.

In some cases,there is always a range of variable leverage say between 2X to 4X.This makes traders to make more profit(during the bull run) and less loss/not running into liquidation during a bearish period.

Although the leverage value is not always made so available at all times.This is intentionally done to prevent trader from anticipating the event and making excess profit.

Advantages of Leveraged Token

•Since Leverage Tokens are ERC-20 tokens.They can be withdrawn to any ETH wallet.

•It offers No Liquidation Risk.

•Easier to manage.

HOW TO PLAN FOR TRADING IN LEVERAGED TOKENS

Before a trader will engage in Leveraged Token Trading,he has to plan well by doing the following.

•It is important check the cryto exchanges that run Leveraged Token Trading to know the best exchange to choose.

•The next plan is to know token that one intends to trade.It is important to do a thorough analysis as to know the volatility of the token that the trader intends to use for Leverage Token Trading.

•It also important to avoid trading many tokens and to access the rebalancing of the leverage since the Leverage value is not constant.

CRYPTO EXCHANGES THAT PROVIDE LEVERAGE TOKENS SERVICE AND THE MARGIN THEY PROVIDE

Like I did in the margin trading.I will summarize the crypto exchanges that provide Leveraged Token Trading and their leverage in a tabular form.

CRYPTO EXCHANGES	LEVERAGE
HUOBI	5X
DERIBIT	100X
FTX	101X
BITMEX	100X
BINANCE	1.5 X to 4X

PRICE FORECAST FOR BITCOIN(MY CRYPTO CHOICE FOR THE HOMEWORK) FOR NEXT ONE WEEK

Screenshot from my CoinGecko app

The above screenshot is a chart for BITCOIN price in the last 24-hours.The price of Bitcoin is set in Naira(my local currency).At the moment the price of BITCOIN stands at 21,678,566.27 NGN at -4.4% down.

The price started from 22.5 million NGN and rose to around 23 million NGN(24-hour high)...then it took a dip and dropped to as low at 21.2 million NGN(24- hour low).

It then rose to 22.5 million NGN again in the earlier hours of today(preferred time to go for a buy, since it's back to the starting point).However it took a dip again but not up to the lowest dip of 21.2 million NGN.Presently the price is at 21.6 million NGN.

MY FORECAST FOR THE NEXT 7 DAYS

Considering the market trends.The price of Bitcoin will go up for the next two or three days because it has dipped to almost the 24-hour low.When it get to 23 million NGN....It would take another dip until it drops to 21.2 million NGN once more.At this point where the price has leveled with the initial 21.2 million low.There would be a bull run up until 23 million and maybe above.

In conclusion,I predict that the price of BITCOIN will be over 23,000,000 NGN(around $58,000) in the next 7- days

Thank you professor @stream4u for the time.