Margin Trading - Poloniex - Beginners

jeff-kubitz (68)in #money • 7 years ago (edited)

Margin Trading at Poloniex.com

Welcome Steemit Friends. During the last week I took a vacation with my Steemit earnings to Mesquite Nevada. I also took up margin trading at poloniex. The reason why I am writing this as I go along is because I made quite a bit of money and I also nearly committed financial suicide! I took a course on margin trading and read all I could find on the web including some excellent articles on Steemit on how to do it. Since I accidentally did some things that were not in the courses, I will write this series in several parts so that you do not make the mistakes I did that nearly cost me thousands of dollars.

Again, I made out like a bandit margin trading. I have been trading a long time but margin trading is different. Margin trading of tokens is much more complex than stocks and commodities. Perhaps it is similar to Forex Currency trading where there are two pairs which can each change in value during the course of your position on a margin trade. I will explain why in this series and show you the things to look for when trading:

What is nice about Margin trading?

My friends at Steemit - if you do right, margin trading is very profitable and it will always increase your Bitcoin when you are successful at your trades - that is make a profit.

This is what the Margin Trading Screen at Poloniex looks like for Litecoin:

The trading screens are the same for all the coins and this is a coin I happen to just love so I thought I would show you this one.

First of all, it is a very complicated screen but at the same time it is not much different than any other screen when trading coins versus Bitcoin or USDT (A Token that is a worth a dollar).

Suicide Buttons

The difference is - in the margin trading screen there is also your margin trading position information for that coin, in this case Litecoin. Again, this screen is very complex and you must learn it before you begin trading because there are three suicide buttons on this screen. One Button is "Buy", the other Button is "Sell", and the third Button is "Close".

They aren't really suicide buttons as long as you know what happens when you push them. So, in this course as I go through the scenarios as to when it is good to push the buttons to make a profit, pay close attention.

2.5 to 1 Margin Trading

What does that mean? In order to do margin trading, you borrow money in lending. This is automatic so you do not need to worry about it too much. But, before you begin margin trading, you should check the rates and even if everything is completely perfect...if the interest rate is high - BE CAUTIOUS!

The Order of the Courses

I will go through the courses, including telling you what to look for as good positions and explain all of it as I go. The whole point of this course is that even though there are great courses out there, they do not include everything and it is the little parts that they left out that can cause you to lose all you have and never be allowed to trade again.

Time is Money - In margin trading, we are predicting the future. We are predicting the future within a certain amount of time. And because money, or tokens worth money are borrowed at the rate of 2.5 to 1 automatically, we are paying interest on what we borrow at the same time we are leveraging at the rate of 2.5 to 1.

Leveraging or leverage is using borrowed money, sometimes called other people's money to make money. That is what you do in margin trading. Again the leverage ratio is 2.5 to 1. This cannot be changed. The interest rates vary. There is also a fee when you buy and sell. Poloniex takes 20% of the profits in order to operate the margin trading center. So, let's break that down:

2.5 times what you put up is borrowed
Interest is changed on what you borrow
Fees are changed when you buy and sell. The fees are 0.25/0.15 of a percent or lower if you trade more.
20% of what you make is charge when you hit the "Close" Button.
These fees are all calculated automatically and the amount shows up that you will get in the profit and loss box!

There are caveats to this, so pay attention to the course as I go through it so you will not make any mistakes that can be avoided.

If you have funny stories to put into the comments of this series - Thanks! Your comments are welcome.

Disclaimer

Last but not least, this is not an incentive or suggestion that you should invest, or invest in any way in any type of trading. This series in not a guarantee of outcome but rather the scenarios that trading presents that are most likely to produce certain results. In no way is the author, @jeff-kubitz responsible for any decisions you make to trade and you accept this upon reading this course and when you begin to trade.

My Qualifications

Remember, I have traded for years. I am finally starting to get good at it. If you decide you want to be a serious trader, you should spend ample time reading everything there is on the subject. When I started trading tokens, there wasn't anything written on the subject of trading cryptocurrency tokens. I sort of had to "wing it" from things I read about stock trading and commodities trading.

A good way to start trading is to go for the very low priced coins, like Doge, Stellar, Nexium. These coins are not worth very much, it takes many, many coins to get even a pennies worth with Doge coins for example.

All images are by @jeff-kubitz