IMPORTANT TIPS FOR CRYPTO MARGIN TRADERS

18/03/2022

By Damilola Ogungbayi olushola

Key points

• Get Reward From Margin Trading
• What is Margin Trading
• Three Important Advices For Crypto Margin Traders

GET REWARD FROM MARGIN TRADING

Binance Margin is now running the Funday Friday
Campaign, in which eligible users could share 20%
Margin trading fee every friday.

The Binance Margin- Funday Friday is a new and ongoing promo feature on the Binance Exchange that allows all Binance Margin traders who are eligible to enjoy and claim a share of the 20% trading income of Binance Margin. The Reward amount is based on the user’s average daily margin trading and borrowing volume as a proportion of all eligible users’ average daily margin trading and borrowing volume.

This is another one of the many initiatives that Binance is continuously employing to give back to its traders to show appreciation for the trading activities of Binancians.

This promo started from Friday Jan 14 2022 09:00 (UTC) and will continue until further notice.

WHAT IS MARGIN TRADING

Margin trading is a method of trading assets using funds provided by a third party. When compared to regular trading accounts, margin accounts allow traders to access greater sums of capital, allowing them to leverage their positions.

Essentially, margin trading amplifies trading results so that traders are able to realize larger profits on successful trades. This ability to expand trading results makes margin trading especially popular in low-volatility markets, particularly the international Forex market. Still, margin trading is also used in stock, commodity, and cryptocurrency markets.

In traditional markets, the borrowed funds are usually provided by an investment broker. In cryptocurrency trading, however, funds are often provided by other traders, who earn interest based on market demand for margin funds. Although less common, some cryptocurrency exchanges also provide margin funds to their users.

THREE IMPORTANT ADVICES FOR CRYPTO MARGIN TRADERS

1.Keep an close eyes on your margin level.

Binance uses the margin level to evaluate the risk level of your Margin Account.

Margin Level allows you to know how much of you funds are available for new trades.

As a crypto margin trader, Have some back up funding for crypto margin trading. When a user unfortunately gets it wrong and requires a margin call, a greater buffer of back up funding will be able to let the investor ride out the undesired outcome instead of being forced to liquidate due to lack of collateral. The way to protect against that is to have back up funding. Crypto margin traders should always be alert for when the margin level gets low inorder to avoid a margin call. A margin call occurs if your account falls below the maintenance margin account

2.Make good use of the cooling-off period:

Binance has launched the Cooling-off Period for margin trading. The Cooling-off Period allows users to temporarily suspend all margin trading activity for a specified period. Users can set a Cooling-off Period of 1 day, 3 days, or 1 week as per their needs. During the Cooling-off Period, margin accounts cannot be used to borrow any cryptocurrencies.

When to use the Cooling-off Period?

• You can use the feature to limit and control your trading activities, especially in situations when you feel pressured by losses;
• It enables traders to abstain from behavior and activities that can lead to irresponsible trades.

How to enable the Cooling-off Period for margin borrowing on Binance

1. Login to your Binance account. Click [Wallet] - [Margin]. Next, click [More Data] - [Borrowing Cooling-off Period].

Alternatively, you may click [Trade] - [Margin] to enter the Margin Trading page. Click the [⋮] icon on the order entry panel and select [Borrowing Cooling-off Period].

2. Select your preferred duration and click [Confirm]. You can choose “Today(1 day)”, “3 Days” or “1 Week”.

3.Please note, the borrowing function cannot be turned on during the Cooling-off Period. Click [Confirm] to disable your margin borrowing.

3.Make plans for using Isolated or Cross Margin account:

As a Crypto Margin trader always make plans for using Isolated or Cross margin account

Isolated Margin mode allows traders to restrict the amount of margin allocated to each position and only the balance used as margin gets liquidated.

Cross Margin gives traders far less control of the available balance, but it automatically margin adjust function can prevent liquidation.

CONCLUSION

Certainly, margin trading is a useful tool for those looking to amplify the profits of their successful trades. If used properly, the leveraged trading provided by margin accounts can aid in both profitability and portfolio diversification.

As mentioned, however, this method of trading can also amplify losses and involves much higher risks. So, it should only be used by highly skilled traders. As it relates to cryptocurrency, margin trading should be approached even more carefully due to the high levels of market volatility.

To get started with Binance margin trading, click the link below

https://www.binance.com/en/trade-margin/BTC_USDT?ref=331234001

To learn more and join the Binance funday Friday click the link below

https://www.binance.com/en/margin/margin-happy-friday?ref=331234001