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«Commerce as a professional: the benefits of using isolated margin in cryptocurrency trade»
For years, cryptocurrency trade has been a child trip for investors and merchants equally. With the prices that collapse and shoot in an instant, it is not surprising that many have been trapped in exaggeration. However, a technique that can help level the playing field is to use isolated margin in cryptocurrency trade.
** What is the isolated margin?
The isolated margin is a type of margin that is marketed in which funds from its brokerage account borrow, but only for the specific asset that is operating, instead of all its assets at the same time. This means that if your brand goes against you, you will only lose the amount borrowed, while your other investments are protected.
** How does the isolated margin work?
Here is a simplified example:
Suppose you have $ 10,000 on your brokerage account and want to buy 100 Bitcoin (BTC) units. However, you do not want to risk any additional capital beyond this. Instead, use an isolated margin with a corridor that offers a 1: 2 relationship of margin to equity. This means that you can borrow $ 20,000 from the corridor, but your real commercial account is limited to $ 10,000.
Benefits of use of isolated margin
The use of the isolated margin has serious benefits for cryptocurrency merchants:
* Reduced risk : By limiting your exposure to a single asset, you are less likely to lose money in that trade if you are not in your favor.
* Increased liquidity : runners offer isolated margin accounts with more capital available than traditional margin accounts, which facilitates to assume greater risk and increase their commercial potential.
* Flexibility : The isolated margin allows you to adjust your margin levels up or down as necessary without affecting other parts of your account.
** Is decentralized finances (defi) a safe bet?
While Defi has gained popularity in recent years, it is not necessarily a safe bet for cryptocurrency merchants. The projects are often not regulated and may be subject to high volatility, which makes them particularly volatile for merchants who do not understand the underlying risks.
However, some DEFI protocols offer margin trade opportunities that allow merchants to use their own funds or borrow other accounts from competitive interest rates. These platforms also provide tools such as detention orders and position size to help merchants manage their risk.
Conclusion
The use of isolated margin in cryptocurrency trade can be a powerful tool for investors who wish to reduce risk and at the same time increase their possible yields. However, it is essential to understand the risks associated with the Defi projects before getting involved. When choosing accredited runners and understanding the mechanics of the isolated margin, you can trade as a professional and achieve its financial objectives.
resources
* Runners that offer isolated margin accounts: ETORO, Robinhood, Fidelity
* DEFI protocols for margin trade: Compound, AAVE, Balancer
* Regulatory guidelines for defi: sec, ease
By learning more about the isolated margin and the DEFI, you can take control of your commercial cryptocurrency experience and make informed decisions to achieve your financial objectives.
