Hi Everyone.
I'm new to this platform and this will be my very first post on Steemit and I hope that the information and experiences I share will be of use, especially to people who are new to the cryptocurrency space.
In a nutshell, margin trading is borrowing in order to buy cryptocurrencies, with the hope that the price will go up if you hold a long position and that the price will go down if you hold a short position. Since you have borrowed funds to hold a position, it's in your interest that the price of the digital asset you are holding, won't fluctuate past a predetermined point, because if it does, it will be liquidated, resulting in a loss.
What makes margin trading so attractive?
You finally bought your crypto and distribute them into your portfolio, when suddenly the gambler in you decides to crunch up some numbers and figure out how much money you're going to make if you leverage some X,Y or Z coin that's "hot" right now and trending. The thought of cashing in at a faster rate (1,2,3,4,5....x) is mind boggling and very tempting to say the least and the thoughts of getting lucky by placing money on the right crypto start to creep in.
I think this feeling is normal for anyone that has started out in the cryptospace and is looking to dramatically increase their wealth. Fast results are more attractive than slow results and the stories and legends of people who bought Bitcoin early on, certainly do their part in creating a sense of urgency for newcomers. Who would not like to invest a few thousand dollars and have millions in a matter of months or a few short years? It is my belief that intense human desire, coupled with the right propaganda, can certainly spell disaster for any new trader that jumps on the scene. The concept of making money has never been so embedded in our culture as now, and other economic and political world events have just added more fuel to the cryptofire I have seen over the last couple of years.
It is evident we are entering a new and exciting era in business and technology that lots of people will soon want to be part, but just remember to guard your investmensts and don't jepordize any digital assets you own, just for the sake of making a few extra bucks in the short term. I think lots of new traders who have decided to margin trade, have been left out in the cold at one point or another and that is not a nice feeling.
I hope everyones holdings multiply very soon and thank you for your time.