Margin trading cryptocurrency is a quick yet complex approach to grow your account quickly. Many traders find it difficult to compete with the market. Therefore, we’ve compiled a list of ten suggestions for lucrative margin trading for those who refuse to accept liquidations. When you read all the tips and get acquainted with margin trading you can start margin trading on the CEX.IO broker platform.

It’s all about Risk Management

The best piece of crypto margin trading advice you’ll ever get is to control your risk

While it may not look so, you’re likely not sufficiently risk-averse, leaving your account open to significant losses and possible liquidation.

Every margin trading method that exists is essentially about risk management. Margin trading is dangerous in and of itself. As a result, you must understand when and how to take risks and when and how to entirely de-risk to be successful.

Do Not Double Down on Loses

It’s easy to double down on a diving position out of pride. As the red candle becomes more extensive, you’re probably thinking that there will be a turnaround at some time, allowing you to recoup your losses in one trade.

It’s easy to double down on a diving position out of pride. As the red candle becomes more prominent, you’re probably thinking that there will be a turnaround at some time, allowing you to recoup your losses in one trade.

Instead, because cryptocurrencies are highly volatile and prone to the massive downside (just as they’re prone to the monstrous upside), consider cutting losing positions early, especially if you have open positions in other coins in profit.

Avoid Dogmas and other Fixed Beliefs

Every trader has an opinion about the market’s direction. Taking a long or short leveraged position in BTC or any other cryptocurrency is inherently risky.

There is, however, a distinction between having an opinion about market direction and being adamantly committed to a viewpoint. Let’s say you decide to go long Bitcoin after conducting the necessary technical analysis and determining that BTC is poised to rebound off of a long-term support level.

The bounce arrives, but it comes at an implausible volume and fades soon. An astute and flexible trader would detect this and consider taking a little profit on their long position to sit on the sidelines and watch the price develop further.

Another sort of trader, totally committed to a permabull thesis, would notice this and other evidence to the opposite of the bounce and use mental gymnastics to rationalize it all back into their bull thesis.

A profitable long trade quickly becomes a blown-out transaction, which can be avoided if the trader remains belief-agnostic.

The best method to trade cryptocurrencies is to keep an open mind: anything can happen, so expect the unexpected.

Stop Overtrading

Overtrading is a common mistake made by both new and seasoned traders. To be clear, refusing to take a position is the same as taking one.

The idea is that staying on the sidelines is the same as going long or short in the market; you’re acting on your assumptions about the market. When you look at it this way, you’ll probably feel less compelled to enter the market without a compelling reason.

Minimizing your trades to the essential ones is possible by letting price action unfold and develop while observing it unemotionally. Instead of chasing every green candle that appears on the horizon, you’ll be ready to act on the best crypto trading chances when they emerge if you stay detached from the market.

Understand How the Crypto Market Moves

Like every other system on Earth and beyond, the crypto market goes through cycles. Cycles, often known as trends, are directional forces that sweep price movement in one direction or another.

Due to market cycles, there are bull, bear, and flat market circumstances. As a crypto trader, it’s your responsibility to know which epoch the market is in at the time of your transaction and be aware that cycles can change quickly.

There can be smaller counter-intuitive cycles (such as a multi-year uptrend). Smaller counter-intuitive cycles, such as bear markets within bull markets, are possible. Because of the nature of periods, this is the case. Market analysis based on shorter timeframes is always more speculative and erroneous than market analysis based on longer timeframe trend analysis.

The more risk-averse traders will take positions based on long-term trends rather than short-term movements, as the latter is much more difficult to predict.

The Trend is your Friend

We’ve all been there: the market is heading in one direction, but you’re hesitant to join in with the rest of the traders. As a result, you decide to “counter-trade” the market by taking a position against the current trend.

During times of strong trends, this, my friend, can be a disastrous thing to do. When the market is bullish, it just goes up, as reductive and oversimplified as that may sound. The same can be said for the other way around.

The message is that when the market exhibits a strong pull in one direction, much like a strong tide at the beach, it’s frequently best and easiest to go with the flow simply. After all, evidence cycles with strong direction are uncommon enough that you should take advantage of them while you can.

Understanding the Technical Analysis is Key

Are you familiar with the terms “support” and “resistance”? What are the practical applications of the RSI and MACD indicators?

When you’re margin trading cryptocurrency, you’re employing technical analysis, an integral part of risk management.

You’re flying blind in the crypto market if you don’t have a robust technical analysis skillset. Technical analysis may help you determine when to start and exit a trade, where to set a stop-loss order, and how to spot long/short squeezes that could liquidate your position.

Furthermore, understanding how to use TA will assist you in developing a strict trading game plan that you can follow and execute without making superfluous mistakes that waste time and money.

Do Not Forget About Fundamental Analysis

While technical analysis is essential for any crypto trader, having a solid grasp of a project’s fundamentals can be necessary if you’re looking for a longer-term trade.

Even if you have no clue whether a currency performs or whether a project is making progress in its field, you can at least keep up with the news.

Reading Coindesk or Cointelegraph daily is an excellent way to keep up with some of the more significant, more essential events shaping price action wildly when unforeseen circumstances, like lawsuits, are bubbling up.

If you were trading XRP solely based on technical analysis, you would have been caught off guard by the abrupt SEC lawsuit announcement, which resulted in a dramatic drop in pricing. Unaware of the news, some traders bought the dip and were swiftly rekt.

A well-rounded trader is always well-versed in both the fundamental and technical components of a transaction.

Crypto Margin Trading is not Something to Set and Forget.

The distinction between spot and margin crypto trading is that the former can be left alone (depending on the trade’s period), while the latter requires active management.

You can’t long ETH and then walk away — no, that’s a recipe for disaster. Trading crypto on margin requires day-to-day management to avoid getting rekt. Suppose you aren’t fully committed to your trade because you’re prepared to move on it at any moment. In that case, you won’t be ready to cut your losses early, leading to more significant and avoidable losses later.

Wise cryptocurrency traders always close their holdings before going on vacation or to a location where they won’t have access to the internet. It would be best if you closed your positions before going to bed, depending on the nature/timeframe of your transaction.

Never go All In

Going all-in is cardinal sin number one in the land of risk management.

Now, write this down and stick it to your trading setup’s wall. Never put everything on the line.

Going all in is the surest way to become bankrupt, drain your account, and kick out the crypto trading game. Remember that a successful crypto trader has been in the game for a long time.

The longer you stick it out in crypto trading, the more likely you succeed. Otherwise, your savings would have run out a long time ago. Maintain a reserve of funds to leverage your way into or out of difficult situations — something you won’t be able to do if you’ve just spent your last satoshi on a degen deal for Twitter clout.