Margin trading is to magnify the principal several times, that is, getting the multiple returns with 1x principal. BW can support the principal up to 20x position, to magnify the return 20 times, but at the same time must bear the doubled risk of possible loss. Due to fluctuated price of digital assets, please understand fully the risk before trading.
How buy long to earn?
Eg: BTC/USDT, if we predict that the price of BTC will increase, when you have 10000USDT in the account, you can borrow up to 190000USDT. When BTC price is 10000USDT currently, you can buy 20BTC with unit price 10000USDT. Then, when price increased to 20000USDT, we can sell BTC and earn profit 200000USDT, that is 20BTC*（20000-10000）=200000 USDT.
How sell short to earn?
Eg: BTC/USDT, if we predict that the price of BTC will decrease, when you have 10000USDT（0.5BTC） in the account, you can borrow up to 9.BTC. When BTC price is 20000USDT currently, you can sell 10BTC with unit price 20000USDT. Then, when price decreased to 10000USDT, we can buy BTC and earn profit 100000USDT, that is 20BTC*（20000-10000）=200000 USDT.
What is the risk of margin trading?
Margin means limited principal to reach enlarged profit. But if your prediction is wrong, the loss is enlarged at the same time. So ordinary traders should avoid high position in margin trading in order to prevent the liquidation.
How to reduce the risk rate of margin trading?
1.Reasonable usage of margin multiples to control the position.
2.Take profit and stop loss in a timely manner and liquidate spontaneously.
3.Increase funds timely to make sure the ratio (total asset/margin quota) is over 102.5%.
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BW, Bit World, Better World
BW.com Global Operations Team
December 7, 2019
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