Bitcoin has firmly cemented itself as a desirable asset to trade. In its wake there are now experts, track records, data and proven brokers.
As such it is possible to scrutinise the crypto business from different perspectives, more precisely it is possible to compare different margin brokers in order to keep track of where to find the most favourable outcome. Using a bitcoin broker can get you a better margin on your trades.
In essence, keep track of the market by keeping track of brokers. There is being much written on margin these days as there is a lot to be gained from mastering its art. However, as margin trading bitcoin is volatile business it is wise to be cautious as well. The number one golden rule in dealing with cryptocurrencies, from an overarching perspective, is that knowledge and information is key.
Without reliable sources of information there is a high probably that traders will suffer great losses, especially if you are a beginner. Gathering as much information as possible about margin brokers is also crucial at this stage as it is predicted that there will be a surge in the market and that it is approaching rapidly. This has led to bitcoin receiving much attention from the media and has become a part of everyday financial repertoire.
Since reaching an all-time high at the beginning of 2018, bitcoin has never been more popular, attracting more and more traders every day. Believers in this peer-to-peer digital currency that may be transferred almost immediately while using public-key cryptography in addition to a PoWa algorithm in order to verify payments, is even arguing for bitcoin to replace gold as the number one store of value.
Even if there is a long way to go before that might be reality, there is a widespread trust in this cryptocurrency that is taking hold in society. That’s why making sure that you know what you’re looking for when it comes to the most beneficial margin broker is what’s going to make or break your success.
The nature of margin trading
Bitcoin is a highly-volatile asset, meaning that trading, more specifically margin trading bitcoin entails a lot of risks. It is wise to never trade more than you can comfortably stand too loose. It’s also wise to make sure that the bitcoin broker you use is conveying the necessary information in terms of market trajectories for you to be able to make informed choices.
As with all trading there are advantages and disadvantages when it comes to bitcoin. Some disadvantaged have already been mentioned such as the high volatility but then there is also the limited historical data and the lack of legislation to take into consideration. However, it is difficult to focus on these when the advantages are incredibly prominent.
The opportunity to diversify one’s investment portfolio is one of the frontrunners here, as is the fact that trading bitcoin is fairly easy compared to more traditional stockbroking. Especially margin trading is being favoured among many beginners.
What are then the characteristics that makes margin trading so popular? In essence this is how margin works. The main attractive aspect of margin trading is the fact that it allows the trader to open a position with leverage as opposed to standard trades which are traded with a leverage of 1:1. Usually margin trading is possible because there is a lending market available where lenders, or brokers, provide the loans, making it possible for the traders to borrow while they themselves make a profit from the interests.
Similar to trading in general, there are risks with trading with margin as well. For instance, the cost of the interest has the potential of becoming an additional burden if there are losses made while trading. That is why, again, one of the most important lessons to learn early on, is risk management. Risk management and choosing the best margin broker.
Some final thoughts
With many bitcoin brokers on the market to choose from, it’s difficult to determine which one is the most suitable for your own needs. However, there are a few key factors that may assist you when deciding.
First, location. It doesn’t matter how good your bitcoin broker is if it doesn’t operate in the region that you yourself are in or if the verification process is lacking. Second, trading fees, it’s important to make sure that the going rate is within the accepted standard. Third and fourth, transparency and security for obvious reasons and finally there needs to be deposit and withdrawal limits in order for the broker to make sure that supply and demand may be met.
This is of course by no means an exhaustive list, when choosing a broker, individual preferences is also important as is the ever important knowledge of different options available, i.e. make sure you know your margin broker market before starting to trade.