Hi prof. @stream4u, i am glad to learn from you once again. Your lessons have always taught me so much. thanks for lecturing us week by week. I am also very happy to add my submission to this weeks task.
> What Is Crypto Margin Trading?
Margin trading is when you deal with borrowed money or funds in order to increase your earnings. A cryptocurrency exchange will lend you money.
When you trade on margin, you borrow money or funds against the money or funds you already have in your account. It entails borrowing money at a relatively high interest rate in order to maximize your earnings. Margin trading allows you to maximize your purchasing power while still increasing your profit potential. If the market and trades shift in your favor , margin trading will undoubtedly boost your income and leverage, but it also comes with the possibility of increased losses.
<center>[source](https://timestampmag.com/2020/02/25/major-crypto-investment-trends/)</center>
Leverage is at the heart of crypto margin trading. Margin trading is a form of leverage used by traders. When you trade cryptocurrencies on margin, you get more purchasing power or selling power by leverage. Leverage allows an individual to exchange positions that are greater than their trading account balance.
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Exchanges that provide the best Crypto Margin Trading:
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* BINANCE
* COINTREE
* BitMEX
* POLONIEX
* Kraken
* Houbi
Advantages
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* Increased buying power is one of the advantages of Margin trading which is the ability to control a much greater position by borrowing from your broker rather than using your current equity is the most obvious advantage of margin.
*It also allows you to construct a portfolio with greater versatility.
Disadvantages
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* Lets talk about the risk involved. Being able to control a much greater role than average means that not only your gains, but also your losses, would be larger. This is why, when using margin, you must exercise extreme caution and adhere to very strict risk exposure and money management guidelines.
* It is also very stressful.
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> How To Plan For Trading In Crypto Margin Trading.
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Margin trading is a high-risk investment technique that is based on short-term market fluctuations. Before you start margin trading cryptos, you should consider the following activities and strategies to help you plan
* Increasing trade size: it's better to start with smaller position sizes and lower leverage to gain a solid understanding of the process.
* Get to know the fees and interest involved before: You will pay interest on the capital you borrow when you open a leveraged position. Margin trading of cryptocurrencies entails ongoing fees that can eat into your income rapidly.
* Lower your risk and set a target: When it comes to margin trading, you should have a clear risk management plan. This plan should set a simple profit target, which you should adhere to. It's critical to set stop-loss thresholds and stick to an exit strategy.
* Try to use demo-trading before you start the real one : New traders can practice trading in a simulated trading environment with demo trading. While demo trading platforms do not accept real money, they do represent current market prices. New traders can use demo trading to test their strategies without losing their own money.
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> Crypto Exchanges Name That Provide Margin Trading Service and What Margin They Provide?
**BINANCE**
Cross and Isolated margin up to 10x
**POLONIEX**
Cross and Isolated margin up to 5x
**KRAKEN**
Margins - up to 5x
**HUOBI GLOBAL**
Cross margin - 3x
Isolated margin - up to 5x
**BitMex**
Cross and Isolated margin (up to 100x)
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> What Is Leveraged Tokens Trading
A leveraged token allows you to participate in a leveraged trading position in a digital asset without having to deal with the hassles of managing a margin trade.
ERC20 tokens that reflect a leveraged long or short position in a cryptoasset are known as leverage tokens. The key benefit of these new crypto derivative tokens is that they allow you to take leveraged positions without worrying about collateral, funding rates, margin management, or liquidation.
They've gotten a lot of attention since their launch because of their relative simplicity.
We must also know that Leveraged Tokens are not meant to be held. Also Binance offers Binance Leveraged Tokens (BLVT) with a leverage range of 1.25x to 4x.
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Advantages
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* Leveraged tokens can be transparently tracked and kept in a personal Ethereum wallet since they are found in the Ethereum blockchain as ERC20 tokens.
* It enables users to profit from market volatility.
* To avoid liquidation risk, they automatically reinvest the earnings and sell some of them if the market is down.
Disadvantages
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* The level of transparency provided by leveraged tokens is determined by the exchange you use.
* They're very risky. If you don't know enough about Leveraged Tokens before investing in them, you might lose money. It is not recommended for new traders.
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> How To Plan For Trading In Leveraged Tokens?
Trading in leverage tokens requires proper planning since the risk involved is very high. If incase you are using this method of buying a leveraged token as a long-term investment. Long-term investing in leveraged tokens can seem very deceiving. Since there are major risks involved in doing so. Many investors are unaware that leveraged tokens are rebalanced and re-leveraged in response to market movements. As a result of how the compounding effect functions differently, the long-term success of leveraged tokens is uncertain.
Trading a leveraged token makes more money than trading spot and margin. However, if you misinterpret the market and the price rises/falls in the opposite direction, you might lose a lot of money. So in this one has to be very skilful in reading the price predictions.
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> Crypto Exchanges Name That Provide Leveraged Tokens Service and What Margin They Provide In Leveraged Tokens?
**Binance**
Up to 4x leverage
**Polonix**
Up to 3x leverage on leverage tokens
**Huobi Global**
Up to 3x leverage on leveraged tokens
**Coinbase**
Up to 3x leverage
> Price Forecast For Crypto Assets XXXXXX. (This is similar question from last course, take any Crypto Assets Chart graph, as per its current price and its market trend predict its future price for only next week, what will be its future price for next 1 week. You can predict for any direction up or down but explain it properly on what basis you have predicted the price. What will be the possible low level and high level for next week.).
Lets take a recap on what price forecasting is before we continue. In my previous homework for prof.@stream4u i defined price forecast as a way of estimating an asset's future value. In my previous assignment i used BTC to illustrate the trend of the price forecasting. In todays homework i will use doge coin. Doge coin has risen above thoughts for the past days or weeks.
In analysing the above graph of doge coin lets take a look at its resistance level and support level which will help me analyse the trend. The blue circled spot is called the resistance level which dipped down to the support level which is the green circled in order to move up again. Doge coin started off not long ago and as of last 2 weeks doge was around 0.2-0.22 which is now 0.6391 as at now. In our last lesson on price forecasting we learnt there are 3 types of price forecasting and we had, fundamental, technical, sentimental analysis.
Doge coin is one of the tokens that uses the sentimental way of analysing to push its sale. Sentimental analysis is the type where traders take advantage of the fact that any new information triggers a price rise or decrease of the coin. Doge coin has been under the influence of the media and some prominent people. Looking at the recent wave and hype it is getting and also so many celebrities pumping so much money into it. I see doge to rise to reach $1 in the next coming weeks. If doge is able to reach a dollar in the coming weeks then it has a huge potential to reach 2-3$ in the comings months.
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Conclusion
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Its been such a wonderful lecture. I have always learnt so much from your lectures. Keep up the good work.
Thank you
@stream4u