On some exchanges, you can also margin trade, and leverage your holdings. Take Bitmex – one of the leading leverage exchanges – for example, you can margin trade and leverage your Bitcoin up to 100x. Therefore, if you had 1 BTC you can now trade with 100 BTC. Leverage gives the trader the ability to make nice profits, and at the same time keep risk capital to a minimum.
But be careful! This isn’t a win-win situation. Leverage is a double-edged sword. Without proper risk management, your holdings can be liquidated if your trade falls below a pre-determined rate.
At present, the Coin Market Cap sits around $200 billion dollars with an average of $10 billion traded daily. Although these numbers are low compared to say the Forex Market or Stocks, the major market leaders are very liquid. Basically, with a click of a mouse, you can instantaneously buy and sell as you like, and your orders will be filled instantly.
Be careful though, buying into coins with low volume, may lead to you kept bagholding a coin, and you may need to sell at a loss to help liquidate your holdings.
ANYONE CAN TRADE
The beauty about trading cryptocurrency, is that anyone can trade, (well technically you should be over 18). You can also start with any amount that you want to build up your kitty. You can start as low as $1 if you really wanted to, just to get a gauge of an entry point. I would strongly recommend not going down this path, if you want to be a real trader, but it is all well and good if you are getting a feel for how exchanges work and understanding how cryptocurrency trading works.
Interesting hey? Does this sound up your ally? Let’s move on to Crypto Trading 101.