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Have you ever wondered what "short selling" is in the world of margin trading? Well, here’s a simple explanation: it’s a strategy that allows traders to made money even when prices go down. Sounds interesting, right? Basically, the process involves borrowing an asset, selling it, and then buying it back when its price drops. This way, you keep the difference between the price at which you sold it and the price at which you bought it back.
Leverage, a technique that can increase both your profits and your losses, is key here. So it's always a good idea to stay alert, closely monitor prices, and be cautious when short selling. The risks are significant, and proper management can make a difference.
So, how is short selling done? Imagine you decide to use a trading platform. The first thing is to move your collateral to the margin account. This is simple: you can do it manually or activate an automatic function. Then, you select the asset you want to short sell and request a loan—here you can choose an automatic process to speed things up.
It is essential to follow price movements, from the moment you sell until you are ready to buy out again. To protect yourself, use tools like stop loss and take profit orders. Finally, when the price drops, you buy the asset again, pay off the loan with interest, and close the position.
Now, here comes a very important point: before you dive in, make sure that the size of your position is appropriate according to your funds and risk-taking capacity. Margin positions are managed at the token level, and the maximum they can lend you is linked to your collateral and other variables.
Are you interested in delving into the world of margin trading? You can explore more about how leverage and positions work in the market. And remember, although you can made money, you could also lose quite a bit if you do not manage risks properly. So, analyze well, monitor closely, and manage intelligently. Happy trading!