Want to amplify your gains in the crypto market? Margin trading might be your answer. But before investing your funds, you must understand the mechanics, risks, and management strategies behind this powerful tool. This guide will help you master the core concepts of margin trading from scratch.
What is the Margin System? Understanding the Basics of Margin Trading
The margin system is one of the most important innovations in derivatives trading. Its core logic is simple: use a small amount of capital to control a large position.
Specifically, traders don't need to put up the full amount to buy a contract. You only need to deposit a portion of the funds as margin (usually 10% or less of the contract's nominal value) to borrow the remaining funds from the exchange or other market participants, greatly increasing your purchasing power.
This is precisely the close relationship between margin and leverage trading. For example, if