A multiplier is a tool that allows you to multiply your trading capital. It is also called leverage. That is, it is a credit amount of money (margin) that you can take when opening a position on the stock exchange.
This credit amount is labeled from 2x to 100x. That is, you can multiply your balance by 2x or 100x. A small commission is charged for the use of this multiplier, but you keep all the profit from such a deal.
The main advantage of trading with the multiplier is that you will earn many times more with it than without it.
Example of trading with a multiplier
Now we have a general idea of what a multiplier in trading is. But to understand how it works, let’s look at some examples.
Let’s say a trader wants to open a 30 USD position with a multiplier of 40x. He makes a deposit of 30 USD, then selects a multiplier of 40x and opens a position. So the total amount he is trading has increased to 1200 USD from the original 30 USD.
30 USD x 40 = 1200 USD
If the market is analyzed correctly and a position is opened according to the trend: Long or Short, the trader will take all the profit.
Spot Trading VS. Margin Trading
Spot and margin trading are one of the main types of trading in the cryptocurrency market.
Spot is only suitable for long-term trading and investing. Margin trading, on the other hand, is ideal for short-term traders who are not willing to wait for years for profits.
When buying cryptocurrencies on the spot, such as BTC, a trader can easily withdraw the coins to third-party wallets. In margin trading, there is no such possibility. Since the multiplier increases the size of the position, you cannot withdraw assets from the exchange, which are used in the position, until the same position is not partially or completely closed. Only after the position is closed – your assets, including the profit from the deal, will be available for withdrawal.
The main disadvantage of spot trading is the inability to open a Short position. When trading using a multiplier, a trader can trade flexibly and adjust to market cycles much more effectively. If a trader knows that the market will fall, thanks to technical and fundamental analysis, he can capitalize on the price drop. It is enough to open a Short position and watch the fall. In spot trading, it is impossible to make money on the price drop.
The main difference between spot and margin is that you can make money on the market fall only with margin trading. There is no such possibility on the spot.
Many traders do not have enough capital for spot trading. In such a case, they cannot count on large profits. This is where the ability to multiply the balance using a multiplier comes in handy. Also, you don’t have to wait for a long time to get +100% profit. On margin trading, you can earn much faster than on a spot.
However, despite all the advantages, margin trading is a more risky type of trading. As there is a probability of position liquidation. It is important not to be greedy and take the profit that the market gives you without waiting for a bigger sum. Or exit with a small minus if the trend is not in your direction, rather than waiting for you to get lucky and the trend will change.
The disadvantages of margin trading include the commission for financing. However, MOVO often has interactive events and drawings, where this commission is removed or reduced by 90% for a while. It is enough to follow our social networks.
So, to make quick money on trading and on any trend (up and down) you will need margin trading (trading with a multiplier)!
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