RE: READ NEW INSTRUCTIONS! | Steemit Crypto Academy Season 2 Week 3: Trading and Holding - Two Sides of a Coin
Good day Prof @alphafx.
Thanks for the well delivered class. You really explained in details. This time, I understood 90% of your explanations nevertheless, I have a question.
You gave us the steps in carrying out cross margin and isolated margin trades. You said we should transfer the money we want to trade with to margin trade but in your explanations, you said we should still select borrow. Do we have to select borrow when we have money to trade on margin trades?
What is it the percentage of profit or loss on Binance margin trade? How is it calculated for traders?
There have been up to two times I had borrowed given USDT of 500 with 0% by binance in the reward center. In one of those times, I claimed it but could not see it any where in my margin wallet, so I didn't do anything with. Though I didn't know how to trade there. When next I am given, how do claim it successfully to see it for trades?
According to my experience in margin, the house always wins, since I use margin on several occasions to experiment and end up losing 90% of my capital, what I did realize is that binance keeps a large part of the profit, BECAUSE DO I BELIEVE THIS? I put $ 200 in margin and at the exchange they lent me 2000 usdt plus the $ 200 that is my capital was a total of $ 2200, my investment put it in the BNB / USDT pair I bought the BNB at $ 512 and sold at 522 $.
This means that I bought 2,200 / 512 = 4,296 BNB and I sold at 522 * 4,296 = 2,242.96, which in theory gave me a profit of $ 42, but the reality is that, when I paid the loan, I had only earned $ 4.2.
Then I made another loan I had the same $ 2,200 again and bought BNB at $ 518 but the currency had a sudden drop and reached $ 497 I received a message first on the phone saying that the losses in margin were high, but instantly it came to me Another message that they had canceled my orders to prevent me from going bankrupt.
So my question is:
When I invested the first time in the BNB / USDT pair, the BNB went up $ 20 and my profit in theory was 42 but I received only $ 4.2 when I paid off the loan; So where is the remaining $ 37.8?
My second investment I invested in the BNB / USDT pair and the currency had a fall of $ 21 and automatically binance canceled my orders and I lost half of my money only reflected $ 100 in my balance, now I ask myself another question; When I win the 42 and received only $ 4.2 it is not supposed that if the coin goes under $ 21 it should not lose $ 4.5; So where is my other $ 95.5?
The reward that binance gives to use it in margin will never be reflected in the balance since the function of that reward is to pay commissions that each operation you do in magin carries, which means that each operation that binance makes charges you 0.01 % of the amount you are trading. With the 500 USDT you will pay those commissions that will not be deducted from your real balance.
NOTE: Operating in margín is risky, you have 80% of losing your money if you do not know how it works since I made the mistake of operating there without knowing much about magín loans.
In conclusion, in margín binance operates with your money they will never have a loss with your operations, the loss will come out of your pocket, but binance if it takes a large part of your profits, advice do not use margín.
@ruzmaira... Thanks so much for the enlightenment.
I think this is enough for my questions.
On the other hand, I think with proper understanding, one can really gain from it. I am not planning on trading on margin though.
Good idea, it is not recommended to trade margin call, if you want to trade on margin, I recommend the bot of future on Binance. This bot is more profitable than operating on our own account. I have seen how some users have taken a large profit in the future through bots.
The advantage of the bot is that you can adjust the loss margin you are allowed to lose.
I am just seeing this, well explained. @tmighty do you have anymore questions?
No Prof