NEW Series Premiere: Margin Trading Education, Episodes 1 & 2
Welcome to the new Trading Education series at Sifchain. The goal of this educational series is to empower you to feel confident trading on a decentralized exchange.
The videos & accompanying content will review key skills you need to be successful in all crypto trading. They will also have a special focus on margin trading so that you can learn to trade using Sifchain’s Margin Trading platform with ease.
New videos & Medium content will be released on a weekly basis. Turn on YouTube notifications to get notified about new videos and join the Margin Newbs channel on Discord to meet other traders.
Margin Trading Education Episode 1: Introduction to Margin Trading
In the first episode of the educational series Margin Trading for Beginners, Sifchain Discord Community lead and former degenerate perpetuals trader @Nomad walks through an example showing the difference between spot trading and margin trading.
Key Concepts from Episode 1
- Margin trading is trading with more assets than you actually have.
- Exchanges give users the opportunity to borrow money to increase their trade size. Common leverage multiples are 2x, 5x, 10x, and up to 100x.
- Collateral is the original investment the trader commits to the exchange in order to borrow funds.
- Higher leverage means much higher returns if the trade moves in the direction the trader wants, but it also means higher risk of losing more assets if the trade is not successful.
- Gains are higher because a winning trader keeps their collateral plus the extra gains they earned by using borrowed funds.
- With margin trading, losses happen as fast as gains. Liquidations occur when the loss exceeds the trader’s collateral. A trader loses their entire collateral when a liquidation event occurs.
- Interest fees apply to all margin positions. On the Sifchain platform, interest fees go to the poolers on the DEX and to a project support fund.
Sifchain’s Margin Trading platform takes a unique approach to generating revenue for poolers & the protocol. Read about DeFi with Real Revenue on Medium.
Margin Trading Education Episode 2: Technical and Fundamental Analysis
Episode 2 of Margin Trading education covers the two main types of analysis that traders use to evaluate whether they believe the value of an asset is likely to go up, down, or stay the same over time.
This episode gives a high-level introduction to technical and fundamental analysis. Advanced traders will perform extremely complex and nuanced TA & FA to make precise calls with high accuracy.
These tools will be as good as the trader who uses them. Practice with these tools to improve your trading calls over time.
Key Concepts from Episode 2
- Fundamental Analysis (FA) seeks to determine the intrinsic value of a token by looking at internal and external forces that govern its value.
- Factors used in FA include evaluating the overall value the project brings to the ecosystem, the utility of the project, its tokenomics, its community, the need for the technology the project offers, and the strength of the team.
- FA is best for long-term holds you feel have a bright future.
- Technical Analysis (TA) involves using mathematical indicators to evaluate trends and predict the price of an asset. TA uses past price data and volume data to make these price predictions.
- One common aspect of TA is reading charts, and another is understanding how historical trends form the basis of indicators.
- TA is good for short-term investments, like a fast margin trade, because it doesn’t require a trader to spend time learning about a project. Mid-to-long term trades require a mix of FA and TA.
Coming Up Next
In next week’s episodes, Nomad goes straight to the charts to show you how to read candlesticks and chart patterns to identify trades.
Turn on YouTube notifications to get notified about new videos and join the Margin Newbs channel on Discord to meet other traders.
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Media & content creators, contact us at communications@sifchain.finance.
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