1. Margin trading is a method of trading assets using funds provided by a third party. When compared to regular trading accounts, margin accounts allow traders to access greater sums of funds, allowing them to leverage their positions.
2. Essentially, margin trading amplifies trading results so that traders are able to realize larger profits on successful trades. This ability to expand trading results makes margin trading especially popular in low-volatility markets, particularly the international Forex market. Still, margin trading is also used in stock, commodity, and cryptocurrency markets.
3. In traditional markets, the borrowed funds are usually provided by an investment broker. In cryptocurrency trading, however, funds are often provided by other traders, who earn interest based on market demand for margin funds. Although less common, some cryptocurrency exchanges also provide margin funds to their users.
Remarks: What is position?
A position means money. The detailed meaning is all receipts and payments on one day, the income is greater than the expenditure, it is called a "long position", if the payment is greater than the income, it is called a "short position". The behavior of predicting more and less of this type of position is called "position rolling". The act of trying to transfer money everywhere is called "position adjustment". If the temporarily unused funds are greater than the required amount, it is called "loose position", and if the demand for funds is greater than the idle amount, it is called "tight position".