#CariKataKripto day 03

On the third day of the crypto word search event, I found 3 words namely Leverage, Margin, and Liquidation. These terms are familiar to crypto traders, especially those who are active in Futures trading. I will briefly explain the meanings of the words in the table.

Leverage:

Is the use of borrowed funds to increase potential profits and losses in cryptocurrency trading. With leverage, traders can open larger positions than the capital they have, thus potentially achieving higher profits, but also at greater risk of incurring losses. Leverage allows traders to amplify their trading positions without having to use all their own capital. For example, with 10x leverage, a trader can control a position worth 10 times their own capital.

Margin:

Margin in crypto trading is a trading method that uses borrowed funds to increase positions and potential profits, but also increases the risk of losses. This is similar to buying stocks on margin, where you borrow funds from a broker to amplify your investment. In margin trading, traders borrow funds from the trading platform to buy more cryptocurrencies than they could with their own capital.

Liquidation:

In the crypto world, liquidation is the forced closure of a trading position caused by significant losses or insufficient margin to support that position. This usually occurs in margin or leverage trading, where a trader borrows funds from the exchange to increase their position. If the asset price drops below a certain point (liquidation price), the exchange will automatically close the trader's position to prevent further losses.

Come join #CariKataKripto to expand your knowledge about the world of crypto trading; there is a lot of new knowledge you can gain. See you on the next day.