#CFX Spot Trading is for poor people and Future Trading is for rich people 📉📈, the best joke I heard till now 😄.
People saying the opposite 🔄. Leverage (a.k.a Loan-Contract-By-Broker) for rich people to multiply their gain with very less money 💰.
For example, suppose I have 500 million to invest. But I invested 5 million in the market and remaining I kept somewhere safe 🛡️. Suppose I placed a long (buy) order on BTC when market was at 70k USD. So I should have 14.29 BTC approximately. But I used 100x leverage, so I have 1429 BTC. Then it went to 71k and technically I suppose to make 1k for each BTC. So, I made more than 1 429 000 in profit with only 5 million. If you get almost 1.5 million with 5 million in a short period,,, it’s not bad right? 💰💰
Now let’s say, BTC went down to 69.5k, I lost 500$ for each BTC. So I lost 1429*500, that means more than 0.715 million. So I still have something like 4.285 million left. Nothing to worry, right? 😅
What if it goes to 63k? I’m losing 7k for each BTC, which is total 103 million. Now, for most retail traders, you will get margin call a lot earlier and broker / platform will keep closing out all your orders and you may lose all your deposited money or at least 50% (if they close on -50% P/L). 🚨💸
For institutional traders or professional classified traders like me, broker will call me, “Sir, you have negative balance in your account, please deposit 98 million or more.” Then I’ll say, “ No worries, I’m putting 495 million more to increase margin.” Either I can deposit or wait 1 month to get negative balance positive (as BTC price increases), as most brokers gives 1 month time. 💼💼
Now, say, is Future / Leveraged Trading for poor people or rich people? 🤔
Poor people, let’s say he has only 14k and he will make a order with 100x leverage and eventually lose all his money on Margin Call. (For poor people, it’s not actual call or warning, so I would say Margin Trigger) 💸🔔
Man! Trade with your money on spot
