Trading. Some may call it a fool’s game, others see it as the occupation of opportunity. The equation may seem daunting for some but in reality, it is simple. The market is the field of play, your funds are the equipment and the trading return is your points. Return is important, as is, of course, the market, yet ultimately the funds and how you utilize them is the integral component. This article will show you how to get the best out of your trading funds in the crypto market.
The most basic principle of effective trading funds usage is fund management. Fund management is the key to stop the loss of big amounts of investment and also to maximize profits in a fixed risk situation.
Good fund management at its core is defined by the fund utilization rate. This explained by the formula, fund amount held in one’s positions divided by the fund amount held by one’s account equity. This risk control indicator is integral. The formula is the most important factor for useful and efficient fund management. Traders need to utilize their fund utilization rate to decrease risk and create large yields.
Another important tool alongside fund utilization is derivatives. Leverages can be adjusted in this day and age making derivative trading more popular and effective. Exchanges like OkEx, Bitmex, and others have derivative trading as a key part. This has meant that traders can long and short the market, making the equation one-sided. On days of low volatility, this can also accentuate traders’ fund returns due to making correct usage of leverage. Intertemporal arbitrage and spot-futures arbitrage could also improve the efficiency of fund use with leverages. OkEx’s derivatives big data platform is also something to look out for foe effective trading.
As previously mentioned, some exchanges like OkEX can accentuate your trading funds’ success. The daily settlement system is one way they can help. OkEx has opened a feature that allows daily settlement as opposed to their previous weekly version. This upgrade allows traders to take out funds in open positions at any time. Those in the know will understand the need to store funds and look after them. Some exchanges allow them to do this, with OK PiggyBank an example. This allows you to circumvent volatile and risky markets as well as switch up their portfolio easily.
In conclusion, the following three pieces of advice are the ground blocks for effective trading funds management and usage. Keep these pieces of advice in mind and you will go far.