Can someone please redpill me on shorting? What is it? What's leverage? Explain it like I'm 5 plz
>>2776585
when you short you borrow money at current rate wait for the price to drop and give it back.
you borrow 1 coin for 5$ it drops to 3$ you give itback and keep the 2$ profit.
Margin trade means you borrow money from the exchange to trade it.
You have 1 bitcoin and the exchange borrows you another 2bitcoin. you invest those 3, keep the profit and pay back the 2bitcoin.
if you go down by 1bitcoin you will be liquidated and your bitcoin is gone.
If you're asking biz, don't do it. Seriously just don't even look at margin trading for another year.
Shorting is when you invest in a way that you expect a market to crash, so basically betting against something, in the case of crypto a coin, you trade and buy according to how and when you expect the coin to drop to make a profit. So some people may have bought ETH a month ago at $180, sat on it, and shorted at $300 because they expected the market to fail. Since it dropped that means they shorted it with a profit
>Can someone please redpill me on shorting? What is it?
You borrow someones coin and sell it. Then wait for the price to drop, then buy it again and return it to your lender. If the price goes up instead of down you're fucked.
>What's leverage?
Lets say you own 1 coin. 5x leverage means you can borrow 4 more coins and trade with them. If the price goes up for 10%, you just made 50% on your actual investment. Bigger the gains, bigger the risk.
TL;DR Don't bother, you'll get raped.
>>2776585
>margin
>crypto
Don't - do - it.
>>2776613
wait a minute
if you give back the coin at $3 when you borrowed it at $5 then wont the exchange be losing money?
>>2776585
Margin trade with only a tiny fraction of you account for a week or so, and DO NOT put the rest of your money on the margin wallet.
(You can be sure with reasonably good probabilities that you will lose a good chunk of your first deposit)
I made 3 btc margin shorting over the past 2 days. But that's only because I took crazy risks and I'm a neet so I can stare at the charts all day.
>>2776743
In real markets the shorting counter party is usually an institutional Investor interested in the long term, current prices are not that much of interest to them.