Why is it important to monitor both margin balance and margin equity when trading cryptocurrencies?

1 answers

• May 06, 2022 · 3 years ago
  Monitoring both margin balance and margin equity is essential for successful cryptocurrency trading. Margin balance refers to the total amount of funds in a trader's margin account, including the initial deposit and any profits or losses. Margin equity, on the other hand, represents the actual value of the trader's account after accounting for unrealized profits or losses. By keeping an eye on both metrics, traders can assess their risk exposure and financial health. For example, a low margin balance compared to margin equity may indicate that the trader is using high leverage and is at risk of a margin call. By monitoring these metrics, traders can make timely adjustments to their positions and avoid potential liquidation. Additionally, monitoring margin balance and margin equity allows traders to identify trends and patterns in their trading performance, helping them refine their strategies and improve their overall profitability.
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