/ 8 July 2024

Understanding Bitcoin margin trading: Strategies for maximising returns


It requires careful risk management and strategic planning

Bitcoin margin trading has become a popular mode of exchange among traders who want to increase their earnings by taking loans on borrowed capital. 

But it also poses many risks. This article will focus on maximising returns through Bitcoin margin trading and how it compares to futures trading.

How to trade Bitcoin with margin trading

Learn the basics

Margin trading is the process of borrowing money to invest with a larger amount of capital. 

Borrowing is a term used in Bitcoin exchange where a trader can get additional Bitcoins or fiat currency from a broker to exchange a larger position than they possess in their account. 

This means that it can be used to achieve greater profits, but it also exposes the investor to a greater potential loss.

How it works

A margin account is a brokerage account that a trader uses to engage in margin trading. The broker borrows money from the trader, depending on the amount of money used as the margin. 

This amount is known as leverage, and it is most often presented as a percentage. 

For example, in this example, a trader can control a position with a $10 000 investment using only $1 000 of their money.

Margin trading and forex copy trading: opportunities

Transfer of knowledge: adding expertise to strategies

Those who are interested in margin investing or who want to improve their strategy can use Forex copy trading

The method helps traders replicate the trades of experienced investors, and such services are offered by platforms such as JustMarkets. 

This approach gives access to expert strategies and helps to deal with risks.

Learn how to harness the knowledge of experienced traders to make your investments more profitable.

Benefits of this technique

  • Risk management: To minimise the chances of losing big, it is a good idea to follow the strategies of professional traders.
  • Learning opportunities: Profits from observing the strategies of successful traders.
  • Convenience: Creating automatic trades according to the decisions of experts saves time and energy.

Strategies for maximising returns

Risk management

Risk management is particularly important in margin trading. Traders should also place stop-losses to minimise losses incurred and take profit orders to lock profits at a particular level. 

Leverage is also of importance; traders should not leverage their accounts too much and risk a substantial amount of their capital on a single exchange.


A diversified strategy and portfolio can help reduce the level of risk. It is advisable for traders to go for not only Bitcoin but also other crypto and even traditional assets. 

This approach helps diversify risk and avoid exposure to the effect of a negative price change in any particular investment.

Technical analysis

Technical analysis can also be applied by traders to make decisions. Moving average, RSI (Relative Strength Index), MACD (Moving Average Convergence Divergence), and candlestick patterns are among the most useful ones. 

They assist traders in recognising trends, points of reversal, and when to enter and exit exchanges.

Margin trading vs futures trading

Futures trading refers to the agreement to purchase or sell an asset at a specified price on a future date. 

While margin allows investors to leverage their investments by borrowing funds to expand their position, it involves the promise to purchase or sell an asset at a certain price at a given time.

Benefits and risks of margin trading


  • Ability to exchange a wide range of assets with increased flexibility.
  • It has the potential to generate high returns with low investment capital.


  • Leverage increases the risk level.
  • Potential losses are high if the market goes against his or her position.

Benefits and risks of futures trading:


  • Greater clarity in the risk management process due to pre-defined contract conditions.
  •  Lower fees than margin.


  • The need to honor the agreement and avoid losses.
  • Complexity in understanding futures markets and contract specifics.

Last tip for margin trading

Your margin trading skills go beyond the usual benefits and risks. One effective approach is to use specialised tools to tap into market sentiment. 

By monitoring social media chatter, news updates and other sources, you can spot emerging trends and sentiments that influence asset values. 

Integrating this sentiment analysis into your strategy offers valuable insights, aiding better decision-making and staying ahead of market shifts. 

Remember, for a complete market understanding, blend sentiment analysis with technical and fundamental analysis.


Bitcoin margin trading offers the potential for substantial returns, but it requires careful risk management and strategic planning. 

By comparing these two techniques, traders can better understand their options and choose the method that suits their risk tolerance and investment goals. 

Additionally, incorporating forex copy trading can provide a valuable edge, leveraging expert knowledge to navigate the complexities of trading and enhance profitability.