Swing trading is a popular trading strategy that can be used to make profits in the cryptocurrency market. It involves buying and selling assets within a short period of time, often taking advantage of price fluctuations in the market. One of how a swing trader can boost their trading capital is by borrowing money from a lending platform. In this blog post, we will discuss how a swing trader can profit by borrowing ETHs collateralizing their NFTs on the Liqd platform.
Step 1: Collateralize NFTs to Borrow ETHs
To get started with swing trading, the first step is to borrow ETHs by collateralizing your NFTs. NFTs, or Non-Fungible Tokens, are unique digital assets that can be bought and sold on blockchain platforms. By collateralizing your NFTs, you can borrow , e.g., 20 ETHs from Liqd platform, which can then be used as trading capital.
Step 2: Open Either a LONG or SHORT Position
Once you have the trading capital, you can open either a long or short position on a cryptocurrency. If you believe that the price of a particular cryptocurrency will rise, you can open a long position, which means you will buy the cryptocurrency and hold onto it until the price increases. Alternatively, if you think that the price of a cryptocurrency will fall, you can open a short position, which means you will sell the cryptocurrency and buy it back at a lower price.
Step 3: Make a Profit
Assuming that the price of the cryptocurrency moves in the direction of your position, you can make a profit. For example, if you open a long position and the price of the cryptocurrency increases, you can sell the cryptocurrency at a higher price than you bought it for, thereby making a profit.
Step 4: Return the Borrowed ETHs and Keep the Rest as Profit
Once you have made a profit, you can return the borrowed ETHs to Liqd. You can keep the rest of the profit. By using the borrowed ETHs as trading capital, you can make a profit without investing any of your own money.
Swing trading can be a lucrative trading strategy for those who are willing to put in the time and effort to research the market and make informed decisions. By collateralizing your NFTs to borrow ETH on the Liqd platform, you can boost your trading capital and increase your potential profits. However, it's important to keep in mind that swing trading is a high-risk strategy, and you should only invest what you can afford to lose. By following a sound trading plan and being disciplined in your approach, you can increase your chances of success as a swing trader.