Should I Trade on Margin Account? What is Margin Trading?

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🔽Time stamps:
1:10 What is margin trading?
3:17 Pros of using margin account to day trade
7:30 What is margin maintenance in trading?
12:39 Trading tips for trading on margin

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Is margin trading risky? Should beginner day traders trade on margin accounts?
Margin has a bad rep online, people call it gambling and the reason why new traders fail at day trading. But the reality is that MARGIN is merely a tool for day traders to use. It's RISK MANAGEMENT that'll determine whether a trader become profitable or not.

If a trader disregard risk management, he or she can blow up both margin and cash trading accounts! Almost all full time day traders I know use margin trading. All of my day trading broker accounts are margin accounts.

PROS of Using a Margin Account:
1. Leveraged buying power
Trading brokers will give you 3 to 1 or 4 to 1 buying power. Some brokers will even give you 6 to one leveraged buying power. HOWEVER, just because you have the buying power to day trade, does NOT mean you should use all, or even all of capital to day trade!
2. No trade settlement period
3. Margin account gives traders ability to short sell stocks.
References:
https://www.investopedia.com/terms/m/maintenancemargin.asp
https://centerpointsecurities.com/margin-trading-guide/

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DISCLAIMER: I am not a financial adviser nor a CPA. These videos are for educational and entertainment purposes only. Investing of any kind involves risk. While it is possible to minimize risk, your investments are solely your responsibility. It is imperative that you conduct your own research. I am merely sharing my opinion with no guarantee of gains or losses on investments.

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Видео Should I Trade on Margin Account? What is Margin Trading? канала Humbled Trader