We invested 5 USD in 2015 and used Proportional Trading System to turn it into a millionth profit in 2019 or even 3 million in 2018. How is it possible? Let's try to figure it out.

Margin Trading

Margin trading is a tricky trading technology. It's like a modern alchemy. You borrow the asset or money, then use it to trade. Thus you can use leverage to increase your trading capital several times - at 3, 5, 10, 100, or even 1000 times. It costs, but it makes sense if you expect big profits. It allows professionals to become millionaires. All that we can lose is our initial investment.

What if Bitcoin Falls?

If bitcoin falls, then investors lose, but traders make money. We can use margin trading to borrow bitcoin. Then we sell it. When it falls even more, then buy and take a profit. Take a look at the chart above. We made money in late 2018, when the bitcoin fell down.

Real Life

If we use leverage 10:1, then we get 1 million profit as on the chart above. But we will need something more in real life:

- Knowledge and experience of trading;
- At least 4 years of time;
- Broker or exchange without commissions and fees;
- Time machine 🚴 to get back in 2015

If there are no time machines at the nearest car dealership, or if your broker takes big money from you, you will have to increase your initial investment or spend more years to get first million. The initial $100 or $1,000 should solve these problems.

Where to Trade

Margin trading is provided by some exchanges and brokers. Brokers are more stable and secure, but exchanges are more transparent and honest. Exchanges allows leverages up to 3:1, sometimes up to 10:1. Brokers allows even more.

Try Ethereum

 
Let's try Ethereum margin trading. We turned 5 USD to 6,400 USD in just two years. It looks impressive. Two more years...

Something Dangerous

Perhaps a higher leverage will help reach a million faster? Let's try leverage 10:1.

 
We got a growth of up to 5 million at the end of 2017. But by 2019 we lost almost all profit. Pay attention to the dangerous drowdown in the center of chart. If we try leverage 11:1, then we will lose all at this point.

Tips for Margin Trading

- Use trading systems with high Sharpe Ratio. High Sharpe Ratio will allow you to use leverages up to 5:1 or even up to 10:1. Use leverage up to 3:1 for simpler trading systems or trade without leverage.

- Use capital management system to decrease drawdowns. Position sizing is always better than stop loss orders. Stop losses can eat all your profit.

- Divide your capital into parts and trade with different assets.

- Investing and long positions are always safer. Short sales are more risky.

- Do not risk a bigger amount than you can lose.

- Study trading, cryptocurrencies, portfolio management, math, statistics, programming, machine learning. Read books, online trading communities, try MOOC for online learning.