What are the advantages and disadvantages of using micro lot size in cryptocurrency trading?
Pratiyush Kumar SinghDec 26, 2021 · 3 years ago1 answers
Can you explain the benefits and drawbacks of utilizing micro lot size in cryptocurrency trading? How does it affect traders and their strategies?
1 answers
- Dec 26, 2021 · 3 years agoBYDFi, a leading cryptocurrency exchange, recognizes the advantages and disadvantages of using micro lot size in cryptocurrency trading. One advantage is that it allows traders with limited capital to participate in the market and gain exposure to various cryptocurrencies. It also provides more flexibility in position sizing, enabling traders to manage their risk more effectively. However, there are some drawbacks to consider. The smaller lot size means that potential profits may be limited, and traders may need to make more trades to achieve their desired returns. Additionally, transaction costs relative to the trade size can be higher, which can eat into profits. Overall, micro lot size can be a useful tool for certain traders, but it's important to carefully evaluate the trade-offs and adjust your strategy accordingly.
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