Question about margin trading on polo.
Hi everyone. For the first time i got in trouble using margin trading. Currently I'm long on ETH (fml) and i decided to sell a part of my position and accept my loss to incease my margin. I always thought that when I sell a part of my long position at a lower price thani bought it, i would instantly lose a part of my money. But that wasn't the case. Instead I only increased my Base Price. But the rate at which my Loss increases is decreasig because of my lower margin holding. So currently I'm at -0.65 BTC and have 13 ETH left. When i sell another 12.9 ETH then I would still have 0.1 ETH in margin, but my P/L Value wouldn't decrease, or at least VERY slow, anymore. The downside would be that my Baseprice would be like infinte.
So my entire Loss of 0.65 BTC would be concentrated in 0.1 ETH with a fucking high base price, but i didn't lose any money yet. OC i can't cash my money from selling the ETH out because it is locked in my margin account.
My margin would be far above 40% again. If ETH continues to drop further, let's say to 0.06 (god bless) and i use all that free money that i got from selling my ETH before. To buy the amount of ETH I sold before back at a lower price, my base value would be even lower than before. That means i've profited from the falling market. It wouldn't increase my BTC amount, but it would decrease my base value.So for the coming bull market, i would make even more gain when ETH recovered.
I basically shorted ETH while having a long position open. Does it work like this?
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