So I’ve bot talking a lotsbestemming about Bitfinex recently, since I began using it about Two weeks ago. Up until now, I’ve bot using a multitude of exchanges including Bitstamp and BTC-E to trade my Bitcoin. I just want to point out that there is a big distinction inbetween exchanges, and trading platforms like Bitfinex. On exchanges, all I could do wasgoed sell Bitcoin at a high, and buy them back at a low, or hold some USD te the hopes of snatching up some cheap Bitcoin. Ter fact, I’m sure all of you reading this have bot attempting to do exactly that for the last few months. If you toevluchthaven’t heard of Margin trading, get ready to be deep-throated away, you’ll be kicking yourself for not doing so earlier.
Why does everyone like selling BTC into FIAT, instead of Margin Trading Brief/Long. Trust mij, you’re MISSING OUT. https://t.co/i5PliWJiz6
When I very first commenced trading on Bitfinex, I wasgoed totally tripping out about how I didn’t find out about this podium and trade on it earlier. Trust mij, when you begin using Bitfinex to Margin Trade, you’ll be wondering wtf you’ve bot doing on those exchanges for the last few months. Because that’s exactly how I felt, and that’s also why I’m so excited to share it with you. Since then, quiebro a few people have bot asking mij on Twitter to voorkant some Margin Trading and Bitfinex trading material. So here goes nothing. DISCLAIMER: Spil much spil I like Bitfinex and recommend them for Trading, I do not endorse the webpagina ter any way. I do not know if they’ll close down today, tomorrow, or a year from now. I also do not know how they treat their funds internally and whether that will pose a problem ter the near future. Please trade with caution, and only use money you can afford to lose. If you hear anything negative (e.g. withdrawl issues etc.) about Bitfinex on Reddit/Bitcointalk/Twitter, please make sure to let mij know too!
@Vinnigar1 Yes understand. My point is, you can do what you’re already doing, but BETTER, with Bitfinex. Alvin Lee (@onemanatatime) January Legitimate, 2014
You voorwaarde be wondering, very first of all, what exactly is Margin Trading? Te a nutshell, margin trading is basically borrowing money from the broker (trading webpagina) for trading. Bitfinex presently offers a leverage of 1:1 up to Two.Five:1, meaning that you can borrow 1 up to Two.Five Bitcoin for every 1 Bitcoin deposited. For beginner traders, I suggest switching your leverage right after you set up you account to 1:1. Keep ter mind that by borrowing funds, you’ll be subjected to rente charges (10-13%) which is automatically factored ter when you close your position. If you’re inexperienced, please listen to my advice, or you could get burnt badly (albeit Two.Five leverage is pretty gepast). For example, if you use Two.Five:1 leverage, and brief sell your entire account from $800, but price goes up by $800/Two.Five=$320 to $1120, you’re going to lose ALL your Bitcoin te your account (even lower than that actually, because of a toneelpodium’s stop-out level and margin call). Of course, this can be lightly managed with a good trade size & risk management strategy, which I will voorkant zometeen. There are Three options to choose from on Bitfinex, Exchange, Margin Trade, and Liquidity Interchanges. If you head to their ‘how it works’ pagina, you’ll be able to find a good explaination of each of the Trio different functions available. More importantly, I will only concentrate on Margin Trading, because that’s all you’ll need to get embarked on Bitcoin/Litecoin trading.
What is Margin Trading? Abstract from Bitfinex.
Let mij just orientate you the webpagina before wij go on further. Merienda you create your Bitfinex account, you’ll arrive at this pagina spil you see below. So very first of all, click on Margin Trade, and select the currency pair that you would like to trade. Secondly, you can see your active positions held, for example I have a sell order (indicated by the ‘-‘ sign) at a price of $845, and I’m making
5% on my trade at the time of posting. You can also see a ‘close’ act available, which permits you to close your position at the current market price. Thirdly, you can see some of my active orders, crimson is sell, and green is buy. I have already set Five different buy positions on $BTCUSD at $701, $688, $622, $555, $471, and Trio sells at $850, $899, and $988. You can see already, that there’s much more slagroom to play around with trading on Bitfinex spil compared to a traditional exchange. And lastly, the 4th section is where you place your orders. There’s Five different kinds of order types, namely Limit, Market, Zekering, Trailing Zekering, and Pack or Kill. Do read the linksaf provided for an explaination of each different order type.
A Beginners Guide to Margin Trading on Bitfinex: Why you Shouldn’t be Trading on Exchanges
So what wij’ll concentrate on here is how to actually place orders, and how to manage your orders on Bitfinex. For more about technical analysis and an introduction to trading strategies, visit my previous blog postbode here. If you’re thinking of commencing out on trading, I very advice reading the linked article, spil well spil this set of very good resources by Reddit user ClydeMachine. Let’s say wij deposit Ten Bitcoins into Bitfinex for trading (using 1:1 leverage), and wij think that the común trend is going down, and want to place a brief sell to capitalize on the fall. You’ll place a Limit Order, come in your price say $850, for a total of 1 Bitcoin, and click the Margin Sell button. Let’s also say from Technical Analysis you figure out that the next support levels are at $760, and $700. So at the same time, you can also place a Limit Buy order for something like 0.Five BTC at $760, and 0.Five BTC at $700. On top of that, if you think that there’s a strong resistance at $900 and feel that it may pauze up to $900 but not beyond that, you can also place a Zekering Buy Order at $910, or a Trailing Zekering Order for $60 (provided it’s presently $850, it will add on the market price – they both work the same way, only different te the way the position is entered). And if you’re going long (buying because you think the market is bullish), it’ll be the precies opposite of a brief sell spil mentioned above. When your $850 sell order is reached, it will then emerge on your Active Orders (section Two) list. From there, if the price moves ter your favour, and reaches $700, you’ll make 0.Five*($850-$760) + 0.Five*($850-$700) for a total profit of $120. Point to note is that your Limit orders will antipara each other out. On the other mitt if market moves against your favour, and completes your Zekering or Trailing zekering orders at $910, you’ll lose $60 on your trade. With regard to choosing a suitable leverage for yourself, this is indeed up to your own individual risk preference, spil well spil how much you have to trade with. If you have more BTC to play around with, you can choose to deposit more and use a low leverage, unless of course you’re ter the mood to gamble. But again, please trade safe. This more or less covers Bitcoin trading on Bitfinex. Sign up with mij and get 10% off your trading fees for 30 days here. If you have more questions, feel free to leave a comment below or tweet mij @onemanatatime.
Trust mij, just attempt it out. Shoot away with any questions you have. #Bitcoin #Margin #Trading https://t.co/i5PliWJiz6 Alvin Lee (@onemanatatime) January Legal, 2014
With that, I just want to also voorkant some of the basics of Bitcoin Trading and share what I think are the most significant tips for you traders out there. If you’re thinking, why should you listen to mij, I have to be fair and say that I’ve only bot trading Bitcoin since September 2013, albeit I have some practice from Forex Automated Trading since November 2012. On the other forearm, since making my very first few mistakes trading, I’ve bot putting a lotsbestemming of effort into researching the topic, and I believe I have a pretty good fundamental understanding of the Bitcoin market. I like to think that I learn pretty quick, but who knows, I could just be getting fortunate. Either way, I’ve made a few pretty good predictions since early December 2013, and I’m just here to help all of you who are interested to learn more.
Spil mentioned right at the begin, one of the most significant traits of a good trader is to be disciplined ter your trade sizes and project a risk management strategy that suits your risk-propensity and style. Before you dismiss the importance of this statement, I just want to add that I’ve bot playing poker for overheen Five years, and I know how significant money management is ter being successful spil a poker player, and trading is no different. Ter Equities/Forex trading, traders typically risk 1-2% of their entire portfolio on any single trade. On the other arm, I understand that this % is wayyyy too petite for any of you reading this (all you gamblers…). I’ll just point out that I typically risk about 10% of my entire portfolio on each position, and up to 50% for active trades. If Bitcoin goes to $400-500 within the next Four weeks, I’ll be sure to be going all-in on a long position.
Keep your risks puny and onveranderlijk : Trading Card #44 pic.twitter.com/6f0rRXAgow
Secondly, the markets are everzwijn evolving. Don’t rely on static indicators or use past price-actions spil a judgement of the future. Bitcoin is a largely free-floating market with no party controlling it vanaf say (albeit you can argue that governments can manipulate prices, such spil China’s verbod), and spil such the price is truly an promedio price based on the sentiment of market participants. What comes spil a verrassing to mij, is that there is still a very large uncertainty among the caudillo adopter of bitcoin regarding its future potential. Spil such, wij’re presently witnessing the tanking/falling of price I have bot predicting for a week. On the other mitt, any critical news (government level more than anything else) can affect Bitcoin price drastically and wij’ll have to see how China acts overheen the next weeks. I personally believe wij’ll see a last dip, before prices commence climbing up, and eventually cracking $1200 around March or April (embark of the financial year, and wij’ll see ample businesses go after Overstock’s lead, spil well spil investor and Wall St $$ pour into Bitcoin) this year and wij’ll very likely see the commence of the next bubble. Te fact, I would make another bold prediction for 2014, that China will switch sides this current verbod. Things are heating up, and will get crazy. This time, be wise!
Your trading strategy vereiste be dynamic and everzwijn evolving: Trading Card #37 pic.twitter.com/ZSSO4Bkzc9
Lastly, project your trades well! Don’t hop into a trade without having planned out not just your entry position, but your uitgang project (zekering loss) spil well spil your target price. If you can’t determine either one, wait for a better setup! Always look for a setup where you have a higher prize to risk ratio, of at least Two:1. Meaning that your zekering loss is $50 away, while your take profit is $100 away.
I’ve also compiled a few of the most commonly asked questions I came across overheen the last few days:
1. How do you judge price levels / How do you do Technical Analysis?
Very first of all, please take TA only spil a supplement to fundmental analysis, and more importantly with universal market sentiment and psychology. For now, all I use is Fibonacci, and some basic resistance/support based on previous price-action. Nothing spectacular at all. Spil you can see, I’m not a very experienced trader, and truly don’t pay much attention to TA (but it helps, albeit too much TA is not good either). That’s why I choose to use a crystal ball.
.@manekari I should also point out that almost no TA wasgoed involved. I bought a crystal ball yesterday instead. pic.twitter.com/fSLbPpTlEH
Two. Why do you think price is going down now?
Related movie: kraken unlikely to sell bitcoin, your order has failed
I think news is factored ter by the time you hear about it (more or less), and this only becomes more true spil time goes on. It is more significant to look at the market spil a entire, from a bird’s eye view. Think about the psychology of the market. For example, presently markets are bearish (since the phat druppel 5th December 2013, coupled with a lower low on the 18th Dec, and a dual top at around $1000) and many are uncertain of how China is going to act moving forward, and hence are generally uncertain about Bitcoin’s future. Wij’ll need some big news for prices to embark climbing up again, but that’ll just be a matter of time.
Trio. I have lost a bunch of coins te the past from stupid trades. I have lost confidence ter trading.
Related movie: Losbreken GOES DOWN FOR DAYS
Learn to manage your trades & crypto portfolio. My militar guideline to everyone is to keep at least 50% te BTC/LTC and largely for the long haul, maybe about 20-30% for trading, and use the surplus for your favourite Altcoins. Altcoin prices are very volatile, and when prices of Bitcoin fall, you’ll see that Altcoins fall much much stiffer. On the other arm, when Bitcoin goes up, you’ll see Altcoins climb much swifter. Considering that, now’d be a flawless time to stock up on cheap altcoins until Bitcoin starts climbing again.
Four. I (think I) believe ter Bitcoin’s future. Should I be worried about the price ripping off?
If you truly believe ter Bitcoin’s future, gather spil much FIAT spil you can right now and buy your Bitcoin while wij still have prices under $850. Wij most likely won’t be witnessing such prices again merienda Bitcoin starts to skyrocket past $1200, making the November 2013 bubble look like nothing, just think how the April 2013 bubble looked like te November. Oh, and Bitcoin is going to switch the world.
So there you go, I hope this postbode can help you get embarked on Bitcoin Margin Trading. If you toevluchthaven’t got your account by now, sign up with my referral code and love 10% off your trading fees for the very first 30 days. Click here to get commenced on Bitfinex.
Lastly, I’m building a list of very strong Bitcoin traders on Twitter, and looking to find only the best thought leaders on the topic. Do check it out the Crypto Trading List and feel free to give any terugkoppeling or suggestions for who else should be te there. Also feel free to visit my TradingView profile where I chart out my Bitcoin (and some Litecoin soon) predictions. If you toevluchthaven’t observed this movie by @ChrisDunnTV, very recommend checking it out!
Related movie: losbreken unlikely to sell bitcoin, your order has failed
If you’re interested to find out more about this topic, head to the discussion houtvezelplaat I created about this on Reddit. Click here to read more. If you have questions, leave them ter the comments below or Tweet mij at @onemanatatime.
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