Cryptocurrency Trading 101: Lessons from my Portfolio

I can't find where I can buy derivatives on bitmex.com. Can you post direct link to the option? Thanks

bartono said:

I can't find where I can buy derivatives on bitmex.com. Can you post direct link to the option? Thanks

Click to expand...

all Bitmex trades are derivatives. they are various types with various crypto combos (bitcoin-usdollar, bitcoin-yen, ripple-bitcoin, etc)

just open an account and check the references section to get yourself acquainted with their various combos.

if you are not already familiar with derivatives and how they work, keep in mind, this is risky business. make sure you understand it especially the mathematics side of it. i am here to answer any questions you may have. all the best.

@michaeladewale2010

What is the difference between that buy/long and sell/short buttons on bitmex, the green and red button.

Which one are you using for your trade, and what is that leverage button with a slider.

I am following your trade, remember you said I should ask question if I don't understand. Thanks

BTW, your name sounds familiar

ShehuAB said:

@michaeladewale2010

What is the difference between that buy/long and sell/short buttons on bitmex, the green and red button.

Which one are you using for your trade, and what is that leverage button with a slider.

I am following your trade, remember you said I should ask question if I don't understand. Thanks

BTW, your name sounds familiar, like we are from the same geo entity

Click to expand...

I be naija boy. if u understand me then u are right that we from the same geo entity.

anyways the buy/long button refers to buying. this is what most people are familiar with - buying in the hope of it rising in value.
the sell/short buttons are the opposite. you can use this to sell what you already bought OR you can use this as a money making opportunity as well - here's how:

selling short simply means borrowing a commodity and selling it. so if, for example, i believe the price of BTC is about to go down, and i choose to sell short. the exchange lends me the quantity of the commodity that i need (ofcourse they make sure my account balance can cover the expense incase of any loss), once i get it i sell it in the market for $7000 for example. then i wait. once the price drops to maybe $6500, i buy it back and return the commodity to the exchange and i have a $500 profit. i hope that makes sense.

that is the most basic explanation of it. but then again - there are many nuances of buying and selling. you might want to google these - market orders, limit orders, trailing orders. these are too much to explain here.

Na sooo, I bn recognize the name. So can we connect on some level, I want to start with $30, I have been watching videos and have questions, I know this is the time for this kind of trading given the hardfork coming.

@michaeladewale2010

And again @michaeladewale2010, there are 3 tabs, limit, market and stop limit, under which one do you buy?

My third question, no vex brother. I see many videos saying leverage is risky, that one must know his onions. I want to ask, when setting a buy order, is it compulsory I must use leverage? That sliding button with 1x, 2x, and so on.

And have you been doing yours with leverage or not?

And lastly, I bought $15 at 6900, it rose to 7100, I saw over 100% ROE, sold with that market button but haven't seen changes in my balance. My balance still the same as before?

ShehuAB said:

Na sooo, I bn recognize the name. So can we connect on some level, I want to start with $30, I have been watching videos and have questions, I know this is the time for this kind of trading given the hardfork coming.

@michaeladewale2010

Click to expand...

surely this is the moment for cryptos. lots of money to be made. where are you based?

ShehuAB said:

And again @michaeladewale2010, there are 3 tabs, limit, market and stop limit, under which one do you buy?

Click to expand...

i use all three. depending on the type of trade i am making. market orders place my orders immediately. limit orders place them at a certain price and stop limits are used to control risk. that is when you place an order, you also place a stop order to close your position at a certain price if things do not go your way. for example you buy at $6000, you can place a stop market order at $5900. so if the price declines to $5500, your stop order will automatically sell when the price reaches that $5900. instead of you losing $500, you only lose $100.

so bottomline, i use all three depending on what kind of trade i am making and whether or not i am watching the markets at the time. i mostly prefer market orders because i place them when watching the markets. i am more confident when i see whats going on than placing a limit order when i am not aware of the current market condition. hope that makes sense.

ShehuAB said:

And lastly, I bought $15 at 6900, it rose to 7100, I saw over 100% ROE, sold with that market button but haven't seen changes in my balance. My balance still the same as before?

Click to expand...

there could be a number of reasons why. first, you placed your order at $6900 but you have to be sure that they got the orders at exactly $6900. sometimes depending on how busy the market is, your order mght not get filled immediately and it could fill somewhat higher than $6900. same thing when selling. you may have seen $7000 on your dashboard but maybe the price had dropped somewhat by the time your order got filled.

another reason could be your fees (funding rates) could have eaten into some of your profits. what kind of leverage did you place? 100x has higher fees than 50x and so on.

also you get charged higher fees for market orders than limit orders.

it could be caused by any of these. check the Account tab. Under Type check that it shows RealisedPNL. if it shows UnrealisedPNL then your profits havent been reflected yet. if it shows RealisedPNL then check the amount next to it. if it is a +ve number then that amount should be added to yupur capital because thats your profit (less all those charges i mentioned above). all the best, friend.

Thank you i will try it too i hope i get somthing from this !

Good luck Brother

Wow, thanks @michaeladewale2010, I checked the account transaction type as you stated, it is showing realised PNL, 0.00003236 xbt, I guess that's why I couldn't notice it.

I used 0 leverage, the cross. Could it be the cause, at what leverage do you advice as a starter. Or was my capital too small? I transferred $30 then used $15 to test the waters, my balance intact upto now.

I reside in Kaduna. And you? Can we connect on what sapp if you won't mind?

I appreciate your response, thanks very much.

Hey,

I followed this thread today. I was amazed at the $20 invested in BTC turning into $300 in profit. Does that mean if you actually put $200 in for derivatives then you would've gotten $3,000. . . Then dare I say. . . If you invested $2,000 = $30,000? Cuz. . . I mean that's freakin' amazing

From your replies in the last page it looks like you're simply talking about leverage trading tho? Is that what derivatives is? It sounds like you're just using the 2-10x function I've seen on Kraken. I can never figure that shit out. I tried with a small amount but I couldn't sell what I borrowed? and it kept charging me rental fees.

Please can you explain the difference between margin trading and buying derivatives and how you can buy derivatives on Bittmex, which is where you did this. I'm signing up with Bittmex after the 5th or 6th to try this out.

I'm not saying BTC is easy to figure out. But shit, if I can gamble $200 like a mofo and get $3,000 just by predicting that BTC goes up $300. . . LOL dats so ez . u know cuz BTC just needs to fall by $300 then I can just go: "kek it'll go up by $300 in the next week or so XD"

I'm diving into this slowly but I have 0 experience. I have bought some BTC using coinbase and I'm now trading @ gdax but I don't know how to read graphics. Do you have any tips where I can learn more how to read graphics ?
Thanks

@michaeladewale2010, I think I am beginning to understand what I did previously.

Here is it, I bought from market, the quantity is $15 (15 contracts) 0.0015xbt at cross leverage. Is that the reason why the gains was less even at 100+ ROE?

I now understand with 37$, I can be able to buy upto 600 contracts as against limiting myself to 37$ contracts as I did in that case. Am I right please?

I also noticed something, some leverage positions require higher capital to purchase, like 25x leverage for 600 contracts at 37$, while that same contracts won't process at 10x with 37$. Thought it goes in ascending passion, 1x, lower than 2x, 2x lower than 3x.....I noticed sometimes 50x leverage being lower than 10x or 5x leverage, why is that so please?

UPDATE: The markets have been fluctuating at very small price intervals over the past 2 days. I try not to trade under such conditions as my profit potential is greatly reduced and i just don't understand the reasons for such small movements. Maybe I will one day and then I can make money in such times. For now, I am continually watching the charts for the next best opportunity that works with my methods.

Thanks for everyone that's been following. I hope I am able to inspire someone atleast and we can all make millions in this biz.

Nikolaos Na said:

Thank you i will try it too i hope i get somthing from this !

Click to expand...

I hope you do too. All the best.

joncash said:

Good luck Brother

Click to expand...

Thank you. I appreciate.

ShehuAB said:

Wow, thanks @michaeladewale2010, I checked the account transaction type as you stated, it is showing realised PNL, 0.00003236 xbt, I guess that's why I couldn't notice it.

I used 0 leverage, the cross. Could it be the cause, at what leverage do you advice as a starter. Or was my capital too small? I transferred $30 then used $15 to test the waters, my balance intact upto now.

I reside in Kaduna. And you? Can we connect on what sapp if you won't mind?

I appreciate your response, thanks very much.

Click to expand...

oh i see. as long as you are not losing more money than you make, you are in good hands

i have disciplined myself to operate on only 50x margin. at this threshold i can trade with peace of mind. my sell-stops are not much farther than my liquidation point. but thats a price i am willing to pay. the margin levels are different for different ppl. just always remember that the risk potential correlates with the profit potential. 50x margin would give you 50x more returns than 1x margin but with 50x margin, you can also lose all you capital 50x sooner than you can with 1x margin

find your threshold and the price you are willing to pay if all goes wrong. then you can operate with full confidence. it doesnt matter how fast you get there but how consistent you are.

JV1999 said:

Hey,

I followed this thread today. I was amazed at the $20 invested in BTC turning into $300 in profit. Does that mean if you actually put $200 in for derivatives then you would've gotten $3,000. . . Then dare I say. . . If you invested $2,000 = $30,000? Cuz. . . I mean that's freakin' amazing

From your replies in the last page it looks like you're simply talking about leverage trading tho? Is that what derivatives is? It sounds like you're just using the 2-10x function I've seen on Kraken. I can never figure that shit out. I tried with a small amount but I couldn't sell what I borrowed? and it kept charging me rental fees.

Please can you explain the difference between margin trading and buying derivatives and how you can buy derivatives on Bittmex, which is where you did this. I'm signing up with Bittmex after the 5th or 6th to try this out.

I'm not saying BTC is easy to figure out. But shit, if I can gamble $200 like a mofo and get $3,000 just by predicting that BTC goes up $300. . . LOL dats so ez . u know cuz BTC just needs to fall by $300 then I can just go: "kek it'll go up by $300 in the next week or so XD"

Click to expand...

i am glad you are interested in this. derivatives can be related to leverage trading only in the sense that you are using less money to get more. but at the core, they are completely different. what you are trading on bitmex are contracts to buy or sell BTC at a certain price. with leverage trading as you described, you are borrowing money from the exchanges (or brokers) to buy/sell BTC. leverage is just like getting a bank loan to buy a house. derivatives are just like signing an agreement to buy that house at an agreed price over a certain time period. hope that makes sense.

your analysis of using $200 to get $3000 is absolutely correct. however its not as simple and straight forward - as you also are aware of.

i wish you all the best buddy.

Freedoom said:

I'm diving into this slowly but I have 0 experience. I have bought some BTC using coinbase and I'm now trading @ gdax but I don't know how to read graphics. Do you have any tips where I can learn more how to read graphics ?
Thanks

Click to expand...

glad to hear of your interest. there are many resources online. just google it. there are some good books out there also.
Technical Analysis of Financial Markets by John Murphy
Japanese Candlesticks by Steve Nison

you will find differing opinions as you read and learn. whats most important is that you have a view of how you feel the world works. as you read, you can align yourself with the concepts that best support the way you feel the world works. this is what will make you trade with confidence. also your views of the world might be wrong sometimes so have an open mind when you see something new that has lots of research backing it up...millions of traders operate on millions of methods. your method must be unique to you and derived from your own convictions. not to say you wont make money by following others. you can. but when you are in trouble ( and you will face troubles in the markets), it is your own convictions that will save you. not someone else's. hope that makes sense.

ShehuAB said:

@michaeladewale2010, I think I am beginning to understand what I did previously.

Here is it, I bought from market, the quantity is $15 (15 contracts) 0.0015xbt at cross leverage. Is that the reason why the gains was less even at 100+ ROE?

I now understand with 37$, I can be able to buy upto 600 contracts as against limiting myself to 37$ contracts as I did in that case. Am I right please?

I also noticed something, some leverage positions require higher capital to purchase, like 25x leverage for 600 contracts at 37$, while that same contracts won't process at 10x with 37$. Thought it goes in ascending passion, 1x, lower than 2x, 2x lower than 3x.....I noticed sometimes 50x leverage being lower than 10x or 5x leverage, why is that so please?

Click to expand...

that's a lot of currency conversions i really just work with XBT currency once i am in BITMEX. i worry about the dollar equivalents once i make transfers out of the exchange. but anyways your estimations seem about right concerning your returns being small. i think i addressed this earlier with your other post. not sure.

concerning your 2nd question. yes 600 contracts at 10x leverage should cost more than 600 contracts with 25x leverage. that is because 10x leverage requires 1/10 of the total amount while 25x leverage requires 1/25 of the total amount. so in a real world example, 1/10 of 100XBT for example = 10XBT. while 1/25 of the same 100XBT = 4XBT.

it is like this because of risk. 25x margin is riskier than 10x margin so it costs less. hope that makes sense.

Your thread is very informational, and I appreciate the time you take to explain things in simple terms. Please keep up the good work!