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Margin Trading - How, What, Why
05-25-2018, 11:29 PM
I thought I'd open a new thread on that topic. I just got interested in margin trading and thought we could share experience. Frankly, I've just started and went long BTC with equity $2500 and leveraged 100x at BitMEX.
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Margin Trading - How, What, Why
05-26-2018, 08:34 AM
As someone with about 3 years of experience margin trading (demo and live) I'm going to say this for the benefit of everyone reading this thread:
If you have average or below average knowledge of technical analysis, if you don't have a tried and tested strategy for entering and exiting the market, if you haven't amassed at least 5,000 hours sitting in front of charts, and if you don't have at least 6-12 months of experience trading, DO NOT MARGIN TRADE.
You WILL get REKT.
You WILL lose huge amounts of money.
You are GAMBLING.
You will have nowhere near the right amount of emotional control to manage wins and losses.
In regards to the OP, you do realise that price just needs to move $75 for you to lose your entire $2500 stake? Yesterday, price moved 3 times that nearly in less than 10 minutes
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Margin Trading - How, What, Why
05-26-2018, 05:50 PM
Yep.
I'll agree with this. While it's obviously possible, because there are people I know of who have done it very well, it isn't easy.
Technical trading is difficult because it's very quick moving, short timeframes are hard to predict, and large movements mean you get wiped out by HFT computers located a block away from the exchange.
If you have to ask whether you can make money doing it, then you shouldn't be trading live yet. Set up a demo account and practice MINIMUM of one year before you even think about making live positions. A lot of this actually is intuitive and it takes a lot of time to build up that intuition.
Here's something else to consider: there's plenty of FX platforms you can use to trade algorithmically and cheaply without risking a huge amount of capital.
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Margin Trading - How, What, Why
05-26-2018, 06:12 PM
And Bitcoin has just dropped nearly $200. Let that be a lesson to you. I hope you cashed out before that drop as there was a small rise preceding it.
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Margin Trading - How, What, Why
05-27-2018, 01:04 PM
Get registered at bitmex.com. Try the demo account first, it's excellent practice. After playing around with a demo account I realised I was gambling and didn't bother. 100x leverage is suicide unless you are only using 1% of your stack. Most people use around 10x leverage.
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Margin Trading - How, What, Why
05-27-2018, 01:09 PM
What could possibly go wrong?
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Margin Trading - How, What, Why
06-02-2018, 11:11 AM
That's stupid to lever up that much if you're asking basic questions.
I re-iterate my previous advice. Trade in practice mode only for minimum of a year.
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Margin Trading - How, What, Why
06-02-2018, 03:17 PM
I thought Matt's advice was all that was needed to be said. I'd just be going over the same ground by answering.
I know a guy who is a professional margin trader. Since he has become a margin trader he has more or less disappeared from the social world. He's up all night trading in the main hours. His wife has been trained to kill or add to positions by remote command.
Margin trading is a 24 hour / day job. You need to set alarms before you go to bed whenever you're in position.
You can't really margin trade casually, like if you have a job. I'd like to dabble more in the markets, but I work 70 hours per week. I don't have the time to really get a feel of the market, spend 1000s of hours looking at charts to spot the opportunities.
I do spot trade and I do occasionally margin trade, but I almost only do it when it follows my trading rules or it's a short opportunity I see when an event occurs.
So recently when Facebook had it's privacy problem, I put in a 100X short with $1,000 and left it. If I lost it I wouldn't be bothered. If it goes good then it will cover my living expense for the year.
IMO those are your two options: full time or find a way to look for the next big short/long. One idea would be to get updates of Trump's Twitter feed and short anything he starts bashing.
As mentioned, most people who go in for margin trading get rekt. I occasionally go into a crypto trading chat. I've been going in since about 2013/2014. It's a regular occurrence for someone to loose their entire stack.
Anyone who can make it doesn't use more than about 10X margin. 100X is for punts.
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Margin Trading - How, What, Why
06-02-2018, 04:21 PM
For the vast majority of people, this is a bad idea.
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Margin Trading - How, What, Why
06-03-2018, 08:02 PM
I have a lot of experience with margin trading, and I'm not talking about small numbers here. Trades were routinely in the 6 to 7 figure range. Long-term I'm in the green, but I stopped months ago. It is far to stressful, when I was margin trading it was by far the most intense financial stress I've ever experienced. I would sometimes sleep with open trades in the 7 figure range too.
First of all, if you are going to margin trade don't even think about 100x. Thats novelty. Think about what you are doing: you are day-trading the most volatile asset class in the history of mankind and multiplying the risk profile with financial leverage. Does that even make sense? Your leverage should be in the 2-5x range that's it. 10x if you are really feeling ballsy.
The other main issue I have with margin trading is that ONE trade, yes only one can wipe out 20 profitable ones, if you are not careful with risk management. You really need to be a cold, calculated, emotionless sociopath to be successful. Most people are just not built for it. In addition, there is one thing to lose $ on a trade and another to lose actual coins. Margin trading is the only avenue in crypto you can actually lose your coins via margin calls. Its one thing to lose 80% in an ICO, with the potential to recoup losses, a whole worse scenario to lose 100% of your coins.
ICOs are infinitely more lucrative. I'll probably pick margin trading up again, but purely just for fun, with a small stack and no more than 5x leverage per trade.
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Margin Trading - How, What, Why
06-04-2018, 07:56 AM
I wouldn't use leverage if I was trading with 6-7 figures, personally. A 2% move with a 7 figure account is some people's yearly salary. Horses for courses.
I think leverage is good for building up small accounts, providing you do it with small amounts of leverage on a consistent basis over a long period of time. That's the key in my opinion, controlling the greed.
I do 5x and am considering upping it to 10x on really big chart setups. I don't think I could consider going any higher than that given my trading style and goals.
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Margin Trading - How, What, Why
06-05-2018, 07:25 AM
Once again, thanks to everyone chipping in in this thread.
I fully agree with the "better safe than sorry" policy, hence, so far, I've been only upping it with 5x leverage and a very healthy margin. Basically, I'm trading ETH only, for it seems it's got good enough volatility but not too wild at the same time.
From what I've seen, all crypto "mysteriously" follows BTC's trading price. I think there might be collusion going on between the big three: Bitfinex, Binance and OKEX (incidentally, all three Chinese exchanges) sharing roughly 20% of BTC market cap. I would go as far as asserting that those three control BTC's price movement with extensive botnets (I know that one argument for is to allow liquidity to trade 24/7/365). All charts show nearly candle for candle the same price movement across exchanges.
Which exchange, apart from Bitmex allows for more than 5x leverage, going both long and short? I've been using Kraken for leverage and they seem pretty good but its 5x max.
Also, any particular, mathematically derived strategy and risk management any of you gents can suggest?
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Margin Trading - How, What, Why
06-06-2018, 09:36 PM
Quote: (06-03-2018 08:02 PM)Burnerman Wrote:
I have a lot of experience with margin trading, and I'm not talking about small numbers here. Trades were routinely in the 6 to 7 figure range. Long-term I'm in the green, but I stopped months ago. It is far to stressful, when I was margin trading it was by far the most intense financial stress I've ever experienced. I would sometimes sleep with open trades in the 7 figure range too.
First of all, if you are going to margin trade don't even think about 100x. Thats novelty. Think about what you are doing: you are day-trading the most volatile asset class in the history of mankind and multiplying the risk profile with financial leverage. Does that even make sense? Your leverage should be in the 2-5x range that's it. 10x if you are really feeling ballsy.
The other main issue I have with margin trading is that ONE trade, yes only one can wipe out 20 profitable ones, if you are not careful with risk management. You really need to be a cold, calculated, emotionless sociopath to be successful. Most people are just not built for it. In addition, there is one thing to lose $ on a trade and another to lose actual coins. Margin trading is the only avenue in crypto you can actually lose your coins via margin calls. Its one thing to lose 80% in an ICO, with the potential to recoup losses, a whole worse scenario to lose 100% of your coins.
ICOs are infinitely more lucrative. I'll probably pick margin trading up again, but purely just for fun, with a small stack and no more than 5x leverage per trade.
If you can't sleep because of trading you are using way too much money. That is the number 1 sign your position size is too big.
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Margin Trading - How, What, Why
06-06-2018, 09:39 PM
Quote: (06-04-2018 07:56 AM)Matt3B Wrote:
I wouldn't use leverage if I was trading with 6-7 figures, personally. A 2% move with a 7 figure account is some people's yearly salary. Horses for courses.
I think leverage is good for building up small accounts, providing you do it with small amounts of leverage on a consistent basis over a long period of time. That's the key in my opinion, controlling the greed.
I do 5x and am considering upping it to 10x on really big chart setups. I don't think I could consider going any higher than that given my trading style and goals.
I would say the opposite is true regarding your take on margin. small accounts should stick to cash. learn to trade first and learn a profitable system and risk management. Margin should be used by experienced traders.
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Margin Trading - How, What, Why
06-10-2018, 01:19 PM
Quote: (06-06-2018 09:36 PM)BIGINJAPAN Wrote:
If you can't sleep because of trading you are using way too much money. That is the number 1 sign your position size is too big.
I said I would sleep with such trades, while other people wouldn't ever consider doing something like that.
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Margin Trading - How, What, Why
06-11-2018, 04:23 PM
Where is it best to trade crypto futures?
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