💵💵💵 What if you don’t have much bitcoin to start with? Did you know there is another option called Margin trading. It’s riskier than 1:1 trading but it lets you make much more profit much faster.
It also allows you to SHORT bitcoin, meaning make profit from the falling prices and bitcoin crashes
💵💵 Here is how it works
Note: This is a super aggressive example. Normally I would never suggest to trade with more than 2:1 leverage to newbies.
1. Join BitMex exchange that allows you trade with leverage
up to 1:200
This is example of a long trade (when we expect price to rise) but you can do opposite if you expect bitcoin to crash.
💵 2. I deposit for example 0.5 BTC and will open 2 limit long positions (delayed trade). Lets say current price is $15100
Click the image to check it on Bitmex
a) If price drops to $15000 we go long with 5:1 leverage. We get stop loss (called liquidation at 14545 level – at this level we lose the trade)
b) we open second position 3 times bigger in size at 14545 level again same 5:1 leverage. This position will cover our loss + make us nice profit if bitcoin goes back up to 15000. Else we lose all if it keeps falling to 14106 level. (in my example)
The bottom line – this is a RISKY game but it allows you gain much more profit with less money in case you cant afford to trade big with 1:1 regular leverage. For me 0.5 btc is a small amount so I am using a crazy 5:1 leverage but if you are just starting I would not suggest more than 2:1 leverage.
Have fun and remember play only with amounts you are ready to lose!
When you can use it? When strong news are coming and a clear trend just started.
Avoid using it : when the market goes sideways and there is no clear trend.
For example if you expect bitcoin to crash, you can use sell limit order:
Say market price is 11340 and I expect Bitcoin to crash to 9000.
I open Sell Limit order at little higher price at 11750 5:1 leverage, I will lose everything if it goes up to 14549, else I will be in good profit 🙂 This is how you can short bitcoin and make money on the crash!