Bitcoin Trading Story, Beware the Bull.
Last Night I Opened a Fat Short at The Bitcoin $2100 Resistance.
Trading on Bitmex is not for the faint of heart. So what I tell you here should only be tried by experienced traders. Even those of us who have been playing this game for a while make mistakes. If You have not seen my article, " My Bitcoin Trading Woes For Your Entertainment." please check it out after reading this one. I only risk a very small portion of my BTC stack in futures trading.
All weekend I had been making a killing on the buy side. The bulls were in charge and we were charging forward. The Bitcoin price was continuing its stratospheric rise. Then I decided maybe I would try to short BTC at the $2100 sell wall. Surely, the shorts would put up some resistance and fight back against this rise. So I opened a short right around $2070. Within minutes we were at $2090. We bounced off of that multiple times over the next 30 minutes or so but the bounces were never big for me to take a profit.
Hold the Lines!
Then came the moment I was waiting for. The bulls were right up against the $2100 resistance. There was no way they were going to take down that wall. Oops, within 5 minutes they wiped it out. When the wall was down to 100 BTC I closed my position taking with it about 20% of my profits I gained over the weekend.
Even Experienced Traders Make Mistakes.
Looking back, I should have stuck with my long position. I was so far in the money that I would have made a fat stack of BTC. The moral of the story is, if something is working don't change it up.
I Don't Recommend Trading with Leverage Unless You Trade Conservatively.
I trade with very little leverage. Never more than 10X because I don't like losing BTC. After my experience back in January I learned how to properly use Stops and have not been liquidated since then. If you can afford to do it, trading with leverage is a fun way to add to your holdings during a bull run like we are experiencing now.
Many platforms offer leverage trading but I use Bitmex and I use the (XBTM17) futures pair since there are fewer fees.
Happy Trading!
I'm giving up trying to trade. I lose more profit trying to trade crypto's then when I would just hold.
Winning strategy: HODL
What is happening now at $2200 is what I thought would happen last night at $2100. The shorts are putting up a good fight.
The lesson should be - cryptocurrency should be traded on daily or weekly graph and long term of them is always buy.
On short-term (8 hours or less) you can play them as you want and make money on both sides.
That is exactly what we do.
damn!! thanks for sharing
Lesson learnt... never go short on bitcoin...
The current momentum in crypto coins makes taking the short side on most any position a precarious proposition. With runs that we've seen recently there would likely be pullback due to profit taking at some point, I would conjecture. Finding the top is the trick.
It's dangerous to short Bitcoin. With all the noise regarding the "old monetary system" it's like holding a naked call option position..tread carefully friend :)
Hey Randy, Love your stuff. I started with crypto 2 weeks ago. Some BTC and mostly ETH. It seems we're on the road to 2,300 BTC in the next 24 hours. Comparing that to the current rise in ETH, I shifted my mobile wallet BTC to ETH yesterday at noon and saw better gains there.
Are you doing anything in the cross currency market? ETH is soaring right now, which was what made me open a Steemit account even.
Keep up the good work, Learning a lot from you and the Missus!
You can make a killing with the smaller cap coins against Bitcoin but traditionally it is a see saw battle. When Bitcoin rises all the rest fall or lag behind. This week we have Consensus in NY so anything Ethereum related will do well even though BTC is on a tear.
Good lessons here! It's possible to get burned so hard trading on Margin. Closing a losing position is an art in itself. Well done. BTC is 2170 now. Thanks for sharing!
Right at the next sell wall of $2200 on Bitfinex. I am out right now but as soon as the wall is down I am in big.