About the Swing/Margin Trading category


#1

Help us learn more about SWING TRADING!
Videos are great, but give us great write ups and pix please!


#4

The real 25th comment lol


#5

heeere bohhh gggggggggggg


#6

WOW. Nobody does much margin trading here. I do it all the time. I will write up something for the Pub.


#7

Quick tips for these recently getting into the beautiful thing that is Margin trading.
The key to winning in Margin Trading is to stay in the game, which means never over leverage, as tempting as it might be.
***Tip 1: Liquidation price can be misleading
Let’s say you went long on OMG at $10, and your liquidation price is $4. You might think this is absolutely safe. OMG would have to drop 60% in value, and it hasn’t gone down to $4 since it’s bull run.
Now here is the catch, let’s say your Bitfinex margin funding consists of a mix of Eth and BTC.
As BTC drops (as with the recent China crashes), the actual value of your margin funding/bitfinex equity drops, along with your OMG margin position.
When BTC dropped from $4,000 to $3,000 and Ethereum from $300 to $200, you equity to back up your funding is now much smaller, and you will likely find that your liquidation price could now be as high as $6 - $7.
So in a volatile and unpredictable market, the liqudiation prices could close in on you much faster than you expect.
Would the answer be to then simply put in as much equity on Bitfinex as possible? I wouldn’t recommend this, as any money on exchange isn’t yours, and anything could happen, Mt Gox, Btc-E, Bitfinex could go insolvent etc.
The solution for me is to keep enough funding to have my margins relatively safe. However have backup funding in my wallet, to move to exchanges quickly when the need arises. This brings me onto tip 2.
***Tip 2: Have a quick way to transfer coins/funding to your bitfinex account
In a quick crash (let’s say in the unlikely event that China bans mining), if you didn’t set any stop losses and now your margins are looking ugly and your at risk of liquidation, but don’t want to sell. You need to put money into Bitfinex quickly. Bitcoin (especially during busy time) could take 30 mins to 1 hour to go through.
My number #1 pick for quick transfer coin is non-other than NEO. And since last week, as Bitfinex opened up Margin trading for NEO, you can now use NEO as margin funding. It takes approximately 30 seconds to 1 minute to go from the NEO desktop wallet, into the Bitfinex account.
I have a sizeable holding of NEO that sits in my wallet, gathering GAS. During dips or crashes, I can quickly transfer additional equity to bitfinex within minutes.
This does 2 things:

  1. Keeps my margins safe from liquidation
  2. Gives me additional capital and margin funding to buy the big dips/bounces. Imagine you opened a large margin long on OMG at $7.
    Once the market recover or my margins are safe, I can quickly move the NEO back to my wallet for safe keeping, gathering up more gas.
    ***Tip 3 (Advanced): You can rework your margin positions
    When the market goes against your margin long, your options isn’t just limited to close OR hold. If you are an active trader, you can rework your Margins.
    Let’s say I have a long on OMG at $12. It’s now down to $10, ouch. I see there is more bad news coming and the market is looking weak and OMG just keeps on dropping. I could sell 50% (let’s say 500 OMG) of my margin at $10, which might push my OMG base price to $14 (Meaning price need to be $14 before I break even).
    As predicted, OMG just keeps on tanking, now it is at $7. I buy back this OMG I sold at $10 for only $7. Now my base price could be only $10, meaning I would break even and profit when OMG goes back to $10.
    The above numbers are made up, and probably isn’t accurate, and it might take 1 or 2 times reading it to fully get your head around it, let me know if it’s not clear! (Don’t know how to explain it better sorry!)
    Hope this helps! The above is a bit long and might be a bit confusing, let me know if it doesn’t make sense.