Shorting bitcoin with 5x leverage before segwit signalling on Aug 11th

in segwit •  7 years ago  (edited)

So I like to place an order, go to bed ..and wake up in the morning pleasantly/unpleasantly surprised.

The story until now :

Previously I managed to double my money by going long on Bitcoin.
The previous post can be found here : https://steemit.com/short/@sanbel/how-to-make-some-profits-on-margin-by-using-100x-leverage-on-bitcoin-for-aug-1st

I went 10x long on Bitcoin ... Bitcoin price rose by 10%, I closed my position and managed to make a 10%(profit)*10x (leverage)= 100% profit.

Now for the second part of the blog... "Shorting bitcoin"...

There's still a few more days left for bitcoin segwit signalling ( around 569 blocks) and I decided to take the risky route of shoring and then going long again within that time period ( Shorting during a bull run is risky !! .. As you will see )

segwit-timeline.png
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margin5.jpg
Shown below is that I have gone 5% short at entry position $3289, with a liquidation price of $4086.
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Steps to place a Short :

Since doubled my balance from 0.7 to 1.4, I now have about $3300 * 1.4 = $4500 in my account ...
Bitcoin price would have to fall by $4500 for my account balance to get wipedout ( liquidated).
At 5x, the price would have to drop by $4500/5 = $900 ..

If btc price shoots up from $3300 to $3300 + 900 = $4100, I would be liquidated ( balance = $0 ).

With enough room to not get wiped out... and by "selling" (shorting) about 1.4 btc (balance ) * 5 (leverage) = 7 btc worth of contracts ... 7 btc = $3300 * 7 = $23000 contracts .. I place my order ( I place about $22,000 worth contracts order TO leave some lee-way of about 0.1 btc balance in my account).

margin4b.jpg

margin4c.jpg

Let's wait and watch what happens!!

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Interesting. What platform do you use to short? Do they allow users to loan BTC to short sellers for a fee?

Any derivatives platform such as OKCoin, bitMEX ( not open to US residents), Deribit should be fine. I'm not sure about your second question since this only just my second trade where I'm using greater than 2x leverage. Usually I go long or short on alts on poloneix, bittrex, kerken at a much shorter leverage.

Many thanks. I'll take a look at those you suggested. I won't touch polo but I'll consider the others. Thanks again.