Welcome to week 3 of my trading strategy where I start off with $20 and hope to make it into much much more. I have had some success in trading over the years and some failures as well so this is a trial to see how far I can go with $20. As you know crypto is extremely volatile and Futures trading is heavily leveraged so I use some strategies to keep me disciplined. Indiscipline is what gets you liquidated so I follow a couple of important rules to try to make a profit.
Rule 1 : No more the 5x leverage. The Futures default is 20x but use this cautiously. The majority of traders get wrecked trading 20x. This is a fact by the way. So less returns for alot less risk is a better scenario and you will end up with more in the long term.
Rule 2 : Only trade negative funding rate assets. So basically the shorts pay the longs. I try to get in at the bottom so I receive commission every 8 hours from the funding fees. If the price drops I hope the funding fees can make up for the loss in the tokens value and break even. If the price increases I close my position for profit and move onto my next trade.
Below are the links to week 1 and week two which go into more detail around the Futures Funding Rates.
Week 1
Week 2
Week 3 was the difficult second album of a week. I had a great week 1 and week 2 but week 2 came with a caveat. I was 100% in all my trades with the exception of 1, my long position in $FOOTBALL. The funding fees on this asset were negative so every 8 hours I was receiving commission but the asset was dropping so I had to make a decision. After 5 days the funding fees were making up the loss in asset value so I decided to cut myself loose with a $12 loss and enjoy the Christmas period. The funding fee was slowly getting lower and lower so my commission was waning. Also football token was decreasing after the world cup so was nervous it would drop more. In hindsight I made the right call. I lost $44.43 on the trade but gained $31.86 from the funding fees. Interesting as I write this post today I am looking at the funding fee and it is back up to -0.5% so I am accessing whether to jump back in on this token as it is close to its bottom.
Week 3 :-(
Week 4 so far
With the exception of this hiccup I have been trading mostly $REN this Christmas period.
$REN is a dangerous as apparently the asset is shutting up shop so not sure why it is pumping. However some powers that be are pumping the coin massively which is leading to a huge commission fee of minus 2%. There has also been a few huge transactions into $REN as well. So every 8 hours you tag along for this ride could bag me around $5 dollars but it is a token that will fall right back down to earth with a bang so I got out with a nice profit and implemented a different strategy of just shorting after the Funding Rate Countdown timer. It seems to work well although I missed out on the 2%. I made $28.93 trading this bad boy but the finding rate has decreased now so I am out thank god.
So after week 3 I am nearly at my $100 initial target. $96.30 to be precise.
I hope to have $130 in the bank before end of week 3 and this is when I start making bigger profits on a 5x leverage. You may laugh this is pittance to many people reading this but the goal of this series is to make pittance into pounds with a $20 outlay. I spent that last night in the pub buying 3 drinks so let's see how far it gets us in crypto world,
Referral Link is here if you want to try your hand in Binance Futures trading.
As per usual this is not financial advice. It is just an account on my trading strategy.