Dear Trader,
BTT prices have shot up by more than 200% since the launch. There is substantial volatility in BTT and that’s great news for a trader. We are quite sure you have also been looking forward to such a bright opportunity. So here are a few tips for you.
The first thing in any trade is to understand the risk it involves and how you can limit it. If you take 10 trades, and 5 out of them turn out wrong, you can still make more money with the remaining 5, than what you would lose from the failed trades, by efficiently limiting risk. Limiting risk is best done with Trailing Stop Limit, which is an inseparable feature of Bracket Orders available on Bitbns.
Let’s see how Bracket Orders can be used in upward and downward scenario.
Please note that if your risk to reward ratio is, say 1:3, for every INR 1 you are risking, you stand to make INR 3 if your goal is hit.
Now let’s analyse this case by case.
How to use Bracket Order during uptrend
Let’s consider some price points that we will be using to explain different scenarios.
- Current price of BTT is INR 0.08.
- You can set a Bracket Order and enter the market at INR 0.08.
- Expected price according to your analysis is INR 0.11. So you can set a target limit order at INR 0.11.
- Set a Stop Limit at INR 0.07 and set a trail of INR 0.01 (1 Paisa).
With these numbers in place, your risk to reward ratio is 1:3 as when you lose, you will only lose 1 paisa per BTT, but when you gain, you gain 3 paisa per BTT.
Now in this scenario, either of the three things may happen:
Case 1) BTT goes to INR 0.11
Your target price of INR 0.11 is hit and your target order is executed.
Here, the return is — (0.11–0.08)/0.08 = 37.5%.
So, if you invested INR 10000, you would get INR 13750 roughly.
Also, Bracket Order is easy to use and safe because you don’t have to monitor the market; everything is predefined, neither you fall prey to greed and fear, like most traders do.
Case 2) BTT price almost reaches the target but retraces.
In this case, you exit the market via Trailing Stop Limit.
What happens in this case is:
- Market reaches INR 0.10.
- Your Stop Limit also updates itself to INR 0.09 (since you set Trailing Stop Limit of INR 0.01)
- Market then makes a U-turn and as it touches INR 0.09, your order is executed.
- You make a profit of 1 paisa per BTT, which is about 12.5%, even when market did not touch the target price of INR 0.11.
Case 3) Market goes down from INR 0.08
If the market goes downwards from INR 0.08, the max possible loss you can suffer is 1 paisa per BTT, which is about 12.5%.
Now imagine the case where you set 10 Bracket Orders with different values, where 50% of them result in loss and the remaining 50% of them yield profit. Since the overall risk to reward ratio for all 10 orders is higher than 1:1, your net profit is bound to be positive. No doubt about that.
For instance:
- If out of 10, 5 orders yield 37.5% profit each, then percent profit gained — 37.5% X 5 = 187.5%
- And if the other 5 orders yield 12.5% loss each, then percentage loss incurred — 12.5% X 5 = 62.5%
- Net Profit = 187.5% — 62.5% = 125%
How to use Bracket Order during downtrend
For this to work, you need to sell first and then buy back when price goes lower. This is also called Shorting.
For example:
- You enter with Sell Order for 100,000 BTT @ INR 0.08.
- Set Trailing Stop Limit — INR 0.09
- Place a Target Buy Order of 100,000 BTT @ INR 0.05
- Amount you get — INR 8,000 (100000*0.08)
- Target Buy Order executes when market hits INR 0.05.
- You get 100,000 BTT along with a profit of INR 3,000 (8,000–5,000).
This seems well and good but yeh dil maange more, right?
Here’s how Margin Trading helps you increase your profit.
Margin Trade comes with:
- Slightly higher risk than Bracket Order
- kX Gains (Where k can be any number. So if you are doing a trade with 10K BTT or 50K BTT, the number ‘k’ would change accordingly.)
Using Margin Loan when:
(A) The market has downtrend
When you borrow during downtrend, your goal should be to::
- Set a Bracket Order to sell immediately
- Buy back at low when the market retraces.
- Set Trailing Stop Limit to minimize loss or even earn profit when market rises unexpectedly.
For example, if Rohit has, say, a net worth of INR 100,000 on Bitbns in terms of crypto + INR, he would be able to borrow 80% of his net worth i.e INR 80,000 worth of BTT which is around 1,000,000 BTT @ INR 0.08.
Now what Rohit does is:
- Places a Sell Order for 1,000,000 BTT @ INR 0.11 .
- Puts a Trailing Stop Limit at INR 0.12.
- Places a Target Buy Order at INR 0.08
With these orders in place:
- If target is hit, then profit = (INR 0.11 — INR 0.08)*1,000,000 BTT = INR 30,000
- If Stop Limit is hit, then loss = (INR 0.12 — INR 0.11)*1,000,000 = INR 10,000.
- Plus, you get 1,000,000 BTT back.
This is a highly profitable situation because if you place 3 such orders and even 2 out of them fail, you still gain profit of INR 10,000. {30,000 - (2x10000)} = 10,000
(B) The market has uptrend
In this case, the trader can borrow USDT on margin because USDT is fairly stable and trader can take a long position.
When you borrow during uptrend, your goal should be to:
- Sell at price higher than the price at which you borrowed.
For example, if Rohit has, say, a net worth of INR 100,000 on Bitbns in terms of crypto + INR, he would be able to borrow around 1049 USDT @ INR 76.2.
Now what Rohit does is:
- Sells 1049 USDT to get INR 80,000 approx
- Uses Bracket Order to enter the market with a Buy Order for 1,000,000 BTT @ INR 0.08 using INR 80,000
- Puts a Stop Limit at INR 0.07
- Places a Target Sell Order @ INR 0.11
With these orders in place:
- If target is hit, then profit = (INR 0.11 — INR 0.08)*1,000,000 BTT = INR 30,000
- If Stop Limit is hit, then loss = (INR 0.08 — INR 0.07)*1,000,000 BTT = INR 10,000.
This is again a highly profitable situation because if you place 3 such orders and even 2 out of them fail, you still gain profit of INR 10,000.
No matter what the trend, Bitbns has the tools. And now that you have the wisdom on to make the best use of these tools, we hope you are all set to earn loads of profit!
Enjoy trading with Bitbns!
Best Regards
Team Bitbns