Hello and welcome to week 4 of my trial and full disclosure around my aim to go from $20 to a nice few pound by selecting tokens from the funding rate percentages.
My two golden rules as always are
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. What the hell does that mean you say? In the world of Futures if there is a buyer then there is a seller who is more than likely more cleverer than my good self. Make it hard for the clever people by being on the right side of the funding rate. The funding rate is around to make sure the Futures price doesn't stay too far away from the spot price. So the funding rate is a mechanism that closes the gap. A negative funding rate is where short sellers pay the people in long positions. 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 grab the funding commission and the profit from the trade. I close my position for profit and move onto my next trade. This is not financial advice but a mere diary of how long $20 can last in the trading world.
You can the read my last 3 weeks of my futures trading trials here.
So I left you in week 3 all rosy just about to hit my first major milestone. The 100 bucks. I feel whenever I hit the milestone in crypto trading things come crashing down soon after and this became the case for me last week as well. So today I am not telling you that 100% of my trades won. Quite the opposite to be honest. I was nearly liquidated by selecting the wrong asset to trade. Crypto twitter will tell you about all the trades they made that won. They never tell you about the losses and delete the tweets urging people to go long or short. I shall tell you the truth. Below is my profit and loss over the last 30 days. I am up but barely but alot learnt. One trade did what was a going to be a great month turn into a Shakespeares tragedy.
Dent
Dent is an OG coin and has been around longer than than 99% of crypto coins. I wouldn't call it a sleeping giant but not much happens trading wise. Things go slowly. That was until 4th January and all of a sudden it was pumping. It went from 0.000500 up to 0.001300 in an hour. Check out he spike below. The funding rate was over -3% which is unheard of really. I waited for Dent to come back down to its support level of 0.00750, seen that the funding rate was still a negative 3% and decided to go long. It was a foolish mistake and greedy. I should have never been near it. Now my thinking was it was going to pump again and I didn't have that far to fall in around the 0.00600's
And fall it did all the way back down to the 0.000640. My liquidation point was 0.000549. The funny thing about it was that the negative interest remained at around 2% each time so every 8 hours I was earning $3 in commission. This was making my liquidation less and less every 8 hours so I was never really in big trouble. Howver I was $75 in the hole. I held my ground for 5 days earning around $30 and decided to cut my losses. I was lying in bed deciding whether to do it or not. I hit the button at 12:50 am in the morning expecting another drop at 1am. Murphys law came into play. What happened at 1am. Dent mooned again after I cut my losses. If I stayed in for 5 minutes longer I would have been home and dry breaking even with even a little profit but alas. This is easily the most annoying part of crypto.
I was eager for Dent not to be the boss of me so when it mooned a second time, I shorted at the top and this time I made $20 back so it brought my balance back up to around $60 to which were I am at right now.
Nobody knew why it pumped. Not even CT. Then it came out that it was listed on a Mexican exchange. It wasn't the normal moon, It was straight up rather than steps. I diverted from the plan and got burned by it. I shall not be doing that again in a hurry.
$Football
So I went back licking my wounds to good old $FOOTBALL coin on Binance. It always has a negative funding rate so if you wait for a bottom and buy in low then you can avail of the negative funding commission as well as the increase from going long. $FOOTBALL is an interesting one as it always seems to be up in the top 5 negative funding percentages so it is an easy win if you have been battered by a storm and nearly gone overboard only to find refuge in a bay. $FOOTBALL is becoming my safe haven. At least -0.25% commission every 8 hours. 4 or 5 days of this adds up.
https://twitter.com/BinanceFunding/status/1611392904886460417?s=20&t=ZQkhjkbwLIfNz0_WFIoidA
- BinanceFunding
Source
There was always going to be a bad week. I made a couple of mistakes trading $JASMY as well. With $Jasmy I saw the negative funding rate and decided to buy too soon. 2 hours before the countdown. So it plummeted before the countdown and barely came back to breakeven after the countdown. JASMY is an interesing coin based on the Japanese Yen and it is basically Japans answer to Bitcoin. Again best to avoid any coins answer to Bitcoin if its trading at less than a half of a cent. It was another mistake that I was licking my wounds after. Trading in Christmas is hard so I am glad to be back to normal. So for the first time in 4 weeks I am coming out with a loss. I am up overall however as I have $65 in my trading account right now. I need to push back to $100 over the next couple of weeks and push on from there and start making 2 trades instead of one.
Key Learns this week
- Never buy in on a pump that is unexplained no matter the funding rate.
- Make your decisions closer to the countdown window,
- Cut my losses sooner and hold my gains for a while longer.
- Don't be a hero McClean. Slow and steady.
- Don't get
deadliquidated.
So hopefully I will be back in the green for next week so I can be back at $100. Stay tuned for week 5 next week.