This is a blog around how I invested only $20 into Future trading account and if I could make this into a significant amount of money.
Now I had nice successes on week 1 , week 2 and week 3 and I made over $100 from trading around the funding rates. But then I got knocked back by making a stupid mistake in Week 4 which left me with $70. You can read about them here.
Week 4 was a tale of two halves. I started off having a fairly disappointing week 4 so I was lacking in motivation. But I stuck with the plan. I have two guidelines.
- Only trade tokens where funding rate is negative.
- Do not go more than 5x.
Now I have been tinkering for 4 weeks around how best to trade the negative funding rates. Do I go long and stay long.
Every 8 hours when the countdown went to zero I would be awarded commission but there would be a sharp drop. I found that if the funding rate remained negative then this was the best method as normally the price would come back fairly well. It would all depend on the TA of course. If you go long at the top of a big green candle then you are toast. If you went long before the token really took off then you are sitting pretty on a nice profit and the commission every 8 hours. I could find the funding rates on Binance or on Twitter
https://twitter.com/BinanceFunding/status/1614171211876933633?s=20&t=FkKVOdh3FwaBzoAuM-Pv2Q
- BinanceFunding
Source
Sometimes I went short after the commission counted down to zero but I found I was too late here and the token plummeted 1 minute before the countdown ended so I had to adjust to my short to before the timer expired. I would take the hit on the commission (negative commission where shorts pay longs) but I would ride the price down so that my profit was anything made after the cost of commission and this worked a treat for some.
https://twitter.com/SilkyLounge6/status/1613539084718284802?s=20&t=FkKVOdh3FwaBzoAuM-Pv2Q
- SilkyLounge6
Source
Now the interesting thing around week 4 was that Bitcoin was pumping and so were the alts so there was not that many negative funding rates around. If there was then they were relatively nominal and not worth the commission. A low negative value represents not only small commission fees but it signifies that the market is about right so there will be no large swings. So a quiet market was a pain for me in one way. But I did find another angle here with the funding rates. I started monitoring the history. If a funding rate increased negatively by a few -0.01% I kept an eye on it. I would watch new tokens arriving into the negative funding rate market. There wasn't many in there for a start so when one arrived I would look it up and do a bit of TA.
I found one such coin like this called PHB. I never traded it before. I is an AI coin apparently but I don't really care what these coins do in their personal. I am here to make a profit in bull or bear and I am not attached to a currency like some losers. So I went long with my $60 at 5x and wasn't expecting much. An hour later $PHB then skyrocketed.
From my $60 long I made $150. I flipped the top and made another $83 on the way down. At one point I had $280 in my account which is 14 times my initial investment. So the first thing I did was take my $20 investment and put it back on my card. This cost me around $22 dollars but it was the principal. I now had $260 clear profit to play with. If you are not taking some profit back out for yourself then what is the point. I took 2 more withdrawals out. 1 x $10 which I leveled up Meridian to level 5 from level 4 on Splinterlands and 1 x $20 which I purchased SPORTS tokens with as I post loads on Sportstalksocial so I wanted to power up a few million SPORTS tokens because they are cheap at the moment. So out of my initial investment of $20, I had paid myself back, purchased $30 of stuff on Hive and there was one last thing I did. Put $20 extra back into my Binance wallet as this run was not going to last forever.
https://twitter.com/SilkyLounge6/status/1613681990301061121?s=20&t=FkKVOdh3FwaBzoAuM-Pv2Q
- SilkyLounge6
Source
So with my investment paid back the shackles were off.
A couple of more trades would have has me at $500 and then I could start making serious money. I kept trading $PHB as it was still negative funding at 0.23% and this is where I made a mistake. It kept retesting and retesting. Now I rode this bad boy up from 63 cent so I was always weary fall back to this level, But the technical analysis told me that it was still going to go up. So I took a risk and went long at 0.86 cent.
Now alot of people think crypto Twitter is a minefield but I have to say , I get information from some accounts around different TA that I do not see. It improves my knowledge of the coin and I think Twitter is a must have tool if you are into trading. The more knowledge the better. You can find out how a coin pumped or if there are any launches coming. Also so of the traders do excellent TA. So one comment from my below tweet pointed out something I did not see. That there was a massive sell wall at 0.89cent. Now I never really took notice of this. I was expecting the token to go to $1 again and more. I was in a long position and this sell wall was a hindrance. So as soon as the coin hot 0.86 cent I cashed out. When the coin hit 0.89 I decided in my stupidity to short on the back of this sell wall as I thought this was the end of the run. Now remember I was in a long a few minutes before that until this information. I normally don't sleep on my trades but I slept on this one on Thursday night. I woke up on Friday morning and I was minus $90 in the red. The token had smashed this sell wall and went back up to $1. If I had stayed in my position I would have been up $90. Not only this but by 2pm that day the coin went to $1.14 which was my liquidation point. And that ladies and gentleman is the end of my run.
It has been emotional and I have learned loads without breaking the bank and I really enjoyed my time back trading. So much so that I am going to keep it up and trust my instinct more. I have put that other $20 to work from today so I will let you know how that goes. I have more of a solid strategy now so I can start making profit right from the start, I have some work to do on my average profit as I am not staying in long positions long enough. The first strategy was get in and get out quickly but this does not return the reward for the amount of risk so in the end I lose. So I will fix this. I also learned I need to cut my losses better as tomorrow could be another $200 day. S20 more dollars investment and I immediately opened this long based on my criteria and closed just there.
Nice 50% profit already. This road to $100 may be shorter this time around but there are many traps and pitfalls. I wonder how the top crypto traders actually do it. So I end this trial blog with my $20 cost covered. $20 made, a level 5 summoner and 2 million SPORTS. Nothing to be ashamed of and we will go again!!