“Trading Bitcoin! … at least my clothes are still on!”
Now that the euphoria has lifted, it’s time to point out some crypto dynamics,
specifically Bitcoin [BTCUSD] cuz it has the largest trading interest, and by far
has the largest dollar moves … I don’t care whether you love/hate crypto, the fact
remains it trades FREE of government manipulation, something you most
definitely can’t say about traditional financial markets which are under the thumb
24/7/365 of the manipulators … it moves while other markets sit and do very little
to nothing for days/weeks/months at a time [see chart of any FX pair for
evidentiary proof!] … you can trade on “open order” book platforms, proprietary
platforms, or traditional MT4 and/or MT5 platforms … you can choose between
“perpetual BTCUSD contracts”, cash market, or traditional futures markets … so,
you got a veritable buffet to choose from in how you want to trade Bitcoin
… “you want a dollar based account or a BTCUSD based account?” … there are
pros & cons of each, so there’s no right answers here.
First & foremost, what kind of trader are you and what is it you expect to get out
of “trading” a truly FREE market? … how aggressive or conservative are you in
your trading approach? … finally, do you really understand how this stuff trades,
or are you bringing your bias into BTCUSD from the bad habits you formed while
trading other markets? … bring bad trading habits to BTCUSD, and it’s “toes up”
for your account in 3 … 2 … 1 …
Let me start by reminding everyone reading this, that you don’t get anything for
free when it comes to trading anything … there is a price to pay FOR
EVERYTHING … when SHTF in BTCUSD, it doesn’t matter what house you’re at,
whether you trade perpetual contracts or spot on “open order” platforms, or
whether you’re on a proprietary platform or the MT4, the bid/offer spread in
BTCUSD is gonna widen, sometimes dramatically, and the dirty little secret is
THERE’S NOWHERE TO HIDE! … you hit the sell at the market button when
“Thelma & Louise” just went over the quarry cliff, and you’re sitting in the back
seat, and there isn’t anything going to help you from getting a truly shit fill
… [plan for the bottom of the red spike] … ditto on the upside as well with buying
spikes higher.
IMHO, there are several key items to think about before trading BTCUSD
[in any format] … 1) how are limit and/or market orders treated in terms of cost
[commissions], 2) what is the “total cost to trade”, not just the spread, and
3) what kind of exposure do I want in BTCUSD, meaning do I hold my account
balance in Dollars, Euros, or BTCUSD?
For any trader, the “total cost to trade” should be #1 on your list of important
items, and analyzing whether that cost is worth the trade versus a market’s
20 Day Range MA … on “open order” book platforms, [like PHEMEX] you get
PAID for limit orders, and market orders cost “bigly & yuge” … with BTCUSD very
close to 20K, market orders cost approximately $15 per side, meaning a round
turn [RT] cost of $30 … OK, there’s a 50 cent spread, so the total cost assuming
the worst is $30.50 … ahh but you say, I want to do limit orders [this is what
“The Syndicate” is attempting to do], but I can tell you that here lately there is
no guarantee at all limit orders can be gotten where you want them, and the
brutal truth is that once in what if you’re forced to get out at market if BTCUSD
decides to move violently the other way? … this means quite frankly you have
to be perfect in limit order execution EVERY TIME in a “bat shit crazy” market
environment, something I’m here to tell you can’t be done consistently … given
where BTCUSD was 2 months ago and the way it traded SINCE INCEPTION, yea
I’d say it could be done … where BTCUSD is at today and the conditions we
have now, and most likely will see consistently going forward, I don’t see how it
can be done … all that’s gonna happen is you’re gonna be sitting & waiting for
calmer conditions and they aren’t paying any visits … so in this environment,
and this is only for BTCUSD and not the other alt-coins, I don’t seriously think
you can profitably trade on any platform where market orders are gonna cost
you $20 - $30+ in RT commission costs … and what if BTCUSD rises up and
stays at a $30,000+ price? … here, RT commissions on market orders would be
$30 - $50+, and I’m sure as hell not gonna pay that to trade anything.
Over at Turnkey now, and today has seen a few wicked spikes down, the worst
being about $200 in 1 M1, and quite a few in the $100+ range … during that time,
the bid/offer spread went from around $5, out to the low 20’s as the market was
doing its best impression of “Thelma & Louise” heading lower at the speed of
light … as I said, there is no escape when SHTF … it was the same or slightly
worse at PHEMEX, both in contract & spot trading … however, as soon as all the
sell stops get filled at the bottom, and price stabilizes some, the spread quickly
came back underneath $10 at Turnkey, and within minutes it was back to around
$5 … OK, RT commissions are $2 per 1 lot [1 BTC] … in a panic move, no place is
safe if caught the wrong way, so IMHO it’s a wash no matter where you trade
… other than that though, when the market trading algorithm gives you a
“buy signal” [or it's time to get out by liquidating], are you gonna be happy
fooling around placing limit orders that may or may not get filled? … if the trading
algo has given the signal, there’s a very high probability it’s going higher, so
IMHO there’s a very high probability price moves without you … well, there goes
that profit opportunity! … as I write, nothing much is happening in BTCUSD, and
the spread is about $1 - $2 … add $2 for RT commish, and if the signal was given,
I’m in at less than $4 total cost … and quite frankly if the algo is right, that’s a very
small price to pay given the way this market moves.
BTCUSD, at least so far, doing its best to imitate EURUSD and basically sleep
… most of the movement seen in Asia & early Europe, and the quietest day so far
in at least a month … sitting up in the low 19’s this is extremely bullish for further
explosive gains coming, as sellers have tried and failed on numerous occasions
to blast it lower … dunno, we’ll see … I said in an earlier blog, the best case
scenario for BTCUSD is some kind of consolidation between 18,500 - 19,500 for
a few days to maybe a week or two, and out of the blue it explodes higher again
… so far, outside of the Thanksgiving Day Massacre, that’s what is happening.
I ran some numbers on the back of the envelope, to try and analyze the argument
between having your account in BTC or having it in Euros or Dollars … in an
environment like what now exists at Turnkey, and BTW we get that cuz of the
pricing power of the HFT’s that are LP’s, if you consistently made about 0.5% per
day trading BTCUSD, and certainly conditions present now afford that
opportunity, which type of account returns yield better? … Well, assume BTCUSD
is on a price trajectory to much higher price, if that kind of yield can be gotten in
dollars, in 5 years where would BTCUSD have to be, to be at the same place in
terms of dollar profits? … the answer is rather remarkable … BTCUSD would
have to rally 480X where it’s at now, meaning a price of about $9,000,000 … could
it get there? … dunno, but who knows? … I will remind readers, that back in the
day during gold’s first explosion up to the $800 level [1980], there wasn’t one
person alive who DIDN’T PREDICT GOLD AT $5000 within 1 - 2 years … NOT ONE
… and as we all know, gold fell back down into the $250 - $400 range for the next
20 years, before first 9/11 came along, then Ex-Preezy Empty Suit & his socialist
ways and here we are today at roughly $1800 in gold … so, while everybody is
making the case for BTCUSD to skyrocket, it could just as easily spend the next
20 years at lower levels, current levels, or slightly higher levels … who the hell
knows? … but, if I simply park money in BTCUSD and wait, it has to go to
$9 million in 5 years TO MATCH what I can make by trading it and earning 0.5% a
day … hells bells, half of that would be amazing, so while holding balances in
BTCUSD offers potential, it’s by no means a “sure thing” … the question is, can
it maintain dollar gains in a dollar trading account that doesn’t have overnight or
weekend risk to BTCUSD?
From my own anecdotal experience so far, all of my earnings held in BTC from
trading over the last 1 ½ years has done an amazing job, especially since
October 1, where it’s up over 90% in value … OK, now what? … and I know what
happens when bulls & bears become pigs! … I also know what happens to those
who sold Apple stock too early as well … so what’s the answer? … well, my best
guesstimate, and that’s all it is, is to regularly buy BTCUSD, whether from trading
profits automatically, or using money from other sources, and accumulate it
… quite frankly, I have a hard time wrapping my head around BTCUSD at
$9 million dollars ...how do you trade that? … what would that spread be like?
… and the RT commish would be astronomical!
On the other hand, I have an even more difficult time believing BTCUSD is
headed significantly lower and staying there, but hey, gold spent almost 20 years
in the basement of trading hell, so who knows? … all the while governments
printing money like lunatics … put a gun to my head, and I’d have to side with a
dollar or Euro account and make sure that I owned BTC as well [along with other
potentially explosive alt-coins as well].
Today sees BTCUSD slowing appreciably, especially once Europe got going
… now into the start of New York … still seeing IVIX INDEX levels well above 200,
so while it may seem calm, it isn’t … only by comparison to the last month does
it appear “calm” … are we in the “eye” of the CAT 6 Hurricane? … or is it finally
returning to some kind of post explosion “normal”? … too soon to tell really, one
day does NOT a trend make! … given the level of “scumbaggery” present in New
York trading, I’d have to side with “shit will still happen today” that hurts some
folks, just cuz that’s the way the cookie crumbles when dealing with the Wall
Street scum who have migrated over into crypto from other venues that are dead
in the water … range today so far since the Asian open is around $600
… 2 months ago that would have been considered “bigly & yuge” … fast forward
2 months and it seems “slow” … perspective, get some! … but just sitting up
here in the low 19’s watching paint dry & grass grow, somebody is gonna make
a move and this stuff is gonna explode one way or the other, and that move
[either legit or a fake out] is the one likely to do some damage today … but maybe
not, we’ll see.
As for “The Syndicate”, here’s my thinking right now, and i think it makes a lot of
sense … first, I originally put this together to take advantage of 1) a slow price
appreciation of BTC over time, and 2) at the same time make good money being a
“market maker” and booking limit order rebates … of course, that assumed one
big item … and that item is that trading conditions in BTCUSD would stay roughly
the same as they had been for a good long while … well, BINGO!, BANGO!, BOOM!,
that’s out the proverbial window.
I’m pretty sure all of you out there reading this, and are participants in
“The Syndicate”, already owned BTC before your participation & didn’t buy it just
to get in … but even if you did, your cost would’ve been no higher than around
14K … and we’re talkin’ fractions of 1 BTC … if the projections I made earlier are
even HALF RIGHT, BTCUSD would have to go into the millions of dollars for you
NOT to receive the equivalent dollar amount during the next 5 years … meanwhile
2 items of note: 1) only BTCUSD perpetual contract trading requires a BTCUSD
balance, while all other pairs REQUIRE Tether [USDT, the dollar stable coin], and
2) other markets such as Ripple [XRPUSD], Cardano [ADAUSD], & Algorand
[ALGOUSD], AMONG OTHERS AS WELL that are available to us, usually move
right along with BTCUSD, but more importantly their spreads make it such that if
need be we can do market orders and NOT GET BUTCHERED!
In the 3 I named above, making a market is definitely doable even if things get
wild in BTCUSD … therefore, I’m gonna switch from BTCUSD balances, and
switch over to USDT balances … and the way things are going as I write, that
most likely will be above 19K here in the next day or two …maybe, maybe not,
who knows ... if I had already done that, though, we would have already made
DOZENS of trades that would have been profitable, that either match or exceed
how much BTCUSD is rallying, so sitting IS COSTING US MONEY … our only
other alternative, is to sit and wait for BTCUSD to become tradeable & reasonable
again like it was [seemingly forever!] only 2 months ago, cuz it ain’t tradeable
now! … and the way things look, that ain’t gonna happen anytime soon … quite
frankly, I didn’t put this together to sit, I put it together to make money, and via
circumstances outside any of our control, BTCUSD has changed the rules for
trading itself … you simply can’t make a market in BTCUSD and NOT get hurt at
some point in the process, cuz it’s gonna happen … the other coins NO cuz of
their pricing at much lower levels … so, on to “PLAN B” … money is money and
time is getting wasted, so let’s make some! … at some point in the future, when
folks redeem, they’ll have the ability to either take USDT or BTCUSD, and that
adds some flexibility to the equation … in the long run, this will enhance
profitability, not deter from it … and in addition, some frosting got put on the
cupcake, and we’re all the beneficiaries of the 35%+ rise in BTCUSD since
“The Syndicate” started … if BTCUSD had held steady and we were up 35%+,
people would be “shatting their big girl panties”, so keep things in perspective.
Over at Turnkey in BTCUSD, a very quiet day until about 20 minutes before the
“Fix”, and here we go … well, flashing warning lights are on, as far as I’m
concerned … even though banks got no power or influence in BTCUSD, the
action in other markets is dragging it higher, and not gently I might add … and as
soon as we quickly rally $250, it turns and is straight down in 10 minutes off
$300+ … shorts get killed first, longs follow seconds later, and chalk up another
“Fix” to 2 “coincidental” moves … sure, whatevs! … meanwhile on the way up
the spread behaves quite nicely, maintaining less than a $5 spread most of the
time up … then comes “Thelma & Louise” and the spread goes out to the low
20’s as we fall aggressively lower … still better than over at PHEMEX where it got
even uglier in their spot cash trading, as the spread when out to over $30+
… contracts trading was all over the place … as I said earlier, there’s nowhere to
hide when SHTF to the downside.
From experience, I know better than to make trades around the “London Fix”,
and crypto is no exception … and if today doesn’t teach you that, then wake the
hell up & remember, cuz for the most part they’re sucker moves … but, not
automatic … and while maybe you can get away with a EURUSD trade, BTCUSD
is another predatory animal altogether, and when it turns it redefines the word
“ugly” … and it does that regularly! … so far, after 2 days of trading it in my own
account, I’m exceptionally well pleased with the conditions … from prior blogs, I
warned of potential problems BTCUSD may face if Turnkey ever got round to
listing it … well, I must give them credit where credit is due, cuz they’ve done it
right … and cuz of that, I recommend Turnkey for an account to trade BTCUSD,
and the affiliate link is up in the right hand column, right above PHEMEX … next
week, I’ll be reopening the PAMM / MAM for further participation, cuz I’ll most
likely be exclusively trading BTCUSD going forward.
No trades today for “The Syndicate”, as trading conditions in BTCUSD simply to
“bat shit crazy” … IVIX INDEX LEVELS today running between 250 - 500, and
although down from prior days this week, that ain’t saying much. I’ll be looking
to make the switch to USDT here very soon, most likely within 24 hours or so
… and as soon as I do, we’ll most likely be trading and making a market in
XRPUSD [Ripple] immediately. Alternatively, my other 2 candidates of choice are
ALGO & ADA. So, that’s what’s immediately ahead!
Trading in the PAMM / MAM in BTCUSD will start tomorrow, now that I have test
run conditions myself and am happy with the results in both “bat shit crazy” up
moves & down moves … it isn’t any better anywhere else and can be a whole
helluva lot worse! … this most definitely the market to trade, given 1) its
propensity to move, and 2) excellent spread, & the very best RT commission rate
available anywhere.
Outta here… until tomorrow … full steam ahead! … Onward & Upward!!
-vegas
