Cryptocurrency Insurance

Blockchain | Crypto News | Exchanges | Latest News

As cryptocurrency continuously evolves and gets adopted, the question of insuring it has come up. In the last year alone, a few cryptocurrency exchanges have been hacked and millions of dollars lost like Coincheck, Coinrail, Bithumb, and Bitgrail. A report posted last year on Coindesk estimate a value of $2.7 million is stolen every day from crypto exchanges by hackers. Cryptocurrency as it stands is more lucrative than regular fiat and that is why it attracts the criminal hacking activities that plagues most exchanges. Enter global insurance companies.

So far a number of insurance companies have emerged with insurance services for cryptocurrency. They include XL Caitlin, Mitsui Sumitomo Insurance and Chubb. BlockRe is one insurance company that is solely dedicated to offering crypto insurance for digital asset holders and blockchain users. Last year, there was a conference held regarding insuring cryptocurrency dubbed Decentralized Insurance Developer Conference. Crypto insurance does not come without its risks. And I will list a few of them here:

  1. Currency of Claim – in normal settings, insurance claims are paid out in the currency of the respective countries where they were taken from. Compared to fiat currency, crypto is very volatile and this poses a problem in paying out the claims. For example, Bitcoin could be worth $18,000 today and $10,000 the next, which means that the sum assured would change from time to time. To avoid such problems as to if the company has set aside any enough reserves in the event of these occurrences, some insurance providers offer to hold some of the crypto in order to make the claim payments.
  2. Unpredictability – one of the most convenient ways of insurance services provision is the reliability of the market trends and history as such. Many companies rely on the market trends in order to make their calculations as well as draft their policies. As for cryptocurrency, the nature of the market is one that is almost impossible to predict. It also does not help that the entire system is based on technology which is also highly unpredictable and evolves consistently. Keeping abreast with developments may not be the easiest thing nor the cheapest for insurance companies.
  3. Anonymity – it is literally the whole modus operandi of cryptocurrency transactions. Which attracts a lot of negative users such as terrorists, fraudsters, hackers, corrupt politicians, criminals and such. Now, insurance policies cannot be issued to anonymous clients, which limits their services to a great extent.

As it stands, these issues have greatly affected the idea behind offering insurance services as there are very few takers, and investors are looking for ways to protect their assets. Marsh & McLennan insurance company recently formed a team of 10 professionals to service blockchain startups and AON which stands as the world’s second largest insurance brokers, offered crypto coverage for Metaco clients.

According to AON, the insurance policies will offer crime insurance products to Metaco clients that use both online and offline wallets. The step by AON will attract other insurance providers into investing in cryptocurrency insurance especially for hot wallets and exchanges. As it stands, the supply of digital asset insurance does not keep up with the demand. There is over $100 billion in cryptocurrency circulation but about $6 billion in insurance coverage available. It is also widely assumed that the cost of insuring cryptocurrencies will not be for the weak pockets; for example, insurance provider Allianz offers crypto insurance services but does not advertise the products on their website. Contacting the brokers directly seems to be the only option as to find out the extent of the policies offered. An expert on the idea of digital assets insurance stated that the cost of premiums in a year could go as high as $200,000 and that is for companies as opposed to individual clients.

Other strides into crypto insurers is the partnership between Gemini and AON to provide custody of digital assets. Another move in the same direction was made by Lloyd’s Bank and Kingdom Trust Cryptocurrency Insurance. The latter already stores over thirty assorted cryptocurrency token types. In addition, Lloyd’s Bank also provides insurance coverage for 2% of Coinbase’s funds.

In conclusion, there are a few concerns as to developing insurance products for cryptocurrencies. Namely being that there is a gap in information about cryptocurrencies and blockchain which means that the transparency aspect has to be addressed. Another issue is that concerning cryptocurrency value in the sense of settling claims since policies are in crypto but settlements are in fiat. Companies like AON are paving the way for other insurers in the sense of market evaluation. Another issue would be the accommodation of individual cryptocurrency holders being able to access insurance directly at affordable rates as compared to offering the service to exchanges and companies only.

On the first of May, CoinMarketCap announced that all the exchanges that will not provide mandatory data by June 2019 will be promptly removed from their calculations. The cryptocurrency data provider stated that the reason for this move was to provide greater transparency, accountability and accurate disclosure to the crypto space. In pursuit of transparency, all cryptocurrency exchanges will be required to provide mandatory API data including live order book data and failure to comply to this, CoinMarketCap stressed that any exchange will be promptly removed from its price and volume calculations. This condition will come into effect as of the 14th of June 2019.

Fast track the issue of crypto exchanges not submitting factual information as regards trading volumes or rather the concept of wash trading. Was trading by definition is a scenario where a trader buys and sells a security for the express purpose of feeding misleading or wrong information to the market concerned. Why CoinMarketCap is becoming strict with exchanges is because it is the number one provider of crypto trading information. As of 25th April 2019, Forbes conducted research regarding crypto exchanges and the legitimacy of their trading volumes.

Cryptocurrency exchanges are generally unregulated and this is beginning to become a concerning the maturity of the crypto space. The Blockchain Transparency Institute compiled a report at the end of 2018 detailing information collected from the top 25 crypto pairs from sixty seven different exchanges listed on CoinMarketCap and came up with shocking levels of wash trading evidence. The practice of wash trading is apparently so rampant where traders buy and sell their own orders to create an appearance of higher trading volumes than there really are as pertains a particular asset.

Yesterday, Cryptobriefing posted a damning article after the findings of the research carried out by the Blockchain Transparency Institute pointed fingers at the crypto exchange Binance being involved in wash trading. The percentage of market manipulation displayed on Binance was not specified but it is worth noting that there are a good number of exchanges whose numbers are over 90% genuine such as Liquid, Kraken, Coinbase, Poloniex, Lykke, Gate and Bisto with Kraken being the ‘cleanest’ of them all. Kindly take a quick look at the graph provided here at the time of the report showing the real volumes as opposed to those projected on a few exchanges.

The Forbes article was coined ‘95% of volume could be wash trading…’ which seemed to agree with one of the key points from the research by Blockchain Transparency Institute that most of the trading volume pairs reported were in actual sense about 1% of what was presented. I do not know about you but I find that grossly flabbergasting. I mean there are so many strides being made in cryptocurrency and I can imagine as the investor pool diversifies and increases, they would not be happy to know that the figures being presented to them are fictional. For the most part that is. Even an anonymous crypto surveyor of sorts based in Cyprus known as Cryptointegrity comprised of independent volunteer researchers from Europe and Asia reported in February 2019 that as high as 86% of trading volumes are completely artificial.  

So what is the resolve by CoinMarketCap going to do? The data provider partnered with Data Accountability and Transparency Alliance (DATA) on a three part executive agenda. The first part is as mentioned earlier, the mandatory provision of data by exchanges that wish to have their calculations remain on the site. The second phase is in-depth analyses of the information from the exchanges, which might include wallet addresses information, live market pair status and trading data history.

The third phase is providing data users with informed insights into blockchains as they continue to grow verified exchanges onto their databases. As it stands, 12 crypto exchange companies are on board. Wash trading effect reaches as far as trading bots that make all their returns based on the information provided on exchanges. Not to mention potentially ruin investment opportunities especially with institutional investors that are steadily becoming the driving force behind adoption and evolution of crypto and blockchain.

Not to mention that the SEC could potentially use this as a basis of their growing concern over the volatile and unchecked nature of digital assets seeing that until now Bitcoin ETFs are yet to be approved. I mean the reality that the genuine trading volumes are as low as 8-50% and it’s a point to impress users, then crypto stability is in big trouble. It causes a lot of issues regarding transparency as well as trust in the information that every crypto enthusiast relies on. The extent of the effect of wash trading remains to be seen but hopefully the CMC can restore some sort of verifiable figures as soon as possible.

 

The company had earlier announced their intention to register their very own crypto exchange by the end of April, at the conclusion of their registration with the country’s financial regulator. The company was incorporated in 1999 with the aim of giving merchants more power but at a lesser cost. The company advanced from a simple ecommerce start-up where they generated credit cards and were operating an internet bank, to this point where they are now involved in the global financial sector.

In 2012, the company made English its official language from the traditional Japanese, to allow the company to market itself to a wider audience and potential market. Fast forward to the introduction of digital currencies and the company began accepting Bitcoin and made plans to launch their own coin. The company has invested in various businesses as it has picked up expansion including fashion, banking, online retail services, media and travel. The company has even been likened to Amazon, due to its huge success in the last 20 years.

In 2018, Rakuten had announced that it would be acquiring Everybody’s Bitcoin Inc, which was a Japanese crypto exchange company via its subsidiary, Rakuten Card. The company was acquired for 265 Million Yen. Prior to this, the company had sponsored research into blockchain technology and in 2016, launched Rakuten Blockchain Lab, dedicated to blockchain technology. At the time, the company had a reward system where users would be awarded points for using Rakuten services and they could convert these points into tokens using blockchain technology.

Registration of its cryptocurrency exchange is just one more leap in the right direction, what with the innovative cryptocurrency sector. The announcement was made today and users should be members of the Rakuten Bank and will have the liberty of signing up using a web application, or go through multiple layers of the authentication process. The KYC procedures that Rakuten hopes to implement will play a major role in the adoption of cryptocurrency exchange, and will also provide a 24hour customer service support system.

The company received a license from the Japanese Financial Service Authority (FSA) to function as a cryptocurrency exchange, following the Agency’s dedication to promoting and controlling cryptocurrency exchanges at the start of 2019. The news by Rakuten is commendable following that the Japanese market is steadily growing in the digital assets arena as evidenced by Japanese messaging giant Line, which launched its own exchange Bitbox, and the purchase of the controversial Coincheck by the Monex Group. This week, an influential big investment player in Japan financed over $200 million into Bithumb on its first round of funds drive. Yahoo! Japan which also owns 40% (equity that was purchased for $19million last year) of the cryptocurrency exchange firm Tao Tao will begin its operations in May 2019.

The faith that the FSA has in Rakuten will go a long way in advancing the blockchain agenda of both bodies especially with the amalgamation of the latter which is known for its efficiency in management, even in the ongoing cryptocurrency bear market.

 

 

 

 

Aion is the first third generation multi-tier blockchain network focused on interoperability between other blockchains on a global scale. There are hundreds of blockchain networks today and it is only logical to premise that they will increase in number. The Aion coin is going to be used for data and value exchanges, by enabling a trust less, smart contract between blockchain systems.

The token was produced by a Canadian blockchain enterprise firm Nuco, which was initially working on a blockchain solution for Deloitte, and in a nutshell the token will transform blockchain into some sort of decentralized internet. That could replace current database solutions as well, such as those used in health, insurance, streaming media, savings products, supply chains, etc. Aion is born out of the Blockchain Interoperability Alliance, in which many other projects on interoperability are underway, such as Ripple, the Fusion platform and the Lightning Network.

Cross chain technology strives to bring together many independent blockchain systems onto a single decentralized, world-class supported platform, using a ‘token-bridge’. For example, if a business is run on a specific blockchain network, clients from other blockchain networks can also transact with that business.

Aion has also partnered with Moog Inc, to build a blockchain solution that will propel the aerospace and defense company into the fast evolving crypto world. The company also partnered with Amberdata, a data processing company specializing in blockchain intelligence, infrastructure, token utilization and transactions, and on-chain decentralized applications. In October 2018, Aion and ICON were both integrated into CryptoCurve Platform, which was the first to be launched through Wanchain’s WanLabs Initiative.

As regards performance, Aion current circulating supply is 291,866,662 out of an estimated supply of 465,934,587. The highest price peaked at $11.10 in January 2018. At the end of the token sale in November 2017, it had raised $20,000,000 worth of Ethereum and was an ERC-2- token on the blockchain. The Aion Bridge (launched in April 2018 and dubbed Kilimanjaro) allows the transfer of ERC-20 token on Ethereum to become native Aion coins. Aion is mined via a modified Equihash algorithm and has a bounty system that rewards community members who contribute technical support.

The token swap from ERC-20 to native lasted until November 30th 2018. It is accepted on several crypto exchange markets like BitForex, DragonEX, CoinBene, Binance, Bilaxy and BCEx, and trades over $4 million on a daily basis.

Aion founders stated that there are five types of users that can use the Aion blockchain:

  1. DApp developers – the lack of interoperability limits blockchain developers from making advised transitions across different platforms.
  2. Enterprises – crypto industries can now be easily connected seamlessly.
  3. Validators – people who monitor and validate blockchain ecosystems can now use a single platform to do the same.
  4. Bridge Builders who can scrutinize interchain transactions.
  5. Start-ups – cryptocurrency and blockchain is steadily being adopted worldwide and providing blockchain based solutions related to their niche will be more efficient via the Aion platform.

Aion’s future seems greatly achievable in terms of replacing the internet as we know it. Third generation blockchain evolution aimed at bridging participating networks is a crucial milestone that will hopefully be achieved by Aion and pave way for further implementation of projects in the background. If this works, cryptocurrencies that are open to adoption will gain value and stabilize.

 

 

 

Digital Asset Financial Exchange is a Chinese cryptocurrency exchange with its headquarters in Singapore. The exchange is owned by the company DigiFinex Ltd which is incorporated in Seychelles and exclusively caters to the Asian market. The exchange has risen to the radar of the online cryptocurrency community due to its heavy trading volumes that exceed $400 million daily, coming into stiff competition with Binance, which has dominated the exchange market for a while now.

This is no mean feat considering that there are over 500 active crypto exchanges worldwide with a user base of more than 34 million crypto wallet holders. DigiFinex was incorporated in 2017 and have astonishingly managed to establish themselves as a trusted digital exchange. Apart from trading their own coin, DigiFinex coin, DFT, the exchange provides trading services for many blockchain based assets, including recently launched Gemini dollar.

The DFT token is an ERC-20 token based on Ethereum smart contract system, with a liquidity value of $2.1 billion according to CoinMarketCap.  One of the reasons why the volume on this platform is so high is that the company’s client base is strictly in Asia, which contributes to the bulk of daily cryptocurrency and digital asset trading more than anywhere else in the world. DigiFinex has a special quality in that its customer protection is its paramount selling point.

Annual audits are conducted by investors, in addition to the fact that the exchange company is one of the few that are SOA audit certified. So far, the company is yet to be subjected to a single security breach event. DigiFinex founder Ned Kee also stated that the company does not delve its resources into marketing but instead the bulk of their budget is spent on security and performing identity verification according to KYC requirements.

This is not only towards their clients but also their listing policy is very strict for interested parties that intend to list their projects on DigiFinex. The potential projects undergo a vigorous verification process which is then submitted for voting and cooperating. In a nutshell, the voting process is based on the volumes of the proposed token to be listed. As such, the token is run for a five day trial and if the trading volume drops below 200,000 CNY per day, it is promptly delisted. This policy is also applied to assets that have lost 90% of their initial valuation.

Another feature of the exchange platform is its real time accounting and transaction processing service. This is the case for single wallet users or multi-layer wallet holders, which is enviable considering the collective different signature addresses. It is probably for this reason that their trading costs are a little friendlier than most crypto exchanges. It charges a standard fee of 0.20% competing with the 0.25% industry average. On Binance, there is a 25% on all fees paid in the DFT token.

DigiFinex also provides a reward system for trading with their native DFT token. Rewards can be obtained when a user locks the tokens and completes specific trading amounts. It also supports 149 trading pairs like BTC/USDT, BCH/USDT, LTC/USDT, ETH/USDT and many more. The trading model is very similar to that displayed on Binance, including the rewards system which depends on the volume of trading accumulated between makers and takers over a 30 day period.

In 2018, the company launched a limited period DFT mining exercise that lasted from April to August 21st. the mining exercise practically catapulted the company from 50th position to 11th in a few months. The reason they halted mining was so as to prevent an overflow of DFT which would lead to a decrease in value, which was a smart move in my opinion.

However, the exchange is not all rosy as there are a few limitations that I need to point out:

  1. The application is only available on iOS based devices meaning a lot of potential clientele is losing a great opportunity to trade on the platform.
  2. The application is not very advisable for seasoned traders due to the fact that their trading features are very limited, such as the fact that there is no stop order or margin trading.
  3. Since the exchange services are geographically limited, there is absolutely no way to open an account from say like the US, which again limits participation and in a way sort of makes Binance a preferred choice, due to global expansion.

What are your thoughts?

 

 

 

 

 

At the onset of cryptocurrencies and blockchain technology in general, one of the precedented notions was that digital assets could revolutionize the traditional banking systems worldwide if not replace it all together. The nature of cryptocurrencies has however caused such a furor in conventional banking regulations that still poses a challenge to crypto startups to date. The decentralized nature of digital assets which means that the trade and exchange of these assets does not require regulation by a third party. Also the value of digital assets is based on the backing that it gets from investors, meaning that their value can go as high as the levels hit by Bitcoin at the close of 2017.

Once the wider population started to become interested in cryptocurrencies and the blockchain technology behind it, it was at first regarded as a new tech hype not much unlike the discovery of the internet and that it would die down. Blockchain as it turns out is more revolutionary than it was assumed to be what with its reduced transaction costs and effective cross-border transactions.

The major shift has allowed people who could not access bank and trade services if they need it. They no longer have to go to a bank cap in hand to request financing which are attached to high interest rates. One of France’s banking Giants actually projected that blockchain technology would eventually make banks redundant. As far as regulation goes, it is currently the biggest pitfall in blockchain being incorporated in banking. The question on regulation is also on the fact that banking super players are not convinced that blockchain technology has matured enough to warrant large scale application.

If larger companies do not serve crypto companies it will be a daunting task for smaller banking players to confidently take advantage of the untapped cryptocurrency market in terms of clientele. In 2017, the Financial Times published an article on the attitude of banks across the UK, that forced crypto companies to seek banking services outside the country, on the premise that crypto trading is riddled with fraudsters. Crypto players view the negative perspective of banks as that the competing technology poses a threat to banking exchanges such as Western Union, which was pitted against Ripple XRP exchange last year and the exchange rates for the cryptocurrency had not reduced. The founder of Profede, Juan Imaz, stated that banks will always feel threatened by blockchain and digital assets because they take away control from them, instead of taking advantage of the benefits offered by blockchain technology to make banking accessible to a wider population.

Bitpay Chief Commercial Officer, Sonny Singh said that the company has been turned away by many banks. The company has the same grievances as those faced by NKB Group, a blockchain investment firm that is still struggling to commence banking relationships due to the high resistance of banks. Never mind that at the G20 Summit in 2018, finance ministers from leading economies highlighted that blockchain technology would go a long way to promote financial inclusion in the financial sector.

Granted, cryptocurrencies face the problem of price stability and regulation and blockchain itself needs to overcome scalability and speed challenges. Technology is characteristically incremental in nature and this should not hinder banks from including crypto into their financial functions. It is not all gloomy as some small banks have taken the risk and included crypto companies as clients such as Silver Gate Bank, which is a state chartered bank based in San Diego California.

Michael Hudson, CEO of Bitcoin investment firm Bitstocks said that following the attitude of UK banks, his company had to procure the services of Gibraltar and Poland, who’s banking systems and crypto jurisdiction are more stable. However, he did mention that the fact that the company has to look so far for services, is disruptive and affects the confidence of clients and is not cheap either.

 

 

 

 

 

DRIFE, a solution to centralized ride-hailing

Drife.one introduces the DRIFE platform, a decentralized transport ecosystem powered by the blockchain. DRIFE’s objective is to disrupt the existing ride-hailing business model and eliminate the corporate intermediaries involved in the transactions. It’s also a system designed to empower the value creators of the ride-hailing ecosystem. In the emerging market of private transport services, these value creators include drivers and community developers.

Private transportation platforms have created a new paradigm for the industry. Unlike the taxi industry, the type of customers has changed. The current obsolete taxi model has been a hot topic in Spain (still an unresolved conflict) and also in many other areas. The basic needs may not have changed, however, our specific needs do.

Technology has created new emerging markets, new needs and therefore new niches. However, in this comparative framework, traditional taxi systems have hardly changed their way of operating. At the same time, viable alternatives have varied the model in a scarce, insufficient way.

 

Advantages of the DRIFE platform over the current model

Taxi companies regulated by states or transport authorities have evolved very little. This has made things difficult, the scant adaptation of the business model for all parties is clear. This leads to various problems, income gains minimized under pressure, drivers suffering from strict labor policies, and to top it all, this added to slow and expensive bureaucracy. Thus we find several points to review.

Generally, the major value creators in the transport service chain are oftentimes taken for granted which makes the problem linger and complex even more.

DRIFE is focusing its efforts on changing the trend by creating a global standard service capable of restructuring the ride-hailing ecosystem within the transport sector. This is where the advantage of blockchain technology comes in. Once introduced, it is capable of disrupting systems and restoring balance to the economic system.

Competition within the ecosystem may already be fierce as leading industry giants like Uber have far reaching market influence. However, the advantage DRIFE holds lies heavily on its decentralized

methodology and governance structure based on the blockchain technology, which is expected to accelerate DRIFE’s objectives once it enters the market.

 

 

The model proposed by the DRIFE platform

In the initial stage, one of the incentives introduced will play an important role. Nowadays, in many real scenarios, drivers see their own colleagues as direct competition. This breaks collaborative community relations, disempowering its members as a final result. Drivers in DRIFE’s ecosystem receive incentives for introducing other drivers to the platform, thereby fostering the growth of the service.

At the same time, it creates synergies for community building among drivers, an essential part for the creation of value and consensus. Since payments for service on the platform is conducted via peer-to-peer (P2P), intermediaries are eliminated alongside their unreasonable commissions.

This is by nature an improvement of the service, including social benefits. Better insurance associated with vehicles is a case of social benefit (for all parties), and is only possible in a scenario in which the driver can afford to pay. Empowering the driver, again, results in better service and better legal coverage for the parties.

As it is well stated in the Drife.one whitepaper, ride-hailing is essentially a cloud-based business. Unlike the traditional taxi industry, the successes of these platforms depend to a large extent on user experiences (UX) and the design of the user interface (UI). Two very complementary elements that play important roles in any ride-hailing platform.

Drivers and passengers are two essential parts without which the business model would not make sense. However, everything works well thanks to the diligent efforts of the developers. This completes the circle. In a consolidated digital revolution, developers are vital for everything that happens “behind the scenes” materialized without influencing the final experience consciously for the user. Everything on the platform should always work seamless as far as the end users are concerned.

 

The importance of developers in the new digital era

The developers, on the DRIFE platform, have the potential to create useful facilities within the application. This tends to improve the riding experiences, and therefore, optimize the ecosystem. Developers can also detect and correct mistakes, unfortunately, on the developer’s side, this is often overlooked.

In a case where the development of displacement / transport applications is outsourced, it is easy for developers to decide not to intrude. Sometimes, once the deadlines are met and the product is delivered, the relationship is cut off imminently. Generally, the fact is simply due to a lack of motivation.

The DRIFE Platform Aims to Disrupt the Transport Sector

 

DRIFE, a solution to centralized ride-hailing

Drife.one introduces the DRIFE platform, a decentralized transport ecosystem powered by the blockchain. DRIFE’s objective is to disrupt the existing ride-hailing business model and eliminate the corporate intermediaries involved in the transactions. It’s also a system designed to empower the value creators of the ride-hailing ecosystem. In the emerging market of private transport services, these value creators include drivers and community developers.

Private transportation platforms have created a new paradigm for the industry. Unlike the taxi industry, the type of customers has changed. The current obsolete taxi model has been a hot topic in Spain (still an unresolved conflict) and also in many other areas. The basic needs may not have changed, however, our specific needs do.

Technology has created new emerging markets, new needs and therefore new niches. However, in this comparative framework, traditional taxi systems have hardly changed their way of operating. At the same time, viable alternatives have varied the model in a scarce, insufficient way.

 

Advantages of the DRIFE platform over the current model

Taxi companies regulated by states or transport authorities have evolved very little. This has made things difficult, the scant adaptation of the business model for all parties is clear. This leads to various problems, income gains minimized under pressure, drivers suffering from strict labor policies, and to top it all, this added to slow and expensive bureaucracy. Thus we find several points to review.

Generally, the major value creators in the transport service chain are oftentimes taken for granted which makes the problem linger and complex even more.

DRIFE is focusing its efforts on changing the trend by creating a global standard service capable of restructuring the ride-hailing ecosystem within the transport sector. This is where the advantage of blockchain technology comes in. Once introduced, it is capable of disrupting systems and restoring balance to the economic system.

Competition within the ecosystem may already be fierce as leading industry giants like Uber have far reaching market influence. However, the advantage DRIFE holds lies heavily on its decentralized methodology and governance structure based on the blockchain technology, which is expected to accelerate DRIFE’s objectives once it enters the market.

 

 

The model proposed by the DRIFE platform

In the initial stage, one of the incentives introduced will play an important role. Nowadays, in many real scenarios, drivers see their own colleagues as direct competition. This breaks collaborative community relations, disempowering its members as a final result. Drivers in DRIFE’s ecosystem receive incentives for introducing other drivers to the platform, thereby fostering the growth of the service.

At the same time, it creates synergies for community building among drivers, an essential part for the creation of value and consensus. Since payments for service on the platform is conducted via peer-to-peer (P2P), intermediaries are eliminated alongside their unreasonable commissions.

This is by nature an improvement of the service, including social benefits. Better insurance associated with vehicles is a case of social benefit (for all parties), and is only possible in a scenario in which the driver can afford to pay. Empowering the driver, again, results in better service and better legal coverage for the parties.

As it is well stated in the Drife.one whitepaper, ride-hailing is essentially a cloud-based business. Unlike the traditional taxi industry, the successes of these platforms depend to a large extent on user experiences (UX) and the design of the user interface (UI). Two very complementary elements that play important roles in any ride-hailing platform.

Drivers and passengers are two essential parts without which the business model would not make sense. However, everything works well thanks to the diligent efforts of the developers. This completes the circle. In a consolidated digital revolution, developers are vital for everything that happens “behind the scenes” materialized without influencing the final experience consciously for the user. Everything on the platform should always work seamless as far as the end users are concerned.

 

The importance of developers in the new digital era

The developers, on the DRIFE platform, have the potential to create useful facilities within the application. This tends to improve the riding experiences, and therefore, optimize the ecosystem. Developers can also detect and correct mistakes, unfortunately, on the developer’s side, this is often overlooked.

In a case where the development of displacement / transport applications is outsourced, it is easy for developers to decide not to intrude. Sometimes, once the deadlines are met and the product is delivered, the relationship is cut off imminently. Generally, the fact is simply due to a lack of motivation.

The model of this project offers an incentive model for developers, which in turn amplifies their worth within the value chain. This is one of the core advantages of the DRIFE platform – an inclusive model for all parties based on the long-term vision.

 

The IEO token is now available with four bonus stages

In the case of the IEO token, the acquisition stages for early investors are four. After completing the first phase of the four stipulated (the private sale), the IEO token can be purchased now. Currently it is in its second stage (presale).

 

The base value set without bonuses is $ 0.25. Those interested in participating get a bonus of 20% (price of the IEO token during said bonus, $ 0.20 / token) during the remaining period of phase 2; which ends at the beginning of March, giving way to the next phase (Sale 1) on March 10. During sale 1 (third phase) the bonus period will be reduced by 5%. In this way, sale 1 is subject to a + 15% bonus on the fixed base price. Finally, the last bonus period begins on April 10; during the last period (sale 2) the acquisition of tokens will be rewarded with an extra 10%.

 

If you want to know the aspects of the project in much more detail, we invite you to review the public documents about the DRIFE project. You can find much more extensive information, such as the distribution of the funds collected in the whitepaper. Related market studies and all kinds of details are also available on their website.

 

 

Website & Official links – DRIFE (IEO)

 

Official website – https://www.drife.one/
Connect with DRIFE – https://t.me/Drife_officialchat
Follow DRIFE in Twitter – https://twitter.com/Drife_official
DRIFE official Facebook – https://www.facebook.com/drife.official/
Profile & posts inside – https://medium.com/@drife_official
Whitepaper – https://www.drife.one/wp-content/uploads/2019/02/Drife-Whitepaper-v1.2.pdf

 

Using candlestick formations in order to determine price movement from one direction or another is great for what it does within a more confined timeframe. The problem is, the level of detail that you get from candlestick formations is so granular, that it may be hard to determine the overall trend across the daily highs and lows of a particular cryptocurrency.

This is where moving averages come into play and why they’re one of my all-time favorite trading signals for both ease-of-use and reliability.

Moving averages will really help you break down the momentum of a particular crypto coin. These averages are represented by a simple line which gives an indication as to where a coins price was and is most likely going to be, in an easy-to-see format.

Let’s start off with one of the most basic moving averages…

Simple Moving Average

simple moving averages crypto markets tradingThis moving average, as the name implies, is a simple line that represents the closing price of a cryptocurrency, which is averaged out over a period of time.

In layman’s terms, you simply write down the closing prices for say the last 30 days, add them all up, and then divide that total by 30. This will give you the average of that particular number set.

The most common simple moving averages that you’ll read about are the 50, 100, and 200 day moving averages. Each of these three moving averages will show the momentum during their respective time period (50 days, 100 days, or 200 days).

The only weakness behind simple moving averages is its inherent simplicity, where the data points are assigned the same weight, which affects the outcome of each one equally. This means if you have a price that is severely out of range, compared to the other price points, this can skew the simple moving average line, which in turn can give you inaccurate results.

Let’s look at an example for context…

Say the first four days of price action was at $3, $4, $4, $5, and then a whopping $25. The simple moving average line would then be centered on the average of $8. As you can clearly see, this major movement in price tends to greatly disrupt the averages.

Don’t worry; I cover a strategy further down this guide utilizing the exponential moving averages alongside simple moving averages, that will help facilitate the correction of this issue.

For now, let’s discuss the 3 most common types of simple moving averages.

50 Day Moving Average

simple moving average trading crypto marketA 50 day moving average measures the short-term market confidence. This moving average is consistently used by swing traders, due to its accurate representation of the market during a 24 hour period.

When price action is above the 50 day moving average, this indicates that you’re in a short-term bull market. The opposite rings true for price action below the 50 day moving average. This would clearly indicate that you’re in a short-term bear market.

Also worth noting, when candlestick formations are moving between bullish and bearish sides of the 50 day moving average, this indicates a “ranging period” where the market is undecided where it wants to go. Trading during these ranging periods is much riskier than trading in a substantiated trend (bear or bull trend).

As you can imagine, trading alongside a trend is much more predictable than trading sideways where the market sentiment has yet to be determined.

50 day moving average trading cryptocurrency market
click to enlarge

What’s interesting about the 50 day moving average is that it’s sensitive enough to show large institutional buys or selloffs. These price movements are recorded more accurately on this shorter-term moving average.

100 Day Moving Average

This moving average is considered a medium-term momentum indicator. These are characterized by sharp changes or reversals in the market and tend to include large economic or political movements. You can expect the 100 day moving average to move opposite of the primary trend that follows the 50 day. Much like the 50 day moving average, prices above the 100 day moving average are more long term bullish and prices below this line are bearish.

200 Day Moving Average

As you might expect, the 200 day moving average is a crucial gauge for longer-term trends. This is what you would call the “big picture” or “birdseye view” on how a particular market is doing.

This moving average is not going to tell you where to place a buy or sell order on a day or swing trading basis, however it will let you know whether you need a hold on to a cryptocurrency for a while or if you should start thinking about exiting the market.

I typically use the 50/200 SMAs cross to get an overall feel for where the market is currently and the direction it will be headed when swing trading. I cover more on this strategy below under “The CCJ Moving Average Strategy”.

The Golden Cross

The Golden Cross is defined when the line of a short-term moving average crosses a longer-term line. This cross indicates that a bullish or bearish breakout is imminent. You can look at the cross as a warning of what’s to come (think red alert).

So for example, if you have a 50 day moving average cross over a 200 day moving average, this indicates that bearish sentiment is soon approaching. The same goes for bullish sentiment. If the 50 day moving average crosses under a 200 day moving average, this indicates that bullish sentiment will soon take over.

The reason I use the 200 MA as opposed to the 100 is due to the fact that there is a much larger separation between these 2 moving averages. The 50 and 100 MAs tend to overlap one another. 

It’s important to note that bearish or bullish sentiment is soon approaching once these two lines move closer together. You don’t always have to wait for a cross, but it is preferred for confirmation.

50 and 200 day simple moving averages trading crypto
click to enlarge

Next let’s talk about one of the most utilized moving averages for both day and swing traders alike.

Exponential Moving Averages

 This moving average, also known as EMA, is built upon a “linear weight” moving average. It includes an exponential multiplier which is calculated by a rather complex equation. No need to bore you with all the mathematical details. All you need to know is that it assigns more importance to recent price movements, thus allowing a trader to get a better idea of where price momentum is headed.

EMAs are much faster than simple moving averages (SMA) and will give you a rather quick indication as to when to enter or exit a trade. The advantage to this moving average is that it reacts much faster to price changes.

Swing traders typically use the 5, 10, 20, and 50 day exponential moving averages for their trades. The most popular being the 20 and 50 EMA crossovers which generate quick buy and sell signals. These are the moving averages that I tend to use for my daily trading as well as the 50 and 200 day SMAs.

The CCJ Moving Average Strategy

I’ve used a wide variety of moving averages during my long and arduous cryptocurrency trading career. The ones that I typically tend to rely on the most and have had the most success with are the…

  • 20 and 50 EMA
  • 50 and 200 SMA

I don’t recommend using these on time frames below five minutes. You can use one or both of these moving average pairs, however if I had to choose just one I would use the 50/200 SMA.

The 20/50 EMAs will show you where price movement is headed in the short-term. 50/200 SMA will show you where the price is headed on a mid-term basis, which is great to evaluate where overall sentiment is headed. It’s important to note that you can use the 50/200 SMA on the 15 minute timeframe and above. Anything below that can give you false signals.

Like always, a picture is worth 1000 words, so I’ll give you a few examples and setups of each.

simple moving averages confirmed reversal
SMA 1 hr timeframe click to enlarge
15 minuite moving averages for simple cryptocurrency trading
SMA 15 min timeframe click to enlarge

Let’s Wrap This Up…

Moving averages is one of the more simple strategies you can start utilizing today within your current cryptocurrency trading regimen. Whether you’re day trading, swing trading, or investing, you can use these moving averages to get a clear indication as to where the market is currently at and the sentiment it’s moving towards.

Using these moving averages in combination with indicators, candlestick formations, and charting patterns can provide you with a remarkable trading strategy as well as clear-cut entry and exit signals which will have you winning the majority of your trades.

As always, leave a comment below and let us know if you have any questions.

For more beginner level cryptocurrency trading guides, visit the Crypto Coin Junky trading page located here.

Good luck and happy trading!

The underlying theory behind the Elliott wave principle is based around how price moves, which typically is not in a straight line, but in a series of waves. A great analogy would be one that compares an ocean tide coming in as the water rises, and flowing out as the water recedes into the sand below.

Within any financial market (including cryptocurrency), every action creates an equal and opposite reaction. When price movement moves up, a contrary downward movement must follow.

Price action within any financial marketplace is often divided into trends and corrections (sideways movement). Upward or downward price action will showcase the direction of a trend, while corrections will always move against the trend. These repeating patterns have been shown to occur within all financial marketplaces since the dawn of time.

A man by the name of Ralph Nelson Elliott, first discovered these repeating patterns, known as impulsive and corrective waves. He noticed that these impulsive waves, which always coincide with the main trend, tend to respond in 5 waves.

Even on a smaller scale, each of these impulsive waves can be found and continue to repeat themselves inside the larger Elliott wave patterns. These “waves within waves” are labeled as “wave degrees” within the Elliott Wave Principle.

We’ll cover more about wave degrees below, but first a quick history lesson….

The History Behind the Elliot Wave Principle

Ralph Nelson Elliott developed the Elliot Wave Principle trading strategyRalph Nelson Elliott developed the Elliott Wave Theory back in the late 1920s. Elliott proved that the stock market does not behave in a chaotic manner but more so in a repetitive cycle. He proposed that these market cycles were the result of investor reactions to outside influences and the predominant psychology of the masses.

His studies concluded that the upward and downward waves of these mass psychological signals continued to show up in the same repetitive patterns throughout time. His theory is also based on the Dow Theory that also states that stock prices move in waves.

Elliot also noticed that the market tends to behave in a “fractal” like nature.  Fractals are mathematical structures that tend to repeat themselves infinitely, even on the smallest scale.

Enough of the history lesson. Let’s get to what you really want to know about…

How Exactly Do Elliot Waves Work?

Human social nature can be found within these repetitive patterns due to the predictive manner of human psychology in which the powers of greed, FOMO, and “weak hands” rule.  You can call it another “self-fulfilling prophecy” all you want, however these patterns show up within all financial markets due to these reactive and basic human emotions.

As discussed above, Elliot waves come in 2 different phases: motive (the trend) and corrective phases. The motive phase forms 3 advancing waves of 1, 3, and 5. The counter waves (downward) are comprised of 2 and 4.

During the corrective phase, you’ll typically find 2 receding ways labeled A and C, with a counter wave (upward) labeled B.

This is best illustrated on the chart below…

elliot wave trading pattern for cryptocurrency trades
click to enlarge

The rules behind the motive waves are as follows:

  • Wave 2 never moves below the beginning of wave 1.
  • Wave 3 is never the shortest wave.
  • Wave 2 and 4 can sometimes alternate in form, for example, Wave 2 can show up as a zigzag wave while Wave 4 will be flat.
  • At least one of the waves (1, 3, or 5) will be much longer than the other two. Most of the time, the third wave is the longest of the three, but that is not always the case in crypto.

Rules for the corrective phase are as follows:

  • Wave B terminates at or below the start of Wave A
  • Wave C typically terminates below Wave A.

    In the cryptocurrency market, corrective waves typically claim more than 60% of the all-time high price (top of 5th wave). Some would argue that the norm is 75 to 80% and 100 to 120% retracements can be found if correlated with bad news.

Ok, enough about rules. Just remember that if you get confusing results from your chart, it’s most likely that you’ve miscalculated and dismissed some of the rules mentioned above. Don’t worry though; you’ll most likely miscount these waves the first several times you try.

In order to combat this miscounting issue, here’s a trick I use to help spot these waves.

heikin ashi crypto trading candlestick for tradersGo to the top bar where you can change the candlestick display on TradingView and choose the Heikin Ashi candlestick. This type of candlestick helps you better view red or green candles that correspond with a particular trend.

The Heikin Ashi displays the average pace of prices, which is great at identifying trending periods. This is what Elliott waves are all about. It will greatly reduce the confusion on whether candlestick patterns are showing bearish or bullish patterns. Trust me, these help immensely.

Tip: I use the Heikin Ashi for all my trades and not just recognizing Elliot Waves. It can be used all by itself without any indicators or charting patterns in order to spot various trends. Pairing charting patterns like Elliott waves with the Heikin Ashi will arm you with an extremely accurate and powerful predictive toolset.

heikin ashi candlesticks compared to normal candlesticks cryptocurrency trading patterns

As you can see from the image above, it’s much easier to count waves using the Heikin Ashi candlesticks over standard candlesticks.

Wave Degrees : The Waves Within Waves

Each wave of the 5 Wave Elliott Principle consists of one wave of a larger timeframe. Each wave can consist of much larger market cycles that last decades.

The degrees of each wave pattern have different names as labeled below.

  • Subminuette: minutes
  • Minuette: hours
  • Minute: days
  • Minor: weeks
  • Intermediate: weeks to months
  • Primary: several months to a few years
  • Cycle: one to several years
  • Supercycle: multiple decades (40-70 years)
  • Grand Supercycle: multiple centuries

elliot wave degrees crypto trading

What are the Best Entries and Exits?

The very best entry point would ideally be at the start of the first wave, however these can be hard to spot as they come after a period of consolidation (these can sometimes last days or weeks) or after a sudden dip.

Most traders who trade this pattern start at the bottom of the second or fourth wave. These are much easier to spot. Whatever you do, do not ever buy near the top of the third or fifth wave.

The best exits would be at the end of the third corrective wave, however these can be hard to time as well due to the fact that these final waves can retrace to 100% of the initial 5 Wave Elliott pattern.

For a safer exit position, look for a consolidation that breaks outside of the final corrective wave trend line.

entry and exit points on the Elliot Wave strategy trading crypto
click to enlarge

Bottom Line

never buy on hype elliot waves trading cryptocurrency patternsThe Elliott Wave Principle is another highly useful chart pattern that many veteran traders use to recognize the beginning and end of a trend.

Never buy into the news or hype alone. These systems are used to fool people into buying the tops or bottoms of the market, which is a sure-fire way of getting REKT.

Do your own research before buying and selling into the market. Know what phase the market is currently in (motive or correction) and make an informed buying decision utilizing the Elliot Wave Principle.

For more “beginner friendly” trading tutorials, visit our trading section, located here.

As always, if you have any questions, please comment below.

Good luck and happy trading!

Warning: margin trading is not suitable for beginners. If you’re new to margin trading on Bitmex, make sure to initially read over our guide “The Idiots Guide to Margin Trading on Bitmex” first. The guide covered here is for more advanced Bitmex trading topics.

Bitmex has long been the “go to” platform for margin trading Bitcoin and other various altcoins. If you don’t already have an account, well you probably shouldn’t be reading this guide now should you? 😉 However, if you’re looking to run before you walk, you can proceed to read over this guide (like anyone’s going to stop you), but I recommend you at least sign up for an account before you do.

You can click here and get a 10% discount on your transaction fees for the first 6 months. There’s no cost to you and it really does benefit the both of us.

So let’s start off with a few advanced features that you may not be too familiar with on the Bitmex exchange.

Stop Limit, Stop Market, and Trailing Stop Loss

stop losses on bitmex margin tradingIf you have any trading experience whatsoever, you should already know what a stop loss is so I’ll skip the formal introduction. If you’re not too familiar with stop losses, I highly recommend you check out this guide “Stop Losses VS Mental Stop Losses”.

Moving on…

Let’s take a look at the 3 stop losses that Bitmex provides for you and when you should use each one.

stop limit on bitmex margin trading with leverageStop Limit – when setting a stop limit on long trades, you always want to make sure that your “Stop Price” is lower than your “Limit Price”. Do the exact opposite for your short trades. This ensures that you exit your trade at the proper price point. By how much is up to you, but I do recommend a decent range between your stop price and your limit price. The closer these two numbers are to each other the less likely your order will get filled.

I personally recommend using a stop limit when you’re close to your computer. This way you can at least keep an eye on things, pay lower fees, and exit out of your trade in case your stop limit gets skipped over. If you’re not by your computer and still insist on using this feature, make sure to use a broad range between the limit and stop prices.

One of the key benefits to utilizing a stop loss limit is the fact that you’ll be paying minimal fees on your trades. Sometimes you can even receive a rebate on your funding fees depending on if you’re going long or short during an opposing bullish or bearish market. I’ll cover more about this below under “Fee Calculations and Funding Rates”

stop market bitmex trading marginStop Market – I don’t think it takes a genius to figure this one out. Stop market stop losses are the exact opposite of stop limits. Unlike the stop limit mentioned above, using this feature will ensure that you exit a trade and don’t suffer any more losses then you need to. This is a true “fail safe” stop loss as it will never get skipped or unfilled.

The main take away to utilizing the stop loss is the fact that it guarantees you an exit out of a trade. The downside to using the stop market is that you’ll pay more in fees. You may also exit a trade at a higher or lower price than the actual “stop price” you originally set if the market is moving at an extremely fast pace during this time.
<image>

This can be a great solution for those who have a lot of money on the line and need a guaranteed way out of a bad trade. I’m not one to tell you which one to use, as that’s more of a personal preference (it can be situational one as well).

trailing stop loss bitmexTrailing Stop Loss – a trailing stop loss is an advanced trader’s best friend as it dynamically moves according to the current price movement.

A trailing stop loss will follow the current price action by a designated set price. This is best explained with a few examples.

You’re currently trading BTC at an entry of $7500 and set a “Trail Value” of $100. The market moves up to $7700 and then dips to $7600. You’d be stopped out at this point. You would have also made $100 profit as opposed to losing your funds if the dip kept moving past your entry point.

As you can see, this is a highly effective feature that Bitmex gives you which no other cryptocurrency exchange offers. This will allow you to keep your losses to a minimum. It’s also great for those more riskier traders who like to use higher leverage (above 20X).

The key takeaway to this type of stop loss is that it allows the Bitmex system to constantly babysit your trade by following the price point around like an angry cobra. The moment the price dips, the trailing stop loss quickly snaps it up and exits you out of the trade.

The downside to this is that you may be stopped out before a major rally in price. However this goes for any stop loss you may choose to use. The feature will also stop you out at the market price, so you’ll be paying a bit more on fees.

Now that we’ve covered all the stop loss features, let’s discuss the “Place Order” features you may not be familiar with.

Reduce Only

reduce only bitmex margin trading featureA pretty simple and useful feature, the “Reduce Only” tickbox will allow you to close out your trade without opening up a new position on the opposite side of the market (I call this inverse trading). This is best explained with an example. <image>

Let’s say you start a long position for $1000 at entry price $7500 and set a sell limit to exit out of your trade at $7600 for $1000 (using the sell/short button). However, in your haste, you accidentally input an additional zero, thus opening a short for $9000 ($10,000 sell/short quantity – your long trade of $1000). This type of mistake could have dire consequences on your trading account funds.

When checking the “reduce only” feature, the Bitmex system will not allow you to execute the trade and will immediately cancel out the additional $9000 that would have put you in a short trade. The feature will still execute the trade but only utilize $1000 worth to exit you out of it.

This is an extremely useful feature that can get you out of trouble and should be checked unless you actually plan on opening an immediate “inverse trade” upon your exit (long to short or short to long). I cover more on this within the advanced Bitmex trading strategies below.

Post Only

This feature should be used at all times. When checking this box, only limit orders will be allowed to execute your trades, thus saving you a ton on fees. Look at this feature as a safety precaution from accidentally creating a market order (being a taker, and not a maker).

Using Cross Margin

cross leverage margin trading on bitmexLeaving the leverage margin bar to the far left will allow you to utilize the Cross margin feature. Unlike isolated margin, where you have to manually input the amount of leverage you would like to use for your trade, cross margin uses your entire Bitmex balance as collateral.

This also saves you the time of inputting a leverage amount and calculating a quantity that corresponds to this leverage. These are two key aspects to isolated margin trading that you’ll have to take into consideration. Simply adjusting the leverage slider will not change the amount of contracts that you’re actually trading. It will only raise or lower the limit that you’re allowed to trade with. This is better explained with an example.

Let’s say you have $500 in your Bitmex account, and you want to trade with $5000 worth of BTC contracts. With isolated margin, you would have to move the leverage slider to 10X and then input the quantity to $5000 (this figure would be a little lower due to trading fees).

With cross margin, all you would need to do is input the $5000 into the quantity box and Bitmex will calculate it as 10X leverage off of your $500 account balance.

Most of the time, you want to use cross margin for your trades. Make sure that you never go over 10X leverage (20X is pushing it). For beginners, I highly recommend you keeping it to 2-5X.

However, there are occasions where you want to use isolated margin. Let’s say you like to put in a few day trades but only want to risk $100 of your account balance at 10X leverage for a total of $1000. Seeing that you have $500 in your Bitmex account, you would merely move the slider to 2X. This way if you get liquidated, you only lose $100 off your total account balance.

Personally speaking, I don’t trust myself to only use a set amount within my account balance, so I only fund my Bitmex accounts with an amount I’m willing to lose when using cross margin trading. This is because cross margin won’t get you liquidated as easily as isolated margin, as long as you’re not too crazy with that leverage. This is also the leverage type that most professional traders use for that exact reason.

Tip: I recommend opening 2-3 Bitmex accounts, since all of them are anonymous (no KYC needed) and fairly easy to start up. Fund each account with $500 to $1000. This way, if you’re having a bad day and there’s a massive swing against you (like 8-15% in the opposite direction of your trade), your entire t uprading capital doesn’t get annihilated.

Unrealized and Realized PNL

unrealized profit and loss on bitmexUnrealized PNL is related to the Mark Price. The Mark Price is what determines your risk management of your position on Bitmex. This means that when you get liquidated due to the price going against you, it’s due to the fact that Mark Price has crossed the liquidation price threshold. This will prevent you from getting liquidated from a sudden price swing on Bitmex’s local platform as the Mark Price is comprised of several other exchange values.

Bitmex has a reasonably complex way of calculating the Mark Price which can be found here. It uses a combination of Bitcoin to USD Spot Index (which is 50% Bitstamp and 50% GDAX) as well as the depth of the order book.

Realized PNL is simply what your current profit and loss is according to Bitmex. You’ll receive this figure by hovering your mouse over the Mark Price. This is the real price that showcases your real profit and loss.

unrealised profit and loss on bitmex

Fee Calculations and Funding Rates

contract details of funding rate on bitmexBitmex calculates these much differently than any other cryptocurrency exchange. When looking at the Contract Details box, if the fee is displayed in red, long positions will have to pay the fee. This means that there are more long positions than short at that moment.

On the other side, if the fee is displayed in green then Long positions receive the fee. When you hover your mouse over the “funding rate” you’ll see a predicted rate for the next eight hour period.

This rate is in regards to the funding rate and does not take into account the maker or taker fees for placing the trade. If you exit your trade within this eight hour period, you will not have to pay the funding fee.

Tip: keep an eye out when this fee is about to go into effect. Many traders will exit the market (thus shorting) around 30 minutes or so before the fee hits their account. This would be a great opportunity to buy in and take advantage of a long trade as soon as the fee period ends. When time properly, this can be easy money.

Bitmex Advanced Trading Strategies

1.  Scaling In and Out of Your Positionno matter if you’re going long or short with your trade, scaling in and out of position is highly recommended and utilized by most advanced traders.

In order to get the very best possible position for your entry and exit positions, you need to layer them (aka scaling in and out). Let’s say you’re trading with $1000 and want to take a long position at $7500 on Bitcoin. The current position is at $7800.

Instead of watching the chart all day and trying to time that five minute window in order to get the closest price to that $7500, you would simply set 3-4 entries on the way down.

This would look something like: $250 at $7700, $250 at $7600, $250 at $7500 and $250 at $7400 in case you catch a long wick down.  Now, all the entry points may not get filled as the price may only reach $7600, however you’ll be at an advantageous entry point with capital in the trade.

The opposite goes for your exit positions. Let’s say your ideal exit position is at $8000. You currently have $1000 in the trade at an entry position of $7500. You can scale out of your position by setting exit points at $7700 exiting with $500, $7850 with $300 and then $800 with $200. Again, this will allow you to both enter and exit the market at the most advantageous price points as well as accumulating the most profit along the way.

tradingview scaling into entry point
click to enlarge

Note: this is not only a margin trading strategy, but a typical advanced trading strategy that you can use for any cryptocurrency exchange.

2. Use stop losses when trading top and bottom ranges – this essentially means that if your trading at a top or bottom of a particular price range, you want to ensure that you have a stop loss in place in case your strategy is not fulfilled.

To put this into perspective…

Let’s say you spot an inverse head and shoulders, however it’s located near the top of a 3 day price range. You want to set a stop loss at a key level to where you don’t get stopped out before a major rally, however still within range to exit you out of the trade if the market turns against you.

Using the stop loss will allow you to take advantage of the charting patterns while still giving you a safety net in case the strategy doesn’t end up going the way you had planned.

The same goes for entering a trade with a short when you’re at the bottom of a 3 to 7 day average. Make sure you place a stop loss above your short, but at a price level that you know won’t get prematurely stopped out before a major dip ensues.

This is best illustrated with a chart…

stop losses on bitmex trading range margin trading
click to enlarge

3. When to Use Market & Limit Orders – for an overwhelming majority of your trades, you’re going to want to use limit orders with the “post only” feature checked. However, there are occasions where you’re going to want to use market orders.

For example, utilizing “stock market” stop losses are highly recommended when using one of the strategies above, but especially when you’re not close to your computer or watching the market.

For everything else, stick to limit orders and keep those fees to a minimum.

4. Using Inverse Trades – the beauty behind margin trading on Bitmex is that you can immediately cash out of a long with an immediate inverse short trade.

For example: let’s say the current 3 day price range for Bitcoin is between $6200 and $6800. You’re currently exiting a long trade with $1000 at $6800 from an entry of $6600. Instead of exiting the trade with a short of $1000, you can input $2000 into the quantity box and immediately start a short trade upon exiting your long.

I only recommend doing this when you’re at the bottom or top of a 3 to 5 day price range. The chances of your trade reaching a peak and reversing is much more likely than creating a new ATH (all-time high). This is best outlined with an illustration below.

trading long and short trades on bitmex
click to enlarge

5. Playing Both Long and Short Trades Simultaneously – A strategy that some of the more advanced traders use on certain occasions is to set both a short and long limit. This can be used in times where you’re unsure which direction the market is about to break out to. It’s also good to use for trading patterns like a symmetrical triangle.

In these cases, you’ll need to have 2 Bitmex accounts available. On one account, you’ll set up a long entry point above the potential breakout. On the other account, you’ll set up a short entry point below the potential breakout. This way you’re setting yourself up to take advantage of the breakout in either direction.


Another similar scenario you could use this strategy is…

If the price movement reaches a high from a 3 day moving period (like the $6800 price point covered in the example above). You can place an inverse trade to short at this peak as well as set a limit order to go long on the trade in case of a major breakout. Again, you’re covered on both sides of the spectrum.

bitmex margin trading with leverage account limits on buy and short

Great Job! We’re Done Here…

I hope you enjoyed my advanced Bitmex trading guide. Using just a few of the strategies I covered above will allow you to create an incredible income for yourself in a much shorter time frame than it would typically take trading on any other cryptocurrency exchange. This is due to the fact that you’ll not only be able to multiply your trading capital with leverage, but also have access to both long and short trades as well.

Remember, initially trade with small amounts until you get acclimated to the platform. Print this guide out and keep it close by for when you need it.

Save 10% on BitMEX fees with this coupon link. BitMEX fees are MUCH higher than your typical crypto exchange because the fee applies to the entire leveraged position, not just your margin (initial deposited amount).

As always, if you have any additional strategies you would like to share or questions concerning other aspects Bitmex trading, please feel free to leave a comment below. I’m typically quick to reply.

Good luck and happy trading!

If you’d like to read more about Bitmex trading strategies, check out our other guides…

The Idiots Guide to Margin Trading on Bitmex

Bitmex Liquidations: How to Avoid Getting REKT

Leave a Comment

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