Crypto Anyone thinking/planning to short bitcoin?

Some people who have been in for a long time are taking this chance to cash out, I watched it go from 19kUSD to 16kUSD in a matter of minutes last night.

Would I short it? No. Can a lot of money be made if you can understand the completely irrational actions of the buyers? Maybe.

Personally, I would stay out of the margins and not play with leverage in Crypto, it is a quick way to lose a lot it all unless you're disciplined like Alex.

 

@Foxdan bit more to it that that simple view....this is the public piling in right now, public FOMO does not inspire confidence in me I'm afraid

Please read my posts from the many other crypto/BTC threads if you want to know all my reasons. Would rather do what my chart says and ignore sentiment. I have already shorted from 17000 and exited at 14500 captured 14.7% on half that position in under 4 hours and the remaining half has stop los at break even. I call this strong holding position for the long term particularly if this early rejection of 17000 continues and they don't challenge the high again for a few months In reality there will probably be a few wild swings before the serious move down so high may yet be taken out again.

Posted this idea ahead of my trade as is my policy here to tell you what I am doing openly before I do it and more often than not quote expected entry levels and timing well before the trade ever happens.

Not many markets can provide that kind of gain so quickly that's why focussed on trading this right now. Usually my weapon of choice is Gold Futures but this is too good to ignore with all the interest right now.

 

Always said he's a sensible lad that Josh!!

 

@Alex Straker u completely misunderstood my post but thanks for implying I’m a simpleton.
If retail investors are piling in - this will drive the price up while they do it and delay any significant drop that would be worth shorting. I didn’t mean that it would give u the confidence to invest.

 

Have more fun at star city betting on black....

 

I've got a horse for you!

 

Shorting a bubble doesn't seem like a disciplined approach to trading by anyone.

 

I've been experimenting with buying things with Bitcoins recently.

It has been a pain in the backside.

You have to physically go to your wallet and send the funds within a timeframe. The shops exchange rate is almost always higher and you have to pay a fee to your exchange as well. Then finally once you've sent the coin it can take 1 -2 hours for the shop to email you a confirmation. As a mere mortal, you have no idea that they've recieved/not recieved the money. You can find this out by going through the entire blockchain, but it's not exactly user-friendly.

It all feels a bit like Linux was 15 years ago.

I can understand why steam no longer accepts it.

Then there's inflation...what you bought for $100 last week might have actually cost you $150 due to the Bitcoin gains. But at least you avoid some cgt I guess.

This is all early days, Bitcoin is open source so someone could come up with a bright idea to fix all this but who knows?

As it stands now...As a currency its not great.

Anyway thought I'd share some learnings...

 

I guess it was only a matter of time.

Millions 'stolen' in bitcoin heist

 

How about delaying this post until it’s reached $100,000 which will be within the next 12 months

 

@Foxdan did not mean to imply that at all my friend my apologies if you took it that way, you and I have talked before and I hope you know I do respect you posts, just giving you an answer to your question. My intention is to openly share info and help, apologies again. It's tough being the lone wolf sometimes

Interesting how 2 people can look at the same chess board and see entirely different possibilities for the game plan

No advice, DYOR

Guest I understand why you say that, managing risk is always number one priority.

Obviously this stuff is highly speculative and well outside the main game of steady wealth accumulation in traditional assets. To be clear this is not something I would advocate for a client for example - FAR FROM IT!! Plenty of other ways to build an excellent strategic edge using traditional assets and cash flow structuring as basis for success Clearly 'purist' TA based aggressive trading of a wildly volatile speccy is not for most folks as I have said many times in my posts. Mastering TA to a level where it's useful is a 10,000 + hour exercise for starters, requires years of mentorship (IMO) and even then it's tough. To me these kind of 'aggressive' plays are very personal to individuals.

Although 'shorting' may be a foreign concept to many here, this is all normal for me Shorted dot.coms in that bubble too and Gold when it was 1900/oz, regularly short commodities and currencies and am short something almost every day, right now it's Gold and BTC and very soon I will be buying put options in SMSF to protect my portfolio assets in international equities as an insurance policy if that market turns down. Both my open short positions in Gold and BTC have a trailing stop loss that has been moved to lock in some of the profit they are sitting in if the market turns. I have also taken part profit out of these positions so essentially they are now a 'free look down'. My aim is always to get a trade to this kind of position quickly then I set my algos to monitor and move the trailing stop losses to progressively lock in profit and I can happily forget all about them until they hit my profit target or get stopped out at the trailing stop.

Don't really like talking about specifics of dollars made, but to give you an idea how I have managed risk on this exercise.....

Bitcoin has only ever been play money for me when I first got involved with 15k in 2013. Now up 6 figures from Bitcoin sale proceeds at various stages along the way before this shorting exercise starts. Profit is in the clear and re-invested now in other traditional assets plus a small basket of infant crypto speccys where long side potential looks better (long term - years) and I put 5k aside to go short as my convictions on Bitcoin have firmly changed at this point (short term - 3/6 months).

The limit of loss I have accepted (I always accept a potential loss mentally before I execute) on this short is 5k. Trading up to 100 times leveraged so my position size is much greater than 5k in the market, but loss can only be max of 5k due to stop loss). My first 2 attempts at a short got stopped out and that 5k became 2k. What I am about to say will sound strange but if you want to understand what I mean read 'Trading in The Zone' by Mark Douglas: I was extremely happy with how both of those trades went. I executed perfectly to my plan, got filled at good prices, my psychology did not waver and the market let me know my price level of entry was wrong on those ones and I got stopped out and was happy to accept the loss. I remain strong in my conviction that the facts (as I understand and interpret them, you can only trade what you see) are telling me to take the short side bias both from a sentiment POV plus even more importantly (to me) the chart evidence. The TA chart level I entered short at in my third attempt ($17,000 in USD) has proven itself valid so far. Because I know price has reached the limit of my useful chart info (outer red arcs - these are the main resistance level of the entire chart) this will be my last attempt based on that info and if it fails I will need to re-asses.

So the bottom line is risk has all been removed now in any case even the 2k remaining because on my third attempt the short position worked beautifully from 17,000 and has already paid me VERY well in a matter of hours (more than original 5k risk capital) and I now have money in the bank, a stop loss set to breakeven on remaining position plus a free look at the downside should the short side become favourable.

What you see as irresponsible, I see as a managed risk with major upside potential that will provide extra capital for when it's time to go long again or potentially raise some more seed capital for other traditional markets (always move your cleared profit from speculation down the scale of risk!).

BTW when the CME futures exchange opens Bitcoin futures on 18 Dec I will be changing my strategy to creating synthetic puts by legging in to short side futures against at-the-money call options. This strategy is a risk managed way to trade commodities with a bearish bias when the market has strong momentum on bull side currently. Much less stressful strategy for SMSF, I don't want to have to log in every day Can be close to zero risk when arbitrage is favourable between contracts. I know you guys struggle to see 'why the short side when this thing is cranking?' It's tough mentally let me assure you but I have to follow the convictions that the chart give me supported by other fundamental evidence or I am denying 20 years of my own research/charting and not making any use of it.

Another long post, jeez that's not like me

 

Alex -Thanks for your time to post that..

Quote..
Interesting how 2 people can look at the same chess board and see entirely different possibilities for the game plan

No advice, DYOR..

If you know the game rules in Chess,who get,s slaughtered first ?..

 

Interesting post @Alex Straker, I agree with some of your key points i.e.

However, 100x leveraged Bitcoin when the chart is parabolic I see as nothing more than a gamble. I read the above as "I've made x on Bitcoin, so it doesn't matter if I lose Y", fair enough if that's the case & good luck.

With $5k to lose and 100x leverage (effectively $1.5M exposure to Bitcoin) it would only take a $50 move against you to wipe out (if I am understanding correctly, which I may not be)?

I don't speculate based on charts alone (though do use at times for entries/exit), but of those I read about who are successful over the long term (using T/A only or primarily), they not only use risk management strategies like stops, but look for setups which are repeatable and where emotions can be kept in check. I don't think trying to guess the top of a parabolic bubble (every 5 to 10 years) using some arc chart is going to achieve a repeatable strategy... but maybe there is a 1 in a million trader who can correctly measure the tops of bubble and short accurately, more power to them.

 

Guest Thanks for sharing your thoughts. You are right about the 100x leverage beig too much, if you read it again I said I can use up to that much, that doesn't mean I do. In fact that would be suicidal as I would then be sailing waaayyyyyyyyyyyyyy to close to a margin call.

Having said that there is nothing wrong with trading large positions sizes as long as you know your system and manage risk correctly. Depending on the exact money management algo I am using for the strategy in play (examples of these include fixed risk, fixed capital, fixed ratio, etc), I limit leverage to max 20 times and that is plenty to show a nice profit and allows for a reasonable stop loss placement. It's a bit more complicated than that because I need to 'position size' each entry according to the stop placement needed and that is what tells me how much leverage to use to limit loss to my set amount. I full understand how you see this as a gamble because you simply don't have the convictions about my chart work that I have from my experience with Gann/Elliott Wave/market geometry over many, many years. To you those arcs are just a red circle, to me they are a very high probability area of resistance and provide a low risk proposition for a potential short, not just in this market but any market I use this method on. Even though Bitcoin is clearly an oddity and highly volatile these principles of growth I use in my TA are universal.

Did you see the price rejection on the chart? That arc was drawn well in advance of price getting anywhere near it and the inner arc has already proven highly accurate as price has now rejected that area almost to perfection and dropped a few thousand bucks in a matter of hours. I would call that a successful short and if typical expectations play out it's only just begun

This reminds me of when I first met my trading mentor and could not fathom for the life of me how someone could presume to repeatedly call exact market turns. I realise it is foreign to many of you, that is one reasons I am here to gently pry open new possibilities for people who have not experienced this kind of rapid compounding before.

Then he would prove it to me trading futures with dozens of correct trade calls in a row and I came to realise this is a real skill set that can be learned.

My views remain the same.

17,000 - 17,500 is resistance and an ideal short entry (for me!) and if the top holds in that zone (could be a few swings in the area yet that take out the current high then reject again) and ESPECIALLY if it holds until end of December my confidence grows that this market will be bearish until Feb, maybe longer until June. Idea fails if we see a weekly close above 18000.

Plenty of people are jumping in making all kinds of predictions of higher prices.... 30k, 100k, 1M, this all feels nice if you own some but I have not seen too much reasoning behind it.



Posting this stuff here goes against all my better judgment, it takes guts and I know it seems counter intuitive to make this kind of call in a wild market. I share these in the hope they help people manage their own risk successfully and of course I know the majority would never consider shorting. Plenty of other options - cash in longs and wait for example. Or take a very small portion of profit and place a put option as insurance against your Crypto dropping.

Said a hell of a lot more than I had first intended about this idea, apologies for so many long winded posts I am trying to cut down on my words I promise

Lets just see how it plays out for a few weeks, if nothing else it is one of the most fascinating and crazy market stories I have been part of and if it really is just in the beginning stages we are all going to be billionaires in a few years!!

No advice DYOR

 

Here's how you short Bitcoin...

Find a way to go short (through an exchange or whatever)...

Start a rumour that makes worldwide headlines that Bitcoin has been hacked.

 

This is like saying the dollar has been hacked. The dollar does not get hacked, but banks can.
It is the same with bitcoin: Bitcoin does not get hacked. Exchanges and service providers do.
Also it is worth pointing out some of those supposed "hacks" are more inside jobs aka scams/dodgy operator in the first place.

 

Sure. But the masses don't necessarily understand that. Like any currency, if you remove peoples confidence in it, it will crash.

 

What most people don't understand is your private key is what stand between you and your ownership of bitcoin, when you trade bitcoin you got to temporary give your private keys to the exchange or the middleman, hackers can hack these exchange and steal people private keys
and there IS no WAY for you to get it back, once they have your private key stolen they then transfer all that coin out to their wallet and there is no way for you to get it back PERIOD

High-risk scenario and plenty have their coin stolen, whether dodgy exchange or hacker it posses massive risk for holder but that the nature of speculation and mania, all logic and risk and security get throw out in the name of making the fast buck

as of this week soon you can short bitcoin via future contract on CBOE, you can be sure the hedge fund will short it to death this is their cue to make money and street mug lose

XBT-Planned Cboe Bitcoin Futures

 

That was a wild weekend. I hope @Alex Straker made the most of it! Outstandingly brave Play if you did!

 

Having fun so far!!

Good chance they will stop me out of my last 1/3rd of short at breakeven. Will be cautiously looking for more rejection of 17,000 - 17,500 if that happens. Wild ride coming one way or another IMO. I will be fascinated to study the early COT reports from futures trading. Most of the large speculators who will be joining in on the futures trading launching on some markets this week and other (more important ones) next week have not even got out of bed yet.

General info and my opinion only....

Most commercials will probably steer clear of this for a while. That leaves 2 major groups - large specs and small specs to play in the futures market. Let's see what large specs who have some of the sharpest minds and best trading skills in existence see about the value. They are also extremely cruel to small players where there is money involved. The small specs will just continue to buy in to the hype and the large specs will most likely be happy to let them IMO.