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Trading in bitcoin
22 Jan 2022 (329 views)  

Bitcoin reached a high of $67,580 on 8 Nov 2021 and declined to $35,560 on 22 Jan 2022. It was a drop of 48% over a period of 2.5 months.

If a trader hold 1 Futures contract of 5 bitcoin, the drop of $32,020 will result in a loss of $160,000 USD. If a trader holds a short contract during this period, the investor would have gained $160,000.

During this period, the price did not have a steady decline. Instead, the price moves in a volatile, zig zag manner. 

The actual gain or loss for the trader would depend on the periods that he holds the long or short position. During this period, the trader is likely to have made several trades and realized them for a gain or loss. 

During the past two days from 20 to 22 January, bitcoin dropped 18% from a high of $43,312 to its current price of $35,560. The drop of $7,752 in the price would result in a gain or loss of $$38,760 in one short or long contract of 5 bitcoin. 

The contract for trading bitcoin in the Futures market is for 5 bitcoin, which has a value of $200,000 when the price was $40,000. It is possible to trade a fraction of a bitcoin by using a contract for difference (CFD).

I made a large loss by holding a short contract in bitcoin during the past few months when the price was moving up. During the past few days, I made a large gain on bitcoin when the price dropped sharply.

Most of the time, I prefer to hold a short position in bitcoin because I consider I consider its value to be highly speculative and is likely to drop sharply. There are some occasions when I hold a long contract, but I will be careful to clear it off when the price drops sharply.

In this video, I explain how I trade in Futures contact, including bitcoin.

Note - I am sharing my trading experience in bitcoin. I am not giving investment advice. 

Tan Kin Lian


 


Trading in bitcoin
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Bitcoin reached a high of $67,580 on 8 Nov 2021 and declined to $35,560 on 22 Jan 2022. It was a drop of 48% over a period of 2.5 months.

If a trader hold 1 Futures contract of 5 bitcoin, the drop of $32,020 will result in a loss of $160,000 USD. If a trader holds a short contract during this period, the investor would have gained $160,000.

During this period, the price did not have a steady decline. Instead, the price moves in a volatile, zig zag manner. 

The actual gain or loss for the trader would depend on the periods that he holds the long or short position. During this period, the trader is likely to have made several trades and realized them for a gain or loss. 

During the past two days from 20 to 22 January, bitcoin dropped 18% from a high of $43,312 to its current price of $35,560. The drop of $7,752 in the price would result in a gain or loss of $$38,760 in one short or long contract of 5 bitcoin. 

The contract for trading bitcoin in the Futures market is for 5 bitcoin, which has a value of $200,000 when the price was $40,000. It is possible to trade a fraction of a bitcoin by using a contract for difference (CFD).

I made a large loss by holding a short contract in bitcoin during the past few months when the price was moving up. During the past few days, I made a large gain on bitcoin when the price dropped sharply.

Most of the time, I prefer to hold a short position in bitcoin because I consider I consider its value to be highly speculative and is likely to drop sharply. There are some occasions when I hold a long contract, but I will be careful to clear it off when the price drops sharply.

In this video, I explain how I trade in Futures contact, including bitcoin.

Note - I am sharing my trading experience in bitcoin. I am not giving investment advice. 

Tan Kin Lian