Trading Bitcoin Futures, Calendar Spread, Basis Trading + a Cryptocurrency Websi

Trading Bitcoin Futures, Calendar Spread, Basis Trading + a Cryptocurrency Websi

hey everybody its Jonathan hope you're doing well today I'm gonna do a video on Bitcoin it's actually my first video on Bitcoin and so far in the last three or four months I've received over 20 emails asking about Bitcoin asked them to teach about Bitcoin you can't trade this stuff without really understanding what's going on so rather than jump in and trade and I know some people out there making a bunch of money I also know some people out there have got caught in some moves take it slow this is a marathon it's not a sprint so in front of you I have Bitcoin right /x bTW and then it's going to be f8 that's January 2018 this is the front month contract for Bitcoin what I did here is I put all the bitcoins up right now bitcoins traded in three different months we have January we have February here and then we have March okay so it's gonna be F G and H notice the price difference sixteen thousand eight twenty sixteen thousand nine seventy seventeen thousand two hundred and thirty what's that telling us this is the stuff that we need to understand when we're going to trade a new futures contract what this is telling us is the market is speculating surprise surprise for Bitcoin to go higher how much higher well about five hundred points right now within two months and all I did was I took the difference between March and the January contract now for me I never just want to buy something or sell something I always want to be doing it against something else I want you to realize that if you buy Bitcoin right here who knows what could happen can I trade 12,000 can I trade 8,000 can I trade 25,000 it can okay new markets low volatility lots of retail activity so it's very difficult to tie down your risk if you're only trading one futures contract something interesting to watch is if I just i'm thinkorswim go – /x bt and let's go out to March right there we have the calendar spread right here we have the difference between January Bitcoin and March Bitcoin and I have it on a 5-minute chart if I open it up a little bit it's volatile right it's gone from 0 to 740 and it looks like it wants to trade between 350 around 350 maybe a good trade is instead of speculating on the direction of Bitcoin what about looking at the calendar and if you can buy it for $700 difference that's something that you're comfortable doing where should this calendar trade I don't know right now this seems to make sense to me it seems to find comfort in this 350 hour difference but once in a while because this thing is so darn volatile you're going to get 700 maybe if you buy the front month to January and it starts working in your favor but maybe March gets really really expensive or follows through faster than January you can sell march and put yourself into a spread that's how I'm looking to trade Bitcoin I'm still learning I'm gonna focus my December on learning as much as I can so I can share information in January a website that I came across that I think that there's a ton of value is going to be crypto compare so crypto compare it's all live so you can get your prices Bitcoin here go under Bitcoin now this is really interesting and why bitcoin is so much different than anything else that's really traded I got you on Bitcoin if we look at the different markets it's so fragmented right now now sure there's a futures market the futures market should trade at a premium to all these other cash markets the reason it should trade at a premium is because over time there's going to be better liquidity it's the same reason that fund gbtc which is a Bitcoin fund is trading at a premium to the price of Bitcoin because there is liquidity and there's access so again crypto compare under Bitcoin now what you need to do is keep this up and watch the behavior because there's some pretty significant spreads between all these different Bitcoin exchanges this is a crazy print twenty thousand traded twenty four minutes ago then you'd have to look in the size of the trades not really big not that big of a deal but if you start seeing all these other exchanges start to get buyers they're all real time that's when you want to look at the futures market use this as the underlying cash component it's like if you trade gold futures against the underlying of gold the difference is going to be the basis that's what we're doing here we're creating a basis by looking at the cash of all the different exchanges okay now you might be thinking well is it possible to buy on some of these exchanges and sell on some other exchanges no it's not they are creating futures so we have the ability to buy and sell these instruments but overall just use this as a guide okay you obviously don't want to be long if every single one of these starts to go down I'm learning as I go I wanted to make this play around look at things differently don't just speculate on the direction of Bitcoin don't just try to use technical analysis try to take it further try to look at things different then other traders are looking at more to come on Bitcoin I'm gonna be studying this throughout the holidays and come back in January with a ton more information for you thanks Jonathan active day trader

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About the Author: Maximilian Kuhn

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