If you are a cryptocurrency trader, what is the one thing that you would hate? Well, it is to lose money. You stepped into the markets to ensure that you are earning as much as possible. Is it easy to earn money in these crypto markets? If you are a trader that is worth your salt, your answer would certainly be no.
But the truth is that there are a variety of ways to earn money in the crypto markets. Everything does not have to be positive. Indeed, everything does not have to go in a positive direction for you to succeed and increase your overall wealth.
See, most people think that the only way to earn money in crypto is by investing in the digital asset market and going long. Remember that, in this context, going long is all about investing for the long term and looking for Bitcoin or Ethereum to increase in value.
If bitcoin rises from $50,000 to $80,000 and stays there, and you’ve been invested, you are going long and have made a profit. But you can also earn money and increase your principal by shorting the market.
This is where the market is quite interesting. This is where you can have an edge on the markets and can earn money while assets like Bitcoin, Ethereum, or even Dogecoin are tanking.
Of course, you may be aware of shorting the market and opportunities and dangers that are present within this domain. But you may not be aware of the fact that you can short the market through futures in an automated fashion. Yes, you can utilize bots to improve your ability to bet against the market and profit significantly in quantity.
But you must know about the fundamentals of shorting the market, the futures market, and one of the primary automation providers in the digital currency domain.
Here is what you need to know about shorting the market in the safest way. Find out how you can take advantage of the GRID trading strategy and the DCA strategy via futures to bet against the market and profit even when Bitcoin is falling.
📉 Short Positions in Futures Trading
The first question on many people’s minds is how they are going to execute their short positions. Once they understand what short positions are, as noted above, they want to take on the best way of doing so in the marketplace.
So what is the best way to do so in the digital asset sector? Experts would note that you can obtain exposure through short positions in futures trading. But what is that?
In essence, a short futures position can provide you with significant profit potential but will open you up to a large portion of the risk. But as they say, you must take on a percentage of risk to obtain the right amount of reward.
Remember that opening up a short futures position will let you take advantage of the decline in the market price of Bitcoin or another asset. The futures trade will bet on the underlying commodity or asset. Remember that futures contracts are just that, contracts.
For example, Pesci is an age-old trader. He sees that the market has significant momentum right now but knows that it will dip in the near future. He may go to Binance, or other providers of crypto futures contracts and will enter into a short trade.
If Bitcoin goes down by a couple of ticks or points, then he will see an increase in his principal. If he enters into a short position and Bitcoin keeps going up, depending on the nature of the contract, the leverage, and other aspects, he may see a significant loss.
Pesci would note that he would need to have a certain amount of funds in his current account so that he will be in line with the initial margin demands imposed by the exchange. Yes, Pesci would need to have the right portion of funds for each of the futures contracts that he wishes to open.
Another Example
Let us say that Dogecoin futures are trading at .90 and each futures contract covers 100 Dogecoin. A trader, Cipriano, opens up an SFP or short futures position by selling 1 contract of Dogecoin futures at .90.
One Potential Situation
The first potential situation is where the Dogecoin futures falls to .60 on the delivery date. Then the contract has gained .30. Cipriano will gain a profit of the total number of units (100).
The Second Potential Situation
But what if the Dogecoin futures go all the way up? If it goes all the way up on the delivery date, the short futures contract will incur financial losses. The losses will be the amount of the rise in price times the number of units.
❤️ Why People Love Short Futures Contracts
The reason why traders, Pesci in our example above, would like to enter into these contracts is because of the value that is present in them. If they are right on their trade, they can earn quite a bit.
These traders appreciate the fact that they can have quite a bit of upside if the trade is made in the right direction. The right direction in a short futures contract is when the underlying digital asset or physical asset is declining in price.
How are you profitable when you are making these trades?
Well, remember that profit in these trades will be noted through the value of the contract increasing as the price of the underlying commodity goes down. If the market price of the futures is less than the overall current sale price of these futures contracts, then you are profitable. The return on the trade is the cost of the futures, the selling price of the contract, and how large the contract is.
At the same time, remember that risk is also present with these contracts.
The Risks
Did you know that with significant profit potential comes significant risk? One can incur massive losses when it comes to short futures trades if the underlying commodity trends to increase in value.
The higher the price increases and the faster it goes up, the more financial loss and pain. Remember that commissions are also in the picture so you must pay attention to this situation overall.
Professional traders will ensure to think about the breakeven points and make calculated decisions with their futures contracts.
Always ensure that the margin requirement is met and is good to go. Many places will have a maintenance level to keep the exchange in a state of stability. But did you know that you can automate your futures trading?
This is where it becomes even more interesting for you and other traders.
🤖 Automate Your Short Futures Trading with Bots
You can automate your short futures trading with bots from various providers.
Futures trading bots will let you pick the parameters and it will execute the trade on your behalf at the respective exchanges. How it would work is that you would conduct your rigorous research, look at the various indicators and points of interest, and then use the bot to conduct the execution.
If you see bearish trends, then you would utilize the short stratagem and gain significant value as the assets go down in value.
The bot implements various orders. These orders can limit short sells or GRID type orders. These orders would act in slightly different ways. Traders would implement different types of orders depending on the current needs.
Margin Modes
The user of these bots would also think about the margin modes. These modes will tend to be cross and isolated.
Cross Mode
Remember that cross margin is about applying your risk appetite to all of your futures positions. Cross margin is about utilizing your margin balance for all current positions. It means that it can wipe out your margin balance and affect all positions.
Isolated Mode
You will only place a certain amount of margin on each trade. You can manage each trade in a more controlled and differentiated manner.
The Pros and Cons
The pros of using these bots are quite simple. You can streamline your trading operations and have the help of more tools. At the same time, if you do not know what you are doing, it can affect your funds quite significantly. Remember that these bots still depend on your knowledge and financial strength. These bots take the strategy from you and rely on your brain to be heading in the right direction.
Let’s take a look at the Bitgsgap futures trading bot to see what it offers. See, Bitsgap is one of the more prominent companies on the market and can provide significant value to those who know how to use it.
📢 The Overview of Bitsgap Futures Trading Bot
The Bitsgap futures bot is rather comprehensive and holistic. You will find that you have the ability to conduct several strategies, long, short, and then conduct activities like backtesting. Then you can take advantage of features like the funding rate, margin mode, and more.
As you now know, the reason why you would want to work with a trading bot like Bitsgap Futures automatons is that you want to streamline your trading.
The Bitsgap Binance Futures program will cater to traders that want to obtain value from trading environments that tend to rise and fall. These traders can gain value in more ways than one.
One primary component in the futures market, that the bot will rely on, is that of the utilization of debt. The right use of leverage can create massive value or create problems in the wrong hands.
But the Bitsgap bot is there to automate the process of futures speculation, providing you with more simplicity in your speculation life.
The Value of the Bitsgap Automation
Here is how it works.
It is a tool that will create and close quite a bit of positions. The bot will accumulate a slice of profit from each trade. It is hard for a human to enter into and exit out of quite a bit of positions like the computer program can.
There are two critical strategies that the Bitsgap machine lets you move forward with and these are present below.
The Bitsgap Futures automaton enables you to simplify futures speculation with the GRID and DCA plans combination. The key aspect of this automation tool is that it helps you to long, short, and use specific margin modes, in addition to learning through the demo option.
🦾 Compelling Aspects of the Automated Strategy
Go Long on the Rising Market
If you think the market will head up over the next few days or months, then you will want to go long and merely invest. When you utilize the automated program, the different set of coded rules will execute, and it will divest current assets and optimize returns with the GRID plan. But if the market moves nowhere or the prices decline, the DCA option will kick in and it will obtain a profit by purchasing during variances.
Go Short when Market is Falling
If you want to go short and earn when the crypto market is falling, you can do that too! The automated program will purchase the assets as they decline. When the slight pumps occur within the market, it will quickly execute the DCA action and sell short to obtain returns.
Like to Backtest?
If you are interested in seeing how your current plans and trade executions would have worked in the past, then you can use the backtest option. This option will enable you to look at how certain actions would perform with data from the past.
🏁 Starting up Your Bitsgap Futures Bot Trading
First, create your account with Bitsgap. Do so by going to their website and signing up. Enter the correct information and then move on. Finalize and verify your email. Then log in to your account.
Connect to Binance Futures
You would need to connect the automation to Binance or other entities that it may work with at the moment. You would use API keys and secret keys to connect and set up the process.
It is essential to actualize your Binance Futures account to trade futures. It is essential to You need to enable read, spot, and futures trading, unrestricted internet protocol address, and to ensure that you save it.
The reason why you would work with Binance is because it has a significant amount of volume on a worldwide basis. It also offers its own tools and options that would make your life more smooth when it comes to futures and general digital asset trading.
Tools like Bitsgap that connect to Binance show credibility because they want to keep their clients happy with the right connections. This large entity will offer USD-M and Coin-M futures contracts.
You can take advantage of different types of delivery depending on which contract you get into. You can get USDT delivery or Coin-M delivery.
Make Your Selections
It is here where you will choose your pairs and create your automaton.
- Go to the bots section and ensure to go to the Binance futures section from the exchanges tab.
- Then optimize the options to your liking with regard to features.
- Then note whether you want to bet on the market or against it (short).
💰 What Profit Can Be Generated?
I am trading with the Bitsgap combo bot since it was released to the public. You can check my settings and the real results generated here.
👉 The Final Points and Conclusion
The crypto market will fall and rise and repeat this cycle over again. It is a roller coaster. It is much more so in volatile cryptocurrency markets. But with these futures contracts, you can think about risk and plan for it.
The idea is to minimize your anxiety in the event of a falling market. You can have various opportunities in a falling market too! Now, you are aware of a way to profit from down markets and know specific tools as well.