Leverage
For those beleiveing in the SUI coin If you believe in SUI coin I have a more degen play that could potentially give a better reward if SUI coin pumps.
We have a cup & handle forming on the weekly timeframe. I expect a little retracement before hugging the all-time time (disregarding the pump & dump at lunch) with a reacting to this zone and then breaking to the upside during the bull run.
If the bull is bigger than the previous one this could be a good gainer
ApexExchange (APEX) - no pull back - moon coming sooner or laterI like Apex - fast execution and nice UI - best DeFi leverage exchange?
Now we see Apex volume rise to the sky - and the price will follow?
* With 50 x ETH leverage coming this week and at the same time the ETH-ETF narrative is hot
* bullish Apex chart
* Increased volume and green light for Bitcoin ETF
* Crypto market is about to explode
Formula:
hot narrative + under valued + new money enter the market = moon?
I don't see that Apex will have a big pull back now. Apex have been seriously undervalued and still are. I think it will have at least one more big wave before we see a big pull back. Please use stop loss and do your own research!
I think a close above 1.51 (4h timeframe) or so would be a good entry for a next potential wave/trade. You could use quite tight stop loss!
BTC First Leveraged Bitcoin Futures ETF Launched Today !The introduction of the first leveraged Bitcoin futures ETF, the Volatility Shares Trust - 2x Bitcoin Strategy ETF (BITX), marks an intriguing development in the cryptocurrency market!
The idea of institutions employing this ETF as a strategic move to capitalize on their bearish view of Bitcoin is plausible. This ETF presents a new opportunity for institutions to potentially profit from shorting Bitcoin legally with 2X leverage.
By utilizing leverage, institutions can enhance their potential returns if Bitcoin's price were to decline. However, it is important to acknowledge that investing with leverage also carries higher risks, as losses can be amplified.
The notion of Bitcoin going higher before a potential downward move, highlights a possible trapping mechanism for bullish investors. If Bitcoin experiences a temporary price increase, it could entice optimistic investors to buy or hold their positions, only to face unexpected reversals in the future.
Looking forward to read your opinion about it!
🅱️ 10X Lev. BTC (XBTUSD) Long Trade Signal (730% Potential)This is part 2. I am sharing the full numbers with you.
Part 1 was the 333% 10X Long from 23-Nov-2022 (See here) .
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LONG XBTUSD
Leverage: 10X
Buy-in: $21,000 - $22,222
Targets:
1) $25,150
2) $28,500
3) $31,000
4) $34,800
5) $35,000
6) $37,500
Stop-loss: Close daily below $20,500
Liq. price: $20,174
Potential profits: 730%
Capital allocation: 3%
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✔️ Leveraged trading is for patience, smart, responsible and experienced adults/persons.
✔️ There is always risks involved when trading and a break down can lead to the liquidation of a full position.
✔️ Experience is needed to adapt to market conditions as things change.
✔️ The position might need adjustment such as adding more collateral, reducing leverage, securing profits, securing the trade, closing the trade before expected, etc.
✔️ This information is shared to your advantage but should not be construed as financial advice. All the information shared by the author is intended for learning and entertainment purposes only. You are responsible for your own actions.
This position we originally shared 14-February and hit the first target. After a target is hit, a retrace/correction is normal and expected.
✔️ Retraces and corrections can be used as opportunity to buy-in, rebuy and reload.
I am wishing you tons of success.
I am sending you good vibes, now & always.
I am wishing you health, wealth, happiness and joy.
May God, the Universe, Divinity, Source, Life, Nature bless you with the accomplishments of all of your hearts dreams and your souls desires.
Let's hope for another big success in this trade.
Thank you for reading.
Thanks a lot for your amazing and continued support.
Namaste.
What Leveraged Bitcoin Is Doing In This MoveA derivative indicator I have used for many years to analyze Bitcoin is the BITFINEX:BTCUSDLONGS symbol on Tradingview which displays the number of Bitcoins held in Leveraged Long positions on the Bitfinex platform. This is an indicator of the aggregate long positions held on margin on the platform. It can be used to see what speculative position holders are doing.
Recently, during this run up in the price of INDEX:BTCUSD it seems that the Leveraged positions have begun to unwind by taking profit. They are down -23.5% as of today from the start of November 2023.
Analyzing this chart is different to On-Chain Analysis because the Bitcoin involved are all stored internally at Bitfinex. No new Bitcoin are created (because they cannot be) by taking these positions. Rather the Bitcoin that are custodied on Bitfinex and put up for the ability for other traders to borrow and the owners to earn interest are involved in the count.
A few takeaways:
After months of holding leveraged long positions these traders are taking their profits into this move.
By having less exposure on margin the risk of a liquidation event (and liquidation candle) is diminished.
Leveraged Long positions are net negative meaning that leveraged positions are not the cause of this upward move.
TheKing VS Shorts- A basic way to understand how BTC legs up are working.
- BTC Shorts go up.
- BTC price just retrace a bit or just slide. ( kind of divergence )
- it means Shorts are growing but running on a slice of butter.
Then :
- SHORTS Rekt.
- BTC makes his next leg up.
- it looks simple but actions and big legs up or down are acting pretty fast and most of the time at the last minute.
- that said, it's always good to monitor the level of shorts.
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Momentums :
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1- Shorters start to scare to be liquidated and add to their positions facing BTC Longs pressure, fast exit ( panic ) .
2- Shorters start to fomo when BTC price rekt and add more to their shorts ( greed ).
- it's really difficult to master "Shorts against BTC price" if you don't first Master " Divergences ", " Hidden Divergences " on regular charting and multiple timeframes.
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- Keep in mind that when i post just a simple chart idea.
- Behind that i check everything and more.
- Being right or wrong is not the point.
- knowledge and practice is the final goal.
Happy Tr4Ding !
Trading &/or GamblingThe difference between trading and gambling.
This article will shine a light on the most frequent mistakes that traders make. These mistakes blur the thin line between trading and gambling.
Many people have spoken on this topic, but we truly believe that it is still not sufficient, and traders should be better educated on how to avoid gambling behaviour and emotional outbursts. When we speak about trading versus gambling, we define gambling as the act of making irrational, emotional and quick decisions.
Most of the time, these decisions are based on greed, and sometimes fear of the trader. Let’s dive into the exact problems we have personally experienced thousands of times, and want to help others avoid.
1 ♠ Bad Money Management
This is something that everyone has heard at least once, but seems to naively ignore in the hopes that it is not that important .
It is the most important . When a trader enters trades, it is exceptionally alluring to enter with all of their money, or close to all of it. In gambling terms, that is going “All in”, or “All or nothing”.
As a rule of thumb, both traders and gamblers should only place or bet money that they can afford to lose.
Thankfully, at least in trading one can limit their loss for that specific trade, by placing a stop loss or exiting before total liquidation. In Poker, you can’t fold when you are “All in” and take a portion of your money back. However, that does not mean entering trades with full capital, even with a stop-loss, is going to give you exponential returns and feed your greed for profits.
Traders should enter positions with a small amount of their full capital, to limit the damage from losses. Yes, you also limit the possibility that you win a few trades in a row with all of your money and… There goes the greed we mentioned.
The “globally perfect” percent of equity you need to enter trades to reach that balance between being too cautious and too greedy does not exist. There are methods, like the Kelly Criterion, as described in our previous Idea (see related ideas below), that help you optimize your money management.
Always ask yourself, “How much can I afford to lose?”. Aim for a balanced approach. This way you can position yourself within the market for a long and a good time, not just for a few lucky wins. Greedy money management, or lack thereof, ends in liquidations and heartbreak.
2 ♣ The Use of Leverage
Anyone who has tried using leverage, knows how easy it is to lose your position (or full) capital in seconds. Using leverage is mainly sold to retail traders as a tool for them to loan money from the exchange or broker and bet with it. It is extremely profitable for institutions, since it multiplies the fees you pay them ten to one hundred-fold.
In our opinion, leverage isn’t something that should be entirely avoided. However, it should be limited as much as possible.
We cannot deny that using 1-5x leverage can be beneficial for people with small accounts and a thirst for growth, however as the leverage grows, the more of a gambler you become.
We often see people share profits made using 20+ times leverage. Some even use ridiculous leverages within the range of 50-125x.
If you are doing that, do you truly trust your entry so much that you believe the market won’t move 1% against your decision and liquidate you immediately?
At this point, the gambling aspect should be evident, and it goes without saying that you should not touch this “125x Golden Apple”, like Eve in the Garden of Eden. Especially when you see a snake-exchange promote it.
If you use a low amount of leverage, and grow your account to the point where you don’t need it for your personal goals in terms of monetary profit. You should consider stopping the use of it, and at least know you’ll be able to sleep at night.
3 ♥ Always Being In A Position
Always being either long or short leads to addiction and becomes gambling. While we don’t have scientific proof of that, we can give you our own experience as an example. To be a profitable trader, you do not need to always be in a position, or chase every single move on the market.
You need to develop the ability just to sit back and watch, analyse and make conscious decisions. Let the bad opportunities trick someone else, while you patiently wait for all your pre-defined conditions to give you a real signal.
When you think of trading, remember that the market has a trend the minority (around 20-30%) of the time. If you are always in a position, this means that 70-80% of the time you are hoping that something will happen in your favour. That, by definition, is gambling.
Another aspect, that we have experienced a lot, is that while you remain in a position, especially if you have used leverage, you are constantly paying your exchange fees. You can be in a short position for a week and pay daily fees which only damage your equity, and therefore margin ratio. So why not just sit back, be patient and define some concrete rules for entering and exiting?
Avoid risky situations, and let the market bring the profits whenever it decides to.
4 ♦ Chasing Huge Profits
Hold your horses, Warren Buffett. Through blood, sweat and tears, we can promise you that you cannot seriously expect to make 100% every month, no matter what magical backtesting or statistics you are calculating your future fortune on.
Moreover, you will realise that consistently making 2-5% a month is an excellent career for a trader.
Yes, the markets can be good friends for a while, you may stumble into a bull-run and start making double-digit profits from a trade from time to time. Double-digit losses will also follow if you lose your sight in a cloud of euphoria and greed.
Many times, you can follow the “profit is profit” principle, and exit at a small win if the risk of loss is increasing.
5 ♠ Being Sentimental Towards Given Assets
You may have a fondness for Bitcoin and Tesla, and we understand that because we too have our favourites. Perhaps you’re deeply attached to the vision, community and purpose of certain projects. On the flip side, there may be projects that you completely despise and hope their prices plummet to zero.
What you personally like and dislike, should not interfere with your work as a trader. Introducing such strong emotions into your trading will lead you into a loop of irrational decisions. You may find yourself asking, “Why isn’t this price going parabolic with how good the project is?”.
This sounds, from personal experience, quite similar to sitting at a Roulette table and asking: “Why does it keep landing on red when I’ve been constantly betting black? It has to change any moment now”.
First and foremost, you may be completely wrong, but most importantly – it could go parabolic, but trying to predict the exact time or expecting it to happen immediately and placing your “bet” on that is again, gambling.
Don’t get attached to projects when trading. If you are an investor who just wants to hold their shares in an awesome company, or cryptocurrency, that is perfectly fine, hold them as much as you want.
The key is to make an important distinction between trading and investing, and to base your strategy on the hand that the market provides you with.
6 ♣ Putting Your Eggs In One Basket
We all have heard of diversification, but how you approach it is crucial. A trader should always have their capital spread between at least a few assets. Furthermore, the trading strategy for each asset must be distinct, or in other words – they should not rely on the same entry and exit conditions for different assets.
The markets behave differently for each asset, and you cannot be profitable with some magical indicator or strategy with a “one-size-fits-all” style. Divide your trades into different pairs and asset classes, and study each market individually to properly diversify. Manage the equity you put into each trade carefully!
Conclusion
The takeaway we want you as a reader to have from this article is that trading without consciously controlling your emotions inevitably leads to great loss and most importantly, a lot of stress.
We hate stress. Trading and life in general is exponentially harder when you are under stress. Control your risk, sleep easy, and let the market bring you profits.
Reaching this level of Zen will not be easy, but it is inevitable. Be happy when you make a profit, no matter how small or big. A lot of small profits and proper money management complete the vision you have of a successful business. Ultimately, trading is just that – work, not gambling or a pastime activity. Treat it as work and always remember to never rely on luck.
The advice we’ve included here is written by a few experienced gamblers… Oops, I meant traders 😉.
We hope that some of the lessons we’ve had to painstakingly learn through trial and error can now be shared with those who are interested. Of course, none of this constitutes investment advice. It’s merely a friendly heads-up.
Reduce risk in portfolios without hampering returns Asset allocation is ultimately about balancing returns with risks. While it is relatively easy to reduce risk in a portfolio, it is harder to do so without diminishing its return potential. Diversification, that is, adding uncorrelated assets to the portfolio, is one of the main tools available to investors to lower such risk, but it often comes at the cost of returns. The 60/40 portfolio, a mix between 60% equities and 40% fixed income, is the bedrock of asset allocation for many investors.
Adding fixed income to equities does lower volatility and improve the Sharpe ratio, in line with Markowitz’s findings in this Nobel Prize-winning work and due to the historically negative correlation between equities and investment-grade fixed income. However, it is also true that a 60/40 portfolio has tended to deliver lower returns than a 100% equity portfolio.
Does it mean that investors have to choose between higher returns with increased volatility or lower returns with decreased volatility?
Cliff Asness’ thought experiment: the levered 60/40
As with any problem, the solutions usually require out-of-the-box thinking. In our case, it requires to start thinking about leverage. Cliff Asness, co-founder of AQR Capital, provided such a solution in December 1996 when serving as Goldman Sachs Asset Management’s director of quantitative research with his paper ‘Why Not 100% Equities: A Diversified Portfolio Provides More Expected Return per Unit of Risk’.
In his paper, Asness argues that investors can achieve competitive returns while managing risk more effectively by diversifying their portfolios with a combination of equities and bonds and using leverage. Asness designs the ‘Levered 60/40’ portfolio which leverages a 60/40 portfolio so that the volatility of the leveraged portfolio is equal to those of equities. The applied leverage is, therefore 155%. The borrowing rate used for leveraging his 60/40 portfolio is proxied by the one-month t-bill rate.
In his original paper, Asness finds that, over the period 1926 to 1993, the Levered 60/40 portfolio returns 11.1% on average per year with 20% volatility. Equities, in contrast, return only 10.3% with the same volatility. For reference, the 60/40 portfolio (unleveraged) returns 8.9% with 12.9% volatility.
We extended the Asness analysis to the most recent period. We observe that over this longer period, the results still hold true. The Levered 60/40 delivers higher returns than equities with similar volatility. The Sharpe ratio of the Levered 60/40 benefits from the diversification and is improved, compared to equities, with no cost to returns themselves.
Leveraging the 60/40 around the world, a successful extension
In Figure 2, we extend the analyses to other regions to test the robustness of such results. While the history is not as deep, Figure 2 shows similar results. Across all the tested regions, the returns and Sharpe ratio of the Levered 60/40 portfolio exceeds those of the equities alone. At the same time, the volatility is identical, and the max drawdown is reduced.
Note that we do not use a 155% leverage in all those analyses; we use the relevant leverage to match the volatility of the equities in the region. Having said that, the leverage remains very similar across regions as it oscillates between 160% for global equities and 170% for Japanese equities.
The theory behind the Levered 60/40
From a theoretical point of view, the idea of focusing on the most efficient portfolio possible and leveraging it to create the most suited investment for a given investor is well anchored in financial theory. When he introduced the Modern Portfolio Theory (MPT) in 1952, Harry Markowitz had already outlined the concept through the Capital Allocation Line (Markowitz, March 1952).
The efficient frontier for a mix of 2 assets: US equities and US high investment-grade bonds. Note that each portfolio on the efficient frontier is the most efficient for a given level of volatility, assuming no leverage. All portfolios on the efficient frontier are not equal and have, in fact, different Sharpe ratios. Along this efficient frontier, there is a portfolio with the highest Sharpe ratio of all, called the ‘Tangential Portfolio’. This most efficient of all the efficient portfolios happens to be found where the Capital Allocation Line touches the efficient frontier. The Capital Allocation Line is the line that is tangential to the efficient frontier and crosses the Y axis (the 0% volatility axis) at a return level equal to the risk-free rate.
When it comes to building the most efficient portfolio for a given level of volatility, investors have two choices. Without leverage, they can pick the portfolio with the highest return for that volatility level on the efficient frontier. If investors look for strategies with a volatility level equal to equities, equities are the most efficient portfolio. Considering potential leverage, the answer is quite different. With leverage, an investor can pick the portfolio with the relevant volatility level (in this case, the equity volatility) on the Capital Allocation Line. Portfolios on this line happen to have a Sharpe ratio equal to the Sharpe ratio of the Tangential portfolio (that is, the best Sharpe ratio of all the portfolio combinations without leverage) but with any level of volatility that may be required. We called the Leveraged Tangency Portfolio the portfolio on the Capital Allocation Line with the same volatility as the equity portfolio. This portfolio is a ‘more efficient portfolio’. The return is improved by almost 2% for the same volatility, leading the Sharpe ratio to jump from 0.27 to 0.45.
Key Takeaways
“Diversification is the only free lunch in Finance”, whether a real or fake H. Markowitz’s quote, epitomises the philosophy that underpins the 60/40 portfolio. It is also one of the main lessons from Markowitz's Nobel prize-winning work. Having said that, the second lesson has not been heeded as well: leveraging a good portfolio can make an even better portfolio. Overall, by leveraging a traditional 60/40 portfolio, an idea that, at WisdomTree, we call ‘Efficient Core’, investors could potentially receive a similar level of volatility present in a portfolio 100% allocated to equities but with the better Sharpe ratio of a 60/40 portfolio.
Possible examples of where such Efficient Core portfolios may be used widely in multi-asset portfolios include:
An equity replacement
A core equity solution designed to replace existing core equity exposures. By offering return enhancement, improved risk management and diversification potential compared to a 100% equity portfolio, Efficient Core can also be used to complement existing equity exposures.
A capital efficiency tool
By delivering equity and bond exposure in a capital-efficient manner, Efficient Core can help free up space in the portfolio for alternatives and diversifiers. In line with the illustrations above, allocating 10% of a portfolio to this idea, investors would aim to get 9% exposure to US equities and 6% exposure to US Treasuries. This could allow investors to divest 6% from existing fixed income exposures and consider alternative assets (such as broad commodities, gold, carbon or other assets). In this scenario it could potentially be achieved without losing the diversifying benefits of their fixed income exposure.
This material is prepared by WisdomTree and its affiliates and is not intended to be relied upon as a forecast, research or investment advice, and is not a recommendation, offer or solicitation to buy or sell any securities or to adopt any investment strategy. The opinions expressed are as of the date of production and may change as subsequent conditions vary. The information and opinions contained in this material are derived from proprietary and non-proprietary sources. As such, no warranty of accuracy or reliability is given and no responsibility arising in any other way for errors and omissions (including responsibility to any person by reason of negligence) is accepted by WisdomTree, nor any affiliate, nor any of their officers, employees or agents. Reliance upon information in this material is at the sole discretion of the reader. Past performance is not a reliable indicator of future performance.
Do not trade zone! Specially scalpers!I believe these two ranges and the area between them will catch, trap and make so much liquidation in next hours, as the weekly is closing.
Weekly wanted to close above monthly open. which seems buyers were successful. Make sure to be neutral between these two lines.
BITCOIN BULLISH short term!!!Bitcoin has broken through a massive downtrend and is now retesting the diagonal or dynamic resistance. If bitcoin manages to hold these levels, I would exspect prices to move higher at tap the 28k level.
This is a great area to enter a long while managing your risk for a 2% max loss on trade if your stop-loss hits.
You can also see that on the 6hr TF is is well oversold which is more bullish than bearish in the medium term.
Calculate Your Risk/Reward so you don't lose more than 1% of your account per trade.
Every day the charts provide new information. You have to adjust or get REKT.
Love it or hate it, hit that thumbs up and share your thoughts below!
This is not financial advice. This is for educational purposes only.
UNFI/USDT Futures Short on 3hUNFI/USD Futures 3-hour: An actionable setup here. Shorting into strength with signs of losing steam. Particularly like the double top scenario.