8 June, 2022 seen 47Welcome to the #2 bitcoin futures trading report, covering my trades in the month of May 2022 on the Deribit platform.…
A few weeks ago I wrote an article on how to make at least $1/ day by day trading crypto.
Now, I decided to scale it up a bit, and see how to make $5 per day, relatively safe from trading bitcoin, and how much actual capital is required.
This is not trading advice. Investments in stocks, funds, bonds, or cryptos are risk investments and you could lose some or all of your money. Do your due diligence before investing in any kind of asset.
Disclosure: This article contains affiliate links to the deribit.com bitcoin futures trading website, by clicking on links on this page and by investing with deribit, I will earn affiliate income at no cost to you. Also, I'm not a financial advisor and I don't give you any advice, I'm just sharing my own experience. Investments in stocks, funds, bonds, or cryptos are risk investments and you could lose some or all of your money. Do your due diligence before investing in any kind of asset.
First things first - for trading Bitcoin I actually choose trading bitcoin futures on the Deribit platform, there are many other platforms to trade, but I cannot talk about them as I'm not familiar with them.
When trading futures on the Deribit, a 50x margin is offered, which is both great and risky at a time. It's great because we can multiply our gains much faster, and it is risky as we can lose our funds even faster.
Before showing any progress I actually lost about $250 trading Bitcoin futures on Deribit, and I feel happy I lost just them, not $25,000 or $250,000 to learn my lesson.
Risk management is the core - not overtrading and not overleveraging. In total, I blew my account 4 times before returning on growing my account.
I would say $200 is enough capital to trade $5 per day. That's about a 2.5% daily gain. Let me give you an example:
I've been day trading Bitcoin futures since April 10, 2022. So far in total 61 days, from them on 7 days I have made more than $5 per day.
$200 capital would give you about $10,000 in burying power (leverage) - it would be recommended to use all your buying power, but rather just a small part of it for every trade. I've heard that forex traders advise not risking more than 1% of your capital per trade. I believe this holds true as your account grows. Making money is just the first part of the game, keeping it might be harder.
For trading bitcoin futures I tend to risk 10% from my total capital per trade (as long as I do not plan to open 10 trades, but just one)
10% from $200 is $20. add 50-time leverage and we control $1,000 worth of Bitcoin.
It's up to you and your trading setup - to go short or long, but with $1,000 at risk I would look at trade setups with 50-point movement. They happen quite often. Each closed 50-point movement would give you a $1.69 profit. You need at least 3 such trades per day to book a $5 profit.
When trading with leverage you risk forced liquidation in case the market goes against you. As Bitcoin is very volatile, sharp drops or increases are not rare, and having a safety margin is a must-have.
Like you could trade with $3,000 where one trade with 50 points moves per day would be enough to book 5 dollars. But then it would be advised to have 3x times more trading capital (about $600)
Remember you are trading with leverage, it was not advisable to risk more than 10% of your total capital per trade. As your account will grow the more you will want to protect your capital and take less risk.
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