Bitcoin Forum

Generally considered a lot more complex type of trading. Do you think new and budding traders should get into or at least be introduced to derivative trading or should it be avoided, and just HODL at all costs?

The advice you're going to get from majority is to simply just hold, and do something else to make money instead. I'm personally in this camp too,  as I'd rather build up a skill instead and potentially make money off it(web design, blogging, etc).

On the other hand, it's your money. Do what you want with it. As long as you completely understand that you're going to risk your money by trading derivatives, and potentially lose them all; especially as a new trader which is definitely not recommended. If you really wanted to go the trading route, probably practice first using platforms that has a virtual portfolio feature.

What favors Mr A might or mightn't favor Mr B. While we're all encourage to be holders you can still gain that experience you hunger for and probably it might begin the new chapter of your investing career. You shouldn't go all in though, always have a reserve to fallback on and that's where the holding comes into play.

I believe in Buidling, we should always be willing to build on our investment, increasing the holders over time and not just relying on the current holding we have. If you have the required knowledge needed to succeed in the derivative market then you should engage yourself as there are profits to be made there.

If you are doubtful of what you are doing, there is nothing it makes sense to do it otherwise, you will lose. Why not try to know the result? Because if you are asking that derivative trading will make you profitable, it will depend on how you work on it or how they work together. If you are comfortable working with each other, it gonna be a positive asset that it will work on but if not, then working by yourself may help or just hold only.

I know a lot of traders have their plan and doing that but not all of them get succeed it is because they never know exactly what they are doing as a team/ or as individual participation.

too fast it's not always good,if u talking about new trader which i mean newbie ,of course derivative trading should be avoided at the beginning,it's a high risk category,did u know survey about how long crypto trader still active at trading ? , just a few percent, and mostly quit less than 2 years.

Oh wow, didnt know that. So you suggest that the volatility that we see in crypto market is caused by those few percent of people? Probably mostly whales.

Why not if the person understands perfectly what it is about otherwise he could be hit hard. As you say it's a type of trading more advanced, jumping on it as a newbie isn't going to end well in most cases. It's easy to make a mistake like over-leveraging, not using a stop-loss order.

If I remember correctly, not long ago there is an exchange that decided to stop it because people complained about it but the truth is that they don't understand correctly and were loosing money

I don't think it's a good idea at all—unless we are talking about some of the simpler derivatives instruments, like some crypto CFDs on eToro.

You don't run before you can walk, especially when running will cause the money to fall out of your pockets. If we're talking about trading options, swaps, futures etc, then that's just a recipe to lose money.

We've all heard the horror stories about people trade on 100x leverage and then get wiped out overnight because bet on the wrong side of the market.

I think all cryptocurrency traders should progress along the following route (unless they are already experienced in trading traditional markets).

1. Demo trading spot
2. Spot trading
3. Margin trading
4. Demo futures trading
5. Futures trading without leverage
6. Futures trading with low leverage
7. Options/swaps trading
8. Derivatives trading with high leverage.

A newbie trading would have hard time buying bitcoin using fiat and then keep trading bitcoin and usdt between each other for profit, unless you are an expert trader in something else and joined bitcoin world from trading that to now trading crypto, you are not going to know much about trading and will lose money, it took me years before I can totally understand what is going on in the bitcoin trading world.

That means if the newbie starts out with derivatives for the first thing they are doing, they are not just going to lose their money which could happen in any method anyway, but they are going to lose it very quickly, and I mean VERY quickly, what could take a few months of losing until you are out in regular method, could be under half an hour with derivative markets.

Hodl should help a novice trader understand how the cryptocurrency business works. And the first decision of such a trader should be when to exit hodl to usdt in order to keep the profit. When he learns to enter and exit a trade on his own, you can try trading during the day.

Understanding the key elements of how derivative trading works is more of advanced knowledge.

It's not wrong though to introduce it to newbies but at least make it step by step so that they will understand truly each and every level they will encounter.

Surely, soon they will sick of doing "HODLING" so they will step on another level of their trading activity. For now, let them HODL as long as they want as once they want something new on how they are managing their coins, they will automatically study the other options.

Oh, come on.

I saw @OP walking around on Altcoin/Trading Section, he will post or creating a topic about at least some topic who have a connection about his signature "Sparrow Exchange". Now, if you see "Sparrow Exchange" they have "Derivative Trading" soon op will trying to shill the exchange XD.

When a traders looks for more advancement into the business, they are the one who's going to find ways. This kind of approach is learnable as long as the person who wanted to take the risk have the willingness to take this another steps.

It's more on the side of particular person, even newbies have the same desire to push for more innovative ways of earnings, once they've

seen this options and they see that there's opportunities for them, it's not a question that they will proceed and start moving forwardly.

Depends on the newbie risk, if he/she doesn't have any risk aversion then derivatives might be good for them in the beginning. So it's really up to the individuals, as each one of us are really different. Others wanted to go all in and try their chances for a good actual gains. Nothing wrong with HODL though, it is the most effective strategy even for advance traders, but if you are looking for new adventure and pursue more profit then maybe, derivatives is for you.

If it is a more complex type of trading then this might not be good for beginner trader. And how can they make more money out of it if they don't know how it is on the first place. so everything should be taken in baby steps here, you can't just jump and expect that you are going to get a good returns out of it.

And with market like crypto, which is very volatile, maybe those beginners might be overwhelm and instead of staying here, they might get REKT early, lose more money. For me it's not a good recommendation. Should be taken slowly, then as the person goes along and gain experience, then probably he can register for a demo account and see how it goes.

Only trade on derivatives when you have enough experience and trading ability. I have been involved and I can say that it is not for new people, especially those who do not have the ability to manage capital and mentality have not been trained.

Hold then practice a bit so you'll be familiar with what you're trying to do. It's not advisable for someone who's inexperienced in such a thing to do it quickly.
There is no one that's stopping you but it's best if you will take time to study and practice it before getting in. Expect losses as you try to do it on your own if, you start.

For me yes, but not for profit but for experience, It's okay for the new trader to experience a lot of platform and trading concept for him to decide on what, and which one should he start from, I know a lot of you will be suggesting manual trading but every individual has it's choice and preferred trading method, so going dipper into those kind of concepts will make him more experienced trader and will get a lot of information in his early stage off trading. And we all know that when it comes to trading the experience/knowledge really matter to be a successful one.  :)

you thought it wrong,buddy. I mean, of course that by whales and their bot trading,in this case,if a new comer suddenly jump to derivative market,they even quit within a month,in any case, derivatives are for pros.

New comer mind is how to be rich soon by trading without take care some thing bad happen when price is down or they have lost all assets, but when receiving reward or profit they will all in their assets to trade without take half with bad risk when start trading. Maybe is the way how to keep out by new comer when trading in bitcoin or altcoin.

Derivative trading should be duly avoided by beginner traders at all cost. It doesn't help to skip the line and head straight to playing with margins. It usually comes back to hurt, even though not now, in the long run. I have a friend who didn't learn basic trading concepts like candlesticks, chart patterns, risk management etc and he went ahead to start trading derivatives with high leverages between 30x to 100x. The results? series of medium to large losses.

Ideally, one has to crawl first before walking. Skipping will only leave you with knowledge gaps and when you realize it, you might be deep in losses.

As a newbie you should avoid derivative trading, do what is proven to be low risk. Like hold your coins until you can make a profit.
Because trading is complex, it's not easy to learn, it takes a strong intention to become a successful trader. Do a lot practice trading
on trusted platforms and use small capital to reduce risk. After really understanding about trading and accustomed to doing risk
management well, after that get into derivative trading is not a becomes problem.

If you're asking whether a genuine newcomer to trading ought to dive into derivatives, I would have to say NO....and I would scream that from the hilltops. 

New traders ought to start small and get a feel for how the market works before putting larger amounts of money into trading and certainly before branching out into things like futures and options and even short selling. 

As far as cryptocurrencies are concerned, I don't think there are many small-time derivative traders on exchanges like Bakkt.  The "little guy" usually does his trading on those crypto exchanges we all know, and they buy and sell actual coins and not derivatives.  To each his own, though.  If there's someone with enough confidence and at least some knowledge of how derivatives work, I say go for it.  That description doesn't fit the usual newbie trader, however.

Derivatives and margin trading are two different things, just so you know.  Margin is the use of leverage, and you can trade derivatives with or without it.

Trading could be at high-risk and newbie should have to understand it but it doesn't mean that it is very hard to learn trading. A lot of traders make it pretty easy but the problem is they hardly make it to the right position. Mastery is what we need in trading and it is very difficult to acquire for newbie. If this is only for their experience, not really a bad idea but if they think this for a profitable gain, I'd never have to agree with this decision. Much better to make it alone and develop your skills and strategy in preparation.

Since we are talking about the new traders here, it is not actually advisable for them to try immediately the derivative trading. Although it is a good way to have a massive profits if one use this kind of trading because we use modern and complex way of trading but it was also complicated for newbies.

Give them time to fully  learn and understand how derivative trading works. For the meantime, they can just hold and consider it as low risk than encouraging them with new aspects of trading that may lead to their losses.

It's a "new" trader so no, not really. Though that's just in case of people having fear of losing money, in which case for me, I fear that said trader would lose all his money for just "trying it out" but really, if someone had the financial capability to support himself outside of trading while trying out different things at the expense of believing that they're going to lose everything they've traded for that "try" then I'm all for it. hodl brings profit in the long run yes, and we can see a lot of positivity with regards to hodling BTC, but it isn't really 100% guarantee, plus it takes a long time. If someone had the capabilities like what I said earlier, they could try it basically, even with just a few dollars start-up and slowly increase while learning the know-hows, they should be able to earn profits after a few months.

That way they certainly know the risks they will face, because if beginners know this there will be a very high risk of loss, without having a strong basic knowledge they have. so it's good if you want to learn to be a novice trader accompanied by friends or experts who already really understand the market and buy and sell well, so of course it's very easy to understand how to do it and where to start.

I will not advise beginners to trade if they think that they can easily profit as they trade. We have to address to them that trading isn't easy as what they probably are thinking or what they thought how it's being done.
But if the beginner is adventurous and wants to learn a lot from his own experience, no one can stop him because it's part of learning to incur losses as they trade.

They can try to trading, but don't force themselves to chase the profit because that will be too difficult for them. The new people don't have much knowledge to follow the price, which can make them lose money. Perhaps, they can buy and sell the coin, especially if the price can move right to the market, so they can try to sell when the price increases. But still, they need to learn more about trading itself, and don't try with the other type of trading if they don't have the right skills. Trading is not easy, especially if you don't have the knowledge, and don't forget that not all coins can give you a chance to make a profit.

I am beginner in trading but i dont think i should avoid derivative/ future trading, i am trying to understand and have some experience with future trading so i start derivative trading with 10 $ or less.

Hi,

Please have a look at the guide I wrote recently

https://medium.com/@sambrans/mastering-trading-with-leverage-a-lucid-guide-b918696384f0 (https://medium.com/@sambrans/mastering-trading-with-leverage-a-lucid-guide-b918696384f0)

There is nothing wrong with introducing this type of trading to people who are still newbies, but if you’re going to be telling them about it you should as well be letting them know the level of risks that are involved in it, because I don’t understand why some people will teach newbies things like this and forget to let them know the risks.

When they are not told about associated risks they will feel it’s easy by judging with those that are making profit. In my experience, all new traders must start from just watching markets and how pro traders are managing "all the things" of trading.

There is nothing wrong with them knowing about it, and if they are interested in it they can then take their time to learn about it and get good at it.

The best strategy is hold, you just have a small to lose all your money as long as you choose a good coin like bitcoin.

Derivative trading is indeed a good place to gain profit but you have to aware that you need a high risk as well when doing so.

Thus, I don't reccomend for those newbie out there who directly choose derivative trading to earn money. They should know first the ins and out of the way before trying to start.

Sooner or later they would surely come to the point on testing out waters into this field because as you do learn along the way then the scope of knowledge and awareness
on things related to trading will really be broaden up which means all of connected or types of trading will really poke out your curiosity and as a trader you can differentiate
nor do tell between kind of methods and even on profitability.In result you will surely test it out and find out if your experience and knowledge will really be enough
to cope up on the level of risk.Mistakes are common but you shouldnt force it out if you do see that you are losing that much.