Derivative trading? Should an aspiring trader have it up his sleave? (Pro/Cons)

[ladyfox]

So, I have been vanilla trading for a while(Basically HODL). I wanted to learn more about trading types and specialize into them and stumbled upon Derivative market (Options, Futures, forwards, Swaps, CFDs). Wanted to discuss about the pros and cons of learning them. At the moment I'm mainly interested in Options and Futures. What do you guys think? Worth learning? or no? Advantages? Disadvantages?

[mk4]

In summary: You earn money faster, but at the same time you lost money faster; especially when using leverage. It's completely up to you if you're willing to do such high risk trades or not.

Oh and lastly, a huge majority of traders actually lose money.

[milewilda]

If you can risk for almost-gambling like trading then go for options and futures but if not then stick to traditional scalping or swing/trend trades.
I dont usually trust up options brokers when im still engage with forex market and i do highly agree on whats been said above.There were traders who do
make profits but majority is on the losing side and thats how market works.Just stick into the type of trading which does suit out your interest or according
to your level of knowledge and capability.

[rexxarofmoknathal]

In summary: You earn money faster, but at the same time you lost money faster; especially when using leverage. It's completely up to you if you're willing to do such high risk trades or not.

Oh and lastly, a huge majority of traders actually lose money.

The above just says it all! You can learn them all and apply them yourself. Only in this manner you will be able to know for yourself which ones you like or dislike.

People on here can suggest different types of trading that suits them but it won't necessarily mean it will suit you also.

The pros of learning them is that you'll increase your knowledge and be better equipped to be making trading decisions the downside is that you may lose money during the learning process.

[ryzaadit]

The pros of learning them is that you'll increase your knowledge and be better equipped to be making trading decisions the downside is that you may lose money during the learning process.

We don't need to lose money went learning option trade, there has some demo trade on every broker. You can easily learn with demo account, if you don't really trust on the demo you should compare it with the real chart did the chart was getting manipulation or not. As long i know the demo account its the same chart with a real account chart.

[logfiles]

What do you guys think? Worth learning? or no? Advantages? Disadvantages?

It's worth learning so that you don't have to put all your eggs in one basket in the name of HODLing
The advantages and disadvantage shave pretty much been covered by @mk4

In extreme cases without good risk management, the losses can lead to depression just like what we witness with the gambling folks.

[adaseb]

The pros of learning them is that you'll increase your knowledge and be better equipped to be making trading decisions the downside is that you may lose money during the learning process.

We don't need to lose money went learning option trade, there has some demo trade on every broker. You can easily learn with demo account, if you don't really trust on the demo you should compare it with the real chart did the chart was getting manipulation or not. As long i know the demo account its the same chart with a real account chart.

No you shouldn't do this, don't trade demo. Trade with a small account instead or trade pennies instead of trading with a demo account.

Why? Because with demo, you have no emotion and attachement to the trades. You will trade without fear or greed and basically can easily turn a 100K demo into a million.

Then you deposit your entire savings and end up blowing them. Why? Because the game changes when its real money on the line. So open a Bitmex account, fund it with like $10 and trade with $1 units, you will never go broke this way.

[ladyfox]

In summary: You earn money faster, but at the same time you lost money faster; especially when using leverage. It's completely up to you if you're willing to do such high risk trades or not.

Oh and lastly, a huge majority of traders actually lose money.

So, basically it is gambling. In theory, can earn very fast but practically only few people come out on top but generally everyones just losing.

[ethereumhunter]

What do you guys think? Worth learning? or no? Advantages? Disadvantages?

Worth or not is only you will know

But for me, it is not worth it. I prefer to use usual trading that I already did than trying with Option, Futures, or else. I don't want to get more risk than I can afford, and I feel it is too difficult for me to learn that type of trading. I heard that the profit would be bigger, but I know that the risk will be bigger too, so I don't want to try

[ryzaadit]

No you shouldn't do this, don't trade demo. Trade with a small account instead or trade pennies instead of trading with a demo account.

Why? Because with demo, you have no emotion and attachement to the trades. You will trade without fear or greed and basically can easily turn a 100K demo into a million.

Then you deposit your entire savings and end up blowing them. Why? Because the game changes when its real money on the line. So open a Bitmex account, fund it with like $10 and trade with $1 units, you will never go broke this way.

He wants to trade without losing then i suggest the demo trade.

I also already try option trade like IQoption, if you try to trade with real money like 10, 20 or maybe 30$ just throwing money to them. The minimum trade was 1$, the good management you trade with under 1% from you total balance, a few bucks total amount trading can't really control the money management. If you already doing a trade on crypto about emotional & psychology i think everyone already knows about it, in that case, that's why I'm not explained about that.

Brokes its a different situation, in crypto or trading option i also got broke but it all depends on which money i used to do a trade. Most of the money i used for kind of trade/investment was come by my freelance earning. Went i lose it, I'm just thinking just wasting all my time went do freelance jobs. My real-life financial was not really getting the impact because of that. Used free money, not from your main money went you used it's for economy financial to avoid this kind of problem.

[exstasie]

So, I have been vanilla trading for a while(Basically HODL). I wanted to learn more about trading types and specialize into them and stumbled upon Derivative market (Options, Futures, forwards, Swaps, CFDs). Wanted to discuss about the pros and cons of learning them. At the moment I'm mainly interested in Options and Futures. What do you guys think? Worth learning? or no? Advantages? Disadvantages?

Derivatives are worth learning if you are a profitable trader. You can minimize your counter party risk with leverage, arbitrage perpetual swap interest rates, exploit contango and backwardation conditions, all sorts of good stuff. You might want to try margin trading on a spot exchange (Bitfinex or Kraken style) first to get a feel for leverage under more familiar conditions. Platforms like Bitmex can be really intimidating if you're new to derivatives.

Great thread about trading BTC options: https://bitcointalk.org/index.php?topic=5214418.0

As you can probably tell, options are immensely more complicated than futures. Futures are just contracts that settle at a future date. In a bull market, they tend to trade much higher than spot. This is called "Contango." https://www.investopedia.com/terms/c/contango.asp

If you don't want to deal with contango and backwardation and settlement fees, there is perpetual swaps, which use interest rates instead. The more demand, the higher the interest rates longs must pay to shorts. This creates incentive for shorts to take the other side of the trade, and vice versa in bearish conditions. You can "arbitrage" the market by hedging short on Bitmex XBTUSD when the funding rate is positive and simultaneously buying BTCUSD spot. Your net position = zero, but you would be collecting the interest payments on Bitmex.

[DoublerHunter]

So, I have been vanilla trading for a while(Basically HODL). I wanted to learn more about trading types and specialize into them and stumbled upon Derivative market (Options, Futures, forwards, Swaps, CFDs). Wanted to discuss about the pros and cons of learning them. At the moment I'm mainly interested in Options and Futures. What do you guys think? Worth learning? or no? Advantages? Disadvantages?

^ Scalping/day to day trading will always be the best option to start with. Wanna know why?
If you can lose money from scalping, then I will never recommend you to try risking your investment to different schemes since you cannot even make profits from scalping. Probably the best way for you to practice is scalping. You may have smaller rewards/profit, but you will learn the basics of trading. It really is hard to earn profit from trading when you are getting started. Nevertheless, you have to learn from your falls.

[Strongkored]

What suits with you will not be able to get just by asking for advice about the advantages and disadvantages as well as the pros and cons of all trading systems or types of trading.
You should immediately practice yourself with a small amount and analyze which one is most suitable to the trading knowledge that you understand at this time, while continuing to try the others and continue use small funds until you really find the right one for you.

[beerlover]

So, I have been vanilla trading for a while(Basically HODL). I wanted to learn more about trading types and specialize into them and stumbled upon Derivative market (Options, Futures, forwards, Swaps, CFDs). Wanted to discuss about the pros and cons of learning them. At the moment I'm mainly interested in Options and Futures. What do you guys think? Worth learning? or no? Advantages? Disadvantages?

I totally agree, you do not need to do derivative trading to know what it is or how it works, you should learn it for simply just learning it and that's it. If you simply learn it to be smarter about trading I am pretty sure that will work for other stuff as well.

Like let's say you will do regular trading and so forth without any other stuff, no futures no leverage no derivative, simple regular old buy/sell day trading, if you know what derivatives are you surely will become a better trader at that as well. That is why learning more and more ways of trading could only help you, even if you do not do those tradings at least you can bring some information from there to your system.

[leowonderful]

I would advise beginning traders to stay away from derivatives trading at least when starting out because it's extremely easy to misuse leverage. A lot of people are reeled into leveraged derivative trading from the success of others, but don't realize that a lot of the great success they see are from exceptionally lucky trades or gambles. There's a lot going on with derivatives that you might not initially fully understand, so if you do choose to start on a site like BitMEX, make sure you really read through the documentation provided and use the test platform if one's available (BitMEX has a testnet site).

[salkan3]

If you're new to derivatives in general, I would look into starting out with a beginner-friendly platform first.

Bitmex is far from beginner-friendly - their UI is probably one of the most complex UI's out there.

For a simple UI and zero fees I would recommend mushino. They also give you a free trading bonus that you can use to test out the trading without taking any risk.

Another option (once you get a little more experienced) is  deribit. They are decent once you have a certain level of experience. Do note that they require KYC though.