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Author Topic: Buying Bitcoin on margin - this could explode the market (and bank accounts)  (Read 2609 times)
JayCoDon
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June 09, 2015, 03:56:30 PM
 #21

The losses are definitely bigger. You're borrowing bitcoin to trade. Therefore, if the bitcoin goes down, you need to dip into your pocket to buy back the bitcoin so you can return it.
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June 09, 2015, 04:41:05 PM
 #22

The losses are definitely bigger. You're borrowing bitcoin to trade. Therefore, if the bitcoin goes down, you need to dip into your pocket to buy back the bitcoin so you can return it.
Yep, you can end up owing money to he exchange (the money the exchange gave you to do the leverage).

This is in my opinion nuts unless you want to take a big risk. Poloniex also got margin trading recently (and as a result got kicked by the Fincen to have more a restrict withdrawing policy).

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June 09, 2015, 04:47:44 PM
 #23


it's nothing more than a secure loan, that exchange give to you, then you use it to make more profit, but if the price don't move you simply give back that loan, so with a 200 deposit and x10 leverage, if the price remain 200, you will end with zero profit

but if the price will raise to 210 you will get +100 usd(10 x 10) plus another $10 from your 200 deposit, so 300 in the end

essentially a thing like this aims to encourage trading

So if the price drops 10 with 10x leverage you got 90 of your deposit left and lost 110. The profits are bigger and so are the loses.

If the value of bitcoin carries on like this +5-10 till -5-10 this is going to be an awesome way to make a bit more with day trading.



yeah there big gain but also big loss, but if you're a good traders and really confidant with your moves on the market, you should definitely go for it

also something like this comes in handy when the stability is greatly increased like now, where the price fluctuate between two close numbers and you need big money to gain something weighty
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June 09, 2015, 05:30:11 PM
 #24

The losses are definitely bigger. You're borrowing bitcoin to trade. Therefore, if the bitcoin goes down, you need to dip into your pocket to buy back the bitcoin so you can return it.
Yep, you can end up owing money to he exchange (the money the exchange gave you to do the leverage).

This is in my opinion nuts unless you want to take a big risk. Poloniex also got margin trading recently (and as a result got kicked by the Fincen to have more a restrict withdrawing policy).

I wouldn't say it's the biggest risk, but if you are good at working at tracking trends in trading, you can definitely make a considerable amount of money. Being able to grow your holdings by 10x or 20x means you can really do some great work after a year or two.
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June 09, 2015, 05:38:53 PM
 #25

that in terms of economy its not very good and not goona happen thers corrections soo the more capital in number of BTC makers the rarety go lower and the power of btc not rise much but the mining diff make rarity goes a bit higher soo the btc value may come to a big point now and the need for btc its becoming big and this pormotion of tthe coin makes it goo even higher thits its just a spark on btc but may rise a bit im not just hoping am getting every day  more sure the btc its not gonna explode the price but porgrssivly goe higher into value relativity in FIAT

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June 09, 2015, 06:51:45 PM
 #26


Margin increases demand instantaneously.

Margin increases demand but also that each time a trader buy then that means that there will be a time that he will need to sell it shortly which makes them neutral and wont affect the market at all. It is not like someone is holding after using this, someone is planning on short term which involve buying and selling simultaneously


I don't follow your thinking here - do you mean sell short or sell the bitcoin soon after buying it on margin?

Of course you dont, you are not a typical day trader type it seems

Margin is buying (or selling) on loan. Shorting is take a position on the stock/bitcoin that benefits me

I know what it is.

But if majority of people using margin are using it to facilitate quick swings in the price, then this would mute long term swings in the price.

It is not But If but it is the truth of people are doing with it and that is what I meant. Seriously why would someone even hold something for a long term which he get it from a loan? people are not doing this to be honest especially when there is a significant gain in the quick swing especially in this volatile moment.

It's a question of how many traders are using margin for short term transactions vs. long term transactions, or being able to finance hodl positions.

That would be a question for you, basically Im standing with that there will be more people that use it for quick swing instead. No one is holding things that they obtain via loan, the risk is far greater than expected profit.


As the aspects of obviously not being a daytrader comment, I think thats almost everyone.

I say a good majority arent doing this based on the ability to abritrage nor its really good to daytrade since its a higher form of gambling. You can have TA but no one can read the future of a price point.
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June 09, 2015, 07:19:34 PM
 #27

But who is going to use it then? And what will it do to the market.. More panic sells?

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June 09, 2015, 09:12:38 PM
 #28


Margin increases demand instantaneously.

Margin increases demand but also that each time a trader buy then that means that there will be a time that he will need to sell it shortly which makes them neutral and wont affect the market at all. It is not like someone is holding after using this, someone is planning on short term which involve buying and selling simultaneously


I don't follow your thinking here - do you mean sell short or sell the bitcoin soon after buying it on margin?

Of course you dont, you are not a typical day trader type it seems

Margin is buying (or selling) on loan. Shorting is take a position on the stock/bitcoin that benefits me

I know what it is.

But if majority of people using margin are using it to facilitate quick swings in the price, then this would mute long term swings in the price.

It is not But If but it is the truth of people are doing with it and that is what I meant. Seriously why would someone even hold something for a long term which he get it from a loan? people are not doing this to be honest especially when there is a significant gain in the quick swing especially in this volatile moment.

It's a question of how many traders are using margin for short term transactions vs. long term transactions, or being able to finance hodl positions.

That would be a question for you, basically Im standing with that there will be more people that use it for quick swing instead. No one is holding things that they obtain via loan, the risk is far greater than expected profit.


As the aspects of obviously not being a daytrader comment, I think thats almost everyone.

I say a good majority arent doing this based on the ability to abritrage nor its really good to daytrade since its a higher form of gambling. You can have TA but no one can read the future of a price point.

Well actually my point is that im basically stating than margin trading wont affect or boost any "real" demands for BTC as per he stated because I do understand that this is risky and mostly daytrader use it to get a quickswing on profit and not to keep and hold of it. I am a daytrader months ago and I do know what most daytrader will do if they use this option


But who is going to use it then? And what will it do to the market.. More panic sells?

Nothing basically, it will be use as a quickswing for most trader and the exchanger will get an interest from it, nothing to shabby and it wont affect the market or increase the demands for BTC
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June 09, 2015, 09:54:16 PM
 #29

well there is a big risk on the margin that way since as already said bitcoin can lose worth soo some peope will easy loose too many btc.... one advice be away of it forex wont make you rich and those marging leverage is the same way .... 1 proof and 1000 loose....
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June 09, 2015, 11:44:54 PM
 #30

I don't get it ... Say that leverage is 10x and I deposited €200 , and bought 10 bitcoins using 10x leverage, and I withdrew those bitcoins, what will happen?  Roll Eyes Roll Eyes  Grin

Or, you are just buying BTC/EUR pair like in a Forex bucket shop, no physical delivery of either euro or bitcoin  Huh

Once you sell the BTC (or at some defined time after you've taken the loan) you have to pay it back. So the principal of your original trade (minus what you deposited) goes back to the bank/firm. You pay a small fee and then keep the gains off all that you borrowed + deposited. You're getting most of the return off someone elses money.

Physical delivery or not is dependent on how you or the firm you work with structures the trade, but it could be either.

It's great when the trade goes in your favor. If the trade doesn't go in your favor you can blow yourself up pretty quickly.

But if I have deposited €200 and withdrew 10 bitcoin, I might never come back to this exchange, so I guess they have to limit the amount of withdraw to be less than my deposit, e.g. I could withdraw maximum 1 bitcoin in this case, the rest 9 stays in their database, waiting to be wiped out by a margin call

I would be weird if you could withdraw more then you actually funded your account for, so should be somewhere like the way you explained.

I quess you cannot withdraw untill you paid of your margin part, so you might not even be able to withdraw the one bitcoin you funded untill your margin call is wiped out and youre back to zero on that.

So it is only a number game in the platform to wipe out users more quickly, like those Forex bucket shop. Gamblers like it

it's nothing more than a secure loan, that exchange give to you, then you use it to make more profit, but if the price don't move you simply give back that loan, so with a 200 deposit and x10 leverage, if the price remain 200, you will end with zero profit

but if the price will raise to 210 you will get +100 usd(10 x 10) plus another $10 from your 200 deposit, so 310(200 from your deposit with a net profit of 110) in the end

essentially a thing like this aims to encourage trading

It is a number game in exchange's database. I have seen Kraken price lower than other exchanges from time to time, maybe a way to trigger the long orders' stop loss, but without leverage they could not wipe out traders at large scale using a margin call

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June 10, 2015, 12:21:35 AM
 #31

guys here just thinking on profit and avoiding the loss soo before enter on this remember you can make 110 dollars profit as you can loose 90 dollars soo try to invest or trade just btc instead enter on this game that will lead several people to loose they precious money ,bitcoin.
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June 11, 2015, 12:15:52 AM
 #32

The losses are definitely bigger. You're borrowing bitcoin to trade. Therefore, if the bitcoin goes down, you need to dip into your pocket to buy back the bitcoin so you can return it.
Yep, you can end up owing money to he exchange (the money the exchange gave you to do the leverage).

This is in my opinion nuts unless you want to take a big risk. Poloniex also got margin trading recently (and as a result got kicked by the Fincen to have more a restrict withdrawing policy).

Usually, if the price of bitcoin starts moving in the opposite direction, the exchange will make a margin call to you. If you fail to deposit money quickly, they will sell your coins. That way they don't have to worry about recovering money from you.


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June 11, 2015, 12:52:52 PM
 #33

instead enter on this game that will lead several people to loose they precious money ,bitcoin.

It is indeed not a game to begin with, it is the same as normal daytrading despite that you could take up "loan" which ofcourse will either double up your profit or double up or lose as well.
This is how most daytrader do a quickswing for profit , in which you can see that two days ago price was around $227-228 and yesterday we hit $230. Instead of 1 BTC with this you could get x10 of it and gain $20 quickswing profit. Its nothing more than a number in database and ithas no effect to the market
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June 11, 2015, 04:10:35 PM
Last edit: June 11, 2015, 05:23:17 PM by ShopemNL
 #34

instead enter on this game that will lead several people to loose they precious money ,bitcoin.


It is indeed not a game to begin with, it is the same as normal daytrading despite that you could take up "loan" which ofcourse will either double up your profit or double up or lose as well.
This is how most daytrader do a quickswing for profit , in which you can see that two days ago price was around $227-228 and yesterday we hit $230. Instead of 1 BTC with this you could get x10 of it and gain $20 quickswing profit. Its nothing more than a number in database and ithas no effect to the market

The only reason they call it margin trading is because Loan trading wont sell.

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June 11, 2015, 10:42:46 PM
 #35

i keep saying is very fast way to proof as too loose our precious bitcoin.. soo stay away from it or try with small ammount test it
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June 11, 2015, 11:30:59 PM
 #36

instead enter on this game that will lead several people to loose they precious money ,bitcoin.

It is indeed not a game to begin with, it is the same as normal daytrading despite that you could take up "loan" which ofcourse will either double up your profit or double up or lose as well.
This is how most daytrader do a quickswing for profit , in which you can see that two days ago price was around $227-228 and yesterday we hit $230. Instead of 1 BTC with this you could get x10 of it and gain $20 quickswing profit. Its nothing more than a number in database and ithas no effect to the market
When you do leverage you are also always a lot more scared and prone to cut loses because you can end up owning money to the exchange. There is no middle ground. It's very tempting to do leverage and wait for the almost daily up and down of 10 USD and get a ton of money, but you never know when things can screw you up really bad.
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June 12, 2015, 01:53:15 AM
 #37

...

Wow

I would never trade BTC on margin.  The risks are just way too high.  For me anyway.

In the 1990s, I took a shot at buying some cheap PUT options on the S&P 500 in the fall.  Betting that stocks would go down.  I did this six times.  I lost some or all of my wagers EACH TIME.  I also am not lucky in casinos, proven many times.  So, I no longer gamble.

"Someone" did a study on day-traders, and found that WAY many more lose than win.
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June 12, 2015, 02:35:33 AM
 #38

...

Wow

I would never trade BTC on margin.  The risks are just way too high.  For me anyway.

In the 1990s, I took a shot at buying some cheap PUT options on the S&P 500 in the fall.  Betting that stocks would go down.  I did this six times.  I lost some or all of my wagers EACH TIME.  I also am not lucky in casinos, proven many times.  So, I no longer gamble.

"Someone" did a study on day-traders, and found that WAY many more lose than win.

well as i said already forex or margin trading with bitcoins will make several people to loose money only exchanges will proof with it
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June 12, 2015, 09:45:48 PM
 #39

instead enter on this game that will lead several people to loose they precious money ,bitcoin.

It is indeed not a game to begin with, it is the same as normal daytrading despite that you could take up "loan" which ofcourse will either double up your profit or double up or lose as well.
This is how most daytrader do a quickswing for profit , in which you can see that two days ago price was around $227-228 and yesterday we hit $230. Instead of 1 BTC with this you could get x10 of it and gain $20 quickswing profit. Its nothing more than a number in database and ithas no effect to the market

When you do leverage you are also always a lot more scared and prone to cut loses because you can end up owning money to the exchange. There is no middle ground. It's very tempting to do leverage and wait for the almost daily up and down of 10 USD and get a ton of money, but you never know when things can screw you up really bad.

Cut lose is a crucial strategy to use because it is far more risky not to cut lose when the price is declining. Also that it is not like that you are losing this "game" once you have cut lose anyway because there is a chance that the  value might rally back soon. Traders spent like more than 6 hours just to trade, so cutting lose once or twice isnt really gonna affect your run on trading but it will just make it harder for you

"Someone" did a study on day-traders, and found that WAY many more lose than win.

Of course and it is a fact that whenever someone "win" on trading than there are someone who "lose" on it. Day trading alone is risky enough but if you are good at it, leverage is a great way to make a quickswing for profit
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June 12, 2015, 09:52:40 PM
 #40

margin trades leverage wont make no one rich ,even expert traders loose some money ,and if they dont loose is because they invest on the largest leverage that will hold the money winning or loosing interest.... i saw several forex traders with 200% profit and some 10 orders that were on 45% of the total loss allowed..... soo they lost those money already.
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