BitFinex Q&A thread: users helping users

[myself]

bitfinex is still on beta


1) the FAQ
https://bitfinex.com/pages/faq
2) fees
https://bitfinex.com/pages/fees
why there is a computation fee ?
to avoid order book spam and cancel

3) interest /swaps
https://bitfinex.com/pages/interest
why is this put in place ?
to provide funds for users that want to go long or short

4) accounts wallets management
https://bitfinex.com/managewallets
what are wallets?
each account have 3 wallets
1 for exchange
2 for margin trading aka leverage trade
3 deposits this is the money u lend to order users and earn interest

5) exchange
https://bitfinex.com/exchange
whats the deal ?
1 you can cross trade between mtgox and bitfinex (buy in mtgox sell on BFX)
2 lower mtgox fees
see this thread http://bit.ly/Uqjolq

6) trade using leverage
https://bitfinex.com/trading
orders
1 trailing stop
if the price is 10 usd and u want to trail your longs at 20 cents below the top price in the price field u put 0.20
if the price go at 10.10 then your trailing stop is at 9.90 from 9.80
if the price goes to 10.30 your trailing stop take you to 10.10
if the price goes back to 10.11 your trailing stop is still at 10.10 ( 0.20 below the top)
if the price goes below 10.10 you are out of the market
2 stop
if the price is 10 and you want to close your position if the price drops 0.10 then you put on the stop [sell] field 9.90
2a stop entry
the price is 10
there is a huge wall at 10.10 and you want to get in the market if the wall get eaten or canceled
you put a stop [buy] at 10.15 for example
3 limit
you buy or sell at  a fixed price
4 market
you buy or sell at market price expect slippage
5 limit vs stop entry
limit order allow you to buy cheaper that current price or to sell more expensive that the current price
stop entry allow you to buy more expensive that the current price and to sell cheaper that the current price
see point 2a for a example

8 ) BFX order book
https://bitfinex.com/pages/order_book
9) level 2 order book, so far is mtgox order book+ bfx orderbook
https://bitfinex.com/pages/ll_order_book


ask questions i will try to answer them doing my best

[adamstgBit]

I want to go Long.

I sent BTC to the account.

can i take a long position with BTC or do i need to first sell my bitcoin on MtGox and then transfer MtGox Codes?

[myself]

I want to go Long.

you need USD from other users or the platform

can i take a long position with BTC

if there are USD yes

or do i need to first sell my bitcoin on MtGox and then transfer MtGox Codes?

no, your usd/btc balance is to guarantee your position you dont use your own money to leverage you use borrowed money

the only case you use your own USD to buy bitcoins is using the exchange

[adamstgBit]

what does the * mean, BitFinex doesn't have the USD available to take long positions?

[myself]

▼*13.67890

what does the * mean, no USD available to take a long?

afaik means the platform does not have USD for you to take a long

below you will see if there are users that want to lend you money

[proudhon]

Jesus, are we seriously doing this again?  Wait till Gox or somebody else reputable supports margin trading.

[adamstgBit]

I have a feeling its rare BitFinex has enoght USD to take long positions  

Jesus, are we seriously doing this again?  Wait till Gox or somebody else reputable supports margin trading.

How secure is Bitfinex?

Security is our number one priority .Your bitcoins are stored in cold wallet only, and the servers only use watch-only wallet, powered by Armory, to monitor deposit and balances. All bitcoins withdrawals requests are processed manually, once a day, every business day. Our servers are secured using the best technologies available, but even if someone were to hack into them, there is NO HOT WALLET and no private keys to steal, at all. Passwords and exchange API keys are stored encrypted. The rest of our funds are stored in exchanges that already proved themselves secure (currently only MtGox)
Yes, that means your withdrawal can take up to 24h, more on week-end. That's how you can be sure your bitcoins are safe.

The keys and credentials allowing access to others places where we hold our funds are (exchanges) are encrypted, and only grant the right to trade with the funds, not to withdraw them.

Our database is automatically backed up every day and stored in offline storage.

I think Bitfinex will prove to be reliable & safe
feels like the platform just needs more users
Sign up today!

[myself]

I have a feeling its rare BitFinex has enoght USD to take long positions  

like i did explain on the spanish forum some days ago https://bitcointalk.org/index.php?topic=127917.msg1375973#msg1375973 usd funds get used fast and any "outside pour of money" will have a huge effect on the price so users using the deposit feature is a much more healthy way to finance longs or shorts

I think Bitfinex will prove to be reliable & safe

patience this is a long journey, so stay small use gambling money to try things out

[yogi]

Jesus, are we seriously doing this again?  Wait till Gox or somebody else reputable supports margin trading.

I suspect Bitfinex will become reputable before MtGox implements margin trading.

[adamstgBit]

say i send money to BitFinex, and i make it available for lending to traders.

the trader uses the loan to trade and makes a profit, I get my money back + interest. very cool!

But what if the trader makes bad trades and loses all the money, i lose all my money as-well?

[yogi]

Are the interest rates for depositors fixed or floating?

If they are floating how are they calculated?

[adamstgBit]

Are the interest rates for depositors fixed or floating?

If they are floating how are they calculated?

i believe the depositor chooses a fixed rate himself.

traders are offered the best rate made available by all the depositors

[myself]

But what if the trader makes bad trades and loses all the money, i lose all my money as-well?

he gets a margin call when the loss get close to the total amount of his deposit and your interest is payed each hour so your should not lose the interest if he get a margin call

[myself]

i believe the depositor chooses a fixed rate himself.

this will come in the next iteration for the deposit feature (a debt market) AFAIK now the interest is calculated on the same way is got calculated when used platform money

[unclescrooge]

say i send money to BitFinex, and i make it available for lending to traders.

the trader uses the loan to trade and makes a profit, I get my money back + interest. very cool!

But what if the trader makes bad trades and loses all the money, i lose all my money as-well?

As Myself said, the risk of loss is on the trader, not the lender.  If you lend 100 usd, the trader goes long for 9 btc with this money and the price drops of 50%, the trader loses 50%, you get your 100 usd back + interests

And if ever the margin call doesn't prevent the trader of losing more than his balance, the loss if on bitfinex (that shows you how we make sure the trader balance never goes negative, like you we don"t like loosing money ).

[unclescrooge]

Are the interest rates for depositors fixed or floating?

If they are floating how are they calculated?

i believe the depositor chooses a fixed rate himself.

traders are offered the best rate made available by all the depositors

Actually, this will comes in a few days: the depositors will propose their own rates, and the best will be chosen when opening a position.

A few days left beffore I roll out this feature.

[unclescrooge]

i believe the depositor chooses a fixed rate himself.

this will come in the next iteration for the deposit feature (a debt market) AFAIK now the interest is calculated on the same way is got calculated when used platform money

the interest earned are, for now: the interests charged on open position / the depositors money invested.