Trading with Stable Coin - Question

[worldtraveller321]

hi i have a question

if one is trading with Stablecoins based in fiat USD

using this as example

say i bought into BTC at USD price of $7000 usd

price goes up to 10000 USD

at that mark i trade into Tether or another stablecoin

to hold my gains

BTC goes back down to 8000 usd

BTC starts cllmbing again

when would i trade back into BTC to not make any loss and just get more gains?

would i wait till it gets to 10000 USD and trade in?

or a bit higher? suggestions as i always mess this one up. thanks

[1713979236]

1713979236

[mk4]

Quite a confusing question. How would you make losses if you're just holding USD? As for making gains, of course you buy back into BTC when you anticipate that it goes up; regardless of price.

And just a heads up: the way you describe your trading "strategy" might sound too simple and easy to pull off in your head, but trust me when I say it's not that easy to time the markets.

[Salauddin1994]

Stable coint USDT but no chance losses or no chance to gain up in the general sense we are reluctant to take risks because we think that taking risks can lead to harm we always take negative things seriously. The main reason is that our humanity is so much that we take a risk and lose we take the issue of profit very seriously i personally think that bitcoin is more profitable than stable coins for trading.

[MCDev]

Are you wondering, at what price range should you trade to avoid losing your USDT?
Of course, people will answer that you should buy bitcoin when you anticipate it to increase in price. However, to be able to predict the time of bitcoin's price increase is difficult, even the most professional traders on the market are difficult to predict exactly when.

[webtricks]

Note: You are using stable coin as your initial investment hence all profit/loss shall be calculated in terms of stablecoin (USD here in)

Now coming to your case:

Your initial investment = $7,000
You bought 1 BTC and sold 1 BTC for $10,000

After first trade cycle, profit is $3,000.

Now you are confused as to when buy BTC again to make more profits, right. But buying BTC is just one half of the trading cycle. It doesn't matter if you buy BTC at $8,000 or above $10,000, what matters more is when you sell the bought BTC of the second cycle.

For example, buying bitcoin @ $8,000 will give you 1.25BTC in second cycle but you will end up in loss if market is bearish and you sell @$6,000 in which case your net investment after two cycles will be $7,500 ($500 profits).

Whereas, buying bitcoin @ $12,000 will only give you comparatively 0.833 BTC but if market is bullish and you sell off @ $14,000, your net investment will be $11,667 ($4,667 profits).

So if you think forward market anticipation is positive then entering into market again at the price above you last sold i.e. $10,000 isn't a bad strategy. On the contrary, if you think forward market anticipation is negative, buying below $10,000 isn't always a good strategy.

[Cryptoangel01]

Quite a confusing question. How would you make losses if you're just holding USD? As for making gains, of course you buy back into BTC when you anticipate that it goes up; regardless of price.

And just a heads up: the way you describe your trading "strategy" might sound too simple and easy to pull off in your head, but trust me when I say it's not that easy to time the markets.

Yeah quite a confusing question but then it's quite easy to time the market as well. I trade only from Mondays to Fridays, the week I trade weekends it could be because the market is looking favorably that weekend. I end trades in Fridays to stay profitable

[joniboini]

I trade only from Mondays to Fridays, the week I trade weekends it could be because the market is looking favorably that weekend. I end trades in Fridays to stay profitable

I'm sure he refers to the entry and exit point. As for the days I'm not sure that cycle will continue (or if the cycle exist in the first place), since fundamental might changes on Saturday or whenever it happens.

OP is basically trying to ask how he should trade and find the entry point, which does not have a single answer since it depends on the market, literally. In a bullrun you probably don't have to think about entry point since the trend will go up anyway, and vice versa.

[tranthidung]

It is complicated and I can not give your perfect answer. At least, I can give you something.

You need to consider some factors

• How stablecoins change with Bitcoin's rises/ falls, pumps/ dumps?
• Their volume: high or low. Just to have convenience when you want to exit.
• Their companies and backed-asset for those stable coins (real or fake, any scandals/ accusations)
• How the price of stablecoins on your local markets. I meant local prices can be very very different than global prices. Global and local prices can have positive or negative correlations, it depends on specific nation.

Let's see the changes (in %) of low daily price of some stable coins with different categorisations of bitcoin

• Positive: Changes are >0%
• Negative: Changes are <= 0% (also include neutral values, no changes at all on some days).
• For more details with formula, please check at those sources
  
  • Bitcoin pumps/ dumps and altcoin price actions (2013 - 2020)
  • Better using DAI or USDT?

Box plots

Pumps/ dumps

• Pumps: 36 days. Dumps: 27 days.
• You can see when bitcoin pumps (I repeat, the threshold used here is +5%), stable coins mostly increase in value compare to USD. It is easily if you look at the vertical lines inside boxes, they mostly are above the 0 value.
• In contrast, when bitcoin dumps (with -5% as a threshold), stable coins mostly decrease in value compare to USD.

Negative (and neutral) / Positive changes

• Positive: 373 days. Negative/ neutral: 115 days.
• Positive changes of BTC: Stablecoins almost increase in value compare to USD.
• Negative/ neutral changes of BTC: Stablecoins almost decrease in value compare to USD.
• The severity of stable coins' changes are less than of BTC's pumps/ dumps, of course

Raw data
Pumps (36 days, 17 days for DAI)

Code:

    variable |         N      mean        sd       p50       p25       p75       min       max
-------------+--------------------------------------------------------------------------------
   pclowUSDT |        36  .6830555  1.821859      .375      .015     1.025     -2.25     10.11
    pclowPAX |        36  .7861111  2.211367      .315       .01         1     -2.56     12.74
   pclowTUSD |        36  .4744444  1.087323      .315       .02       .78     -2.52      4.89
   pclowGUSD |        36  .2697222  2.339506        .1     -.375      .555     -8.38      7.39
    pclowDAI |        17  .2776471  1.710817       .71      -.71       1.4     -3.03      3.63
----------------------------------------------------------------------------------------------

Dumps (27 days, 12 days for DAI)

Code:

    variable |         N      mean        sd       p50       p25       p75       min       max
-------------+--------------------------------------------------------------------------------
   pclowUSDT |        27 -.7092593  1.450159      -.24      -.84      -.03     -7.09       .99
    pclowPAX |        27 -.6107408  1.944948      -.14       -.5        .2     -9.56         1
   pclowTUSD |        27 -.4025926  1.137989      -.16      -.46       .08     -4.63         1
   pclowGUSD |        27  -.877037  2.962317       -.6     -1.59       .06    -12.24      7.13
    pclowDAI |        12 -.9141667   1.56615     -1.07    -1.445      .095      -4.9       1.5
----------------------------------------------------------------------------------------------

Positive (373 days, 184 days for DAI)

Code:

    variable |         N      mean        sd       p50       p25       p75       min       max
-------------+--------------------------------------------------------------------------------
   pclowUSDT |       373  .1316354  .7572447       .02      -.13       .34     -2.25     10.11
    pclowPAX |       373  .0885255   .868664         0      -.14       .23     -2.56     12.74
   pclowTUSD |       373  .0672118  .6139058         0       -.1       .21     -2.52      4.89
   pclowGUSD |       373  .1794906  1.191058       .11      -.15       .47     -8.38      7.39
    pclowDAI |       184  .1829348  1.051703       .09      -.13       .85     -5.93      3.63
----------------------------------------------------------------------------------------------

Negative/ neutral (276 days, 139 days for DAI)

Code:

    variable |         N      mean        sd       p50       p25       p75       min       max
-------------+--------------------------------------------------------------------------------
   pclowUSDT |       276 -.1749275   .665864      -.06     -.255       .06     -7.09       2.1
    pclowPAX |       276 -.1126449  .7741533         0      -.22       .17     -9.56      1.51
   pclowTUSD |       276 -.0861957  .6249855         0      -.22        .1     -4.63      3.18
   pclowGUSD |       276 -.2237681  1.300436       -.1      -.59      .205    -12.24      7.13
    pclowDAI |       139 -.2021583   .998204         0      -.66        .1      -4.9      5.25
----------------------------------------------------------------------------------------------

Reminder

• Above are for global prices of BTC, stable coins.
• You also need prices of stable coins on your local exchanges or marketplaces.
• To get profits, you need a combination of them.
• For you case, pay attention on statistics for pumps/ dumps.

[ReiMomo]

It's simple logic that you must understand.

I used stable coins to divert my bitcoin into a stable coin when bitcoin drop the price.

I you bought btc at $7k and suddenly the price of bitcoin goes up to $10k and you have gained $3k. And you have a plan to buy again in usd but the price of bitcoin was still $10k range. There's no problem if you buy back again stable coin but make it sure bitcoin at a bullish trend so that you can see that there is your profit.

The explanation above was right, you can do the math just your own too if you want. Diverting to stable coins need perfect timing to gain profit.

[bitgolden]

Well, if you bought bitcoin at 7k sold at 10k, and even if it drops to zero you still made your profit in fiat and that is not your problem anymore. The question of "how could I avoid losses" and the question "or make more money" are different ones.

If you keep buying at low and sell at high you will keep making profit, keep buying whenever you think bitcoin is low and keep selling whenever you think it is high and your fiat will continue to rise, but if you are in profit and have fiat, you do not really need anything more to not lose money, your usdt doesn't lose itself suddenly, it doesn't go down when it is staying still, hell you could cash it out to your bank account and request fiat in cash form and you would be set with your profit without any more trading.

[iamsheikhadil]

Well, it heavily depends on your risk taking ability and how much patience you can have before going for the greed. The thing is, btc just doesn't move from 7k to 10k then back to 8k in hours or days, it's going to take weeks. So, you gotta have self control as well to not sell it for smaller profits let's say from 7k to 7.5k!

So, if btc goes down from 10k to 8k, that's a signal that you should buy at that time because you have already made profit. Even if it goes below 8k and you might make a temporary loss, waiting for few weeks and it will go up again to 10k!

[Peanutswar]

If you want to use bitcoin for trading you have two options.
1. Buy now sell later - this is the fastest way if the market of the bitcoin is very volatile. Short investment
2. Buy now hold later - this is the time when you will hold your coins after you bought and wait for the specific price before pulling out. Long term investment

Also it depends on you where you will follow this or not, sometimes if they already earned enough money or funds they already drop the position, better to become aware about the price because greedy may takes you down.

[slaman29]

I think to help end the confusion, just think of USDT/Stablecoin AS fiat. It's not fiat, but the reason people do stablecoins is to have a system that resembles fiat and allows people to hold value.

So don't confuse yourself and just think of your Tethers as actual USD.

[Vicky agarwal]

trading is very complex and very simple ,it depends on you how you take it ,i am focus on doolars only ,some focus on quantity only

[Ucy]

If you buy Bitcoin at $7000 with $7000 and the price goes to $10,000, your $7000 become $10000 and you exchange the $10,000 back to stablecoin... Your profit is about $3000.

Keep about $2000 back in the stablecoin, then use the remaining $8000 from the stablecoin to purchase another Bitcoin, , if Bitcoin goes back up to say $10,000, you exchange it back to stablecoin with additional profit of $2000. Your total profit is more than 50%  of  your initial investment of $7000

[teosanru]

hi i have a question

if one is trading with Stablecoins based in fiat USD

using this as example

say i bought into BTC at USD price of $7000 usd

price goes up to 10000 USD

at that mark i trade into Tether or another stablecoin

to hold my gains

BTC goes back down to 8000 usd

BTC starts cllmbing again

when would i trade back into BTC to not make any loss and just get more gains?

would i wait till it gets to 10000 USD and trade in?

or a bit higher? suggestions as i always mess this one up. thanks

I have seen a lot of people trying to explain various different things from analysis of past days to everything. But let me tell you the truth of being a trader. A trader is a person who doesn't care if btc is 7000 or 12000 or even 100,000. He is interested merely in buying btc and making profits. Someone who is holding btc isn't a trader. Now I'm cryptocurrencies there are two types of traders. One are who trade keeping Bitcoin as base currency and buy/sell Alts and try to increase their BTC count. But since btc has become bearish these people are actually suffering losses. So there is another set of people who trade by keeping USDT as main balance and see if they increase their dollar count. These people actually make more sense as your monthly targets of earning this much dollar is quantifiable but you generally miss out on some gains. For example if a trader would compare him with holder he might feel he has lost in bullish market.

Coming to your question. Just keep it simple. You put let's say 10000$ in your account. Now if you buy btc at $7000 at book a profit at $10000. You earned a profit of $3000 and now you have $13000 in your account. Now you don't have to care where BTC goes. Now if BTC goes back at 8k you don't lose anything. So just buy your BTC book profits at count profit as how much increase you have in your wallet in terms of dollar.