Kataryna Habeliia April 14, 2021
Table of Contents [hide]
- 1 How to trade cryptocurrency without losses? Bitxmi expert tips
- 1.1 Arbitration
- 1.2 Conservative portfolio
- 1.3 Futures
How to trade cryptocurrency without losses? Bitxmi expert tips
Any transaction with cryptocurrency is accompanied by the risk and the likelihood of being in the red. But there are ways to minimize losses and trade practically without losing trades.
When trading cryptocurrency, risks arise that can not only deprive the investor of profits but also lead to losses. This usually happens when the risks are incorrectly assessed and the strategy is not suitable. Risk is an integral part of working with cryptocurrencies, and there are ways to reduce it to a minimum and reduce the chance of loss to almost zero.
A large number of cryptocurrency exchanges allow you to make money on arbitrage transactions, using the fact that prices for the same asset vary widely on different exchanges. As an example, BitXmi experts cite the so-called “kimchi prize”.
In early April, the cost of bitcoin on the South Korean crypto exchanges Bithumb and Korbit reached $ 69 thousand. But the average market price of the main cryptocurrency was $ 58.5 thousand. In the field of digital money, such a difference between quotations in South Korea and the rest of the world is called the “kimchi premium.” This concept arose back in 2017 when bitcoin was traded at $ 20 thousand, and on the South Korean exchanges, its price rose to $ 24 thousand (+ 20%). At the beginning of the month, the “kimchi premium” reached 18%. As of April 14, it is 11.6%.
To eliminate losses, you need to diversify your investment portfolio as much as possible and choose low-risk assets for it, BitXmi experts advise. The better the crypto portfolio is diversified, the more evenly the risks of depreciation of certain assets are distributed over it. The higher the potential return on investment, the higher the risks.
“Altcoins and DeFi products are considered highly risky, so it is not recommended to include them in your portfolio with a strategy with minimal losses,” experts say.
The best scenario for breakeven trading is long-term investments in major cryptocurrencies such as Bitcoin and Ethereum. Experts advise to open a position not once for all available funds but to periodically buy additional assets in equal parts. This will average the purchase price and reduce the risks of entering the asset at the peak.
In theory, you can trade cryptocurrency at break-even using bitcoin futures with delivery in a few months — they have an impressive premium to the spot market. Experts explain that on some crypto exchanges the premium can be up to 40%.
“What should a trader do? Buy on the spot market and sell futures and, after some time, profit from the fact that the prices of the futures and the spot converge (when the expiration date approaches). “
The disadvantage of this approach is that a short position involves borrowing money from a broker or exchange, experts warn. And this is not an interest-free loan, and the payment greatly affects the final result.
We remind you that on the BitXmi crypto exchange, futures trading with a leverage of 125% is available. Come in and get profit now.
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