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Whats up everyone, its Austin over here at
the crypto playhouse and today I’m going to
be talking to you about something I’m really
passionate about. Today were going to be talking
about going short in crypto. Now if you’ve
been in the space for a while, then obviously
you hear it all the time, HODL, HODL, HODL,
HODL. Everyone seems to think this is an investment
strategy, in my opinion it’s really not. If
you just want to throw some money at crypto,
make some money down the line, then sure go
for it. But if you want to be trading and
actually making money on crypto playing the
market, you have to play both sides. You can’t
just go long forever, so today we’re going
to dive in, we’re going to talk about why
you should be going short, and were going
to also look at the Kraken cryptocurrency
exchange, and were going to be showing you
how to open up your first short position.
Okay, so I know I’m probably going to have
some crypto purists that have their pitchforks
out chasing me after this one. I got into
crypto because I really was into the technology,
I got in through mining, so it should be said
that i didn’t start out as a trader, but it
is part of what i do to sustain myself by
working in crypto. And I see it so often nowadays,
everyone just says HODL, HODL, HODL. This
really just…guys, this is not trading, this
is not an effective method to make money.
I’m sure that there are people out there,
that you got in early enough that this might
work for you but the reality is, if you’re
sitting there and you’re just “hodling” everything,
you’re essentially just opening a long position
forever, and that’s not trading, it’s really
not. If you want to play this market…Say
Ethereum goes up by fifty dollars okay? And
you’re already holding Ethereum, great it
went up by fifty bucks! Now if it turns and
it comes back down fifty dollars, I hear people
say all the time, you should’ve just held!
Well, if you’d just gone short, you could’ve
just made fifty dollars and you could’ve reinvested
it into Ethereum. And that’s something that
i really think people don’t understand. And
it is a very important concept to get about
going short.
You can go short and still support that coin.
I hold a bit of Ethereum on this account just
so that I can short it literally so I can
build up that position. You know people seem
to have this idea that if you’re going short
it’s against the coin. No! I literally go
short so I can make my main “long” position
as you would say, my “HODL” much larger. And
I think that’s a core thing you have to remember
that might get you more motivated to go short.
Don’t think of it as selling and getting rid
of it, you can really bolster your own portfolio
and build it up with the profit you make from
these shorty positions.
Okay so hopefully we’ve got you a little bit
convinced that going short isn’t completely
evil, seriously guys you can go short and
still support the crypto that you’re going
short on, it’s not that big of a deal. But
really, what is going short? So for starters,
going long is what everyone knows. When you
buy or you “HODL”, you’re going long. You’re
opening up a position and saying i believe
that this coin is going to go up, so I’m going
to buy and when it goes up I’m going to sell
that and realize my profits. All that going
short is, is basically you’re taking the other
side of that trade. So essentially this process
is, you’re going to have a margin account,
which is basically collateral. That’s the
best way to think of it. And what you’re doing
is you’re going and you’re saying I believe
this coin is going to go down. So some exchanges
provide a service that basically says, alright
if you want to go short, we have these people
that hold their coins and it’s going to be
in their portfolio, they’re not going to be
trading it and we have access to those. So
you pay a small rollover fee which I believe
with Kraken is every four to six hours. The
fees are very minimal, you’re talking about
pennies. But essentially you’re going to pay
a little bit to borrow shares from someone
else and you’re expecting those to go down.
So you’re going to borrow those shares sand
you’re going to sell them. Okay, now you’re
collateral is going to cover that, so if it
goes against you it will eventually liquidate
that. Were not going to talk about margin
calls and all of that today, there’s much
more to it.
But the biggest thing to take away, is when
those prices go down and you’ve already sold,
all you have to do is you go back in and basically
you exit the position by buying back those
same shares that you sold at the top. And
all that going short is, is you’re taking
that difference from where it was to where
it is now, and that is the profit that you
realize, and you return your shares. So yeah,
going short is really just taking the other
side of a long trade.. There’s nothing wrong
with this, there’s nothing evil about going
short. In all reality a market where you can
short, actually improves accountability in
my mind. Because in a market where everything
is long positions it’s very hard to interpret
what the general consensus on the market is.
You have to have two sides to a trade you
know. I know that a lot of people say, well
you know you should just hold, its good for
the cryptos, its good for the community. I
actually have to disagree. If a crypto is
not doing well, people should be selling it.
Markets are supposed to be indicative of how
that project is doing. Going short is important.
Go short guys!
Alright, so we’ve talked about what going
short is, we’ve talked about why you should
do it, so now let’s jump in, actually take
a look and open up your first short position!
Now it should be mentioned that I’m using
Kraken. You can do this on Bitfinex, Poloniex,
there’s a number of platforms that do offer
the ability to go short now. But the options
are more limited. Personally I’m just comfortable
with Kraken. I have a little side account
here we’ll show you how to do it from. Personally,
you can put in all of your info into here
and do your order through this format. I much
prefer the traditional kind of “trading” style
with your chart and everything here.
So were going to come in and were looking
at Monero today. I’m actually just going to
open the position up. As you guys can see
here we actually had a little recording going
on before and had some technical issues. So,
be happy, I lost profits so that i could make
this for you guys! Anywho, so it’s very simple,
we’re going to come over here, and we want
to make a sell order. And let’s see, we want
it to be a limit and the price is currently
at $153.67, and I actually do want to open
this position so, lets say I’m going to go
in for two times leverage with three Monero,
and lets say i want to sell at $153.65. So
were just going to enter that in there. Good
until canceled, that’s completely fine. And
basically this little red dot right there
is showing where we’re going to be opening
it up. So it’s a as simple as that, were just
going to go, sell. It’s going to ask for our
confirmation, i know everyone always just
hits confirm, but seriously guys review your
orders. Especially when you start getting
into more advanced orders where say you’re
going short or if youre doing a rolling stop,
or something like that, you absolutely should
check your order confirmations. It’s very
Alright, so were going to come in here, we’ve
got it. Were going to confirm our sell, and
there you go! We have officially borrowed
three shares of Monero, we’ve sold them on
the market and now we’re waiting for the market
to go back down so that we can buy those shares
back and realize our profit. Now, right now
as i said it will open up this red dot, and
you’ll see as the price comes down it will
lower this way. And yeah, it’s really as simple
as that guys! That is opening up a short position.
Now as I mentioned I am actually going to
hold this position throughout the day. So,
I’ll show you how to exit it, but I’m not
actually going to initiate. It’s basically
as i said, just the other end of the trade.
So in this case we have three Monero thats
up and let’s say that we want to exit around
$145 USD. So that’ll be realizing close to
nine dollars of profit per share, so all you
do is say that we want to buy back at $145.
It’s going to ask for confirmation, and essentially
what this will do, is once that price gets
down to where our green point at $145 is,
it will buy those shares back. You return
the shares to the person you borrowed them
from and you realize your profit. It’s really
not that scary, it’s not that complicated,
i think that a lot of new traders stay away
from it, there’s something that even feels
a little bit wrong about getting excited as
you watch the market plummet. But guys, going
short is a n essential tool for any trader.
If you’re avoiding this you’re really just
damaging yourself.
Alright i hope you guys found this video useful,
,maybe there’s somebody out there that has
finally decided going short isn’t evil and
they’re about to open up their first short
position! But anywho, we’d love to hear from
you guys! You know, what would you like to
hear about going short? Is there something
you don’t quite get that we could help you
out with? Let us know in the comments, well
get back to you! We want to know what our
followers are looking for with trading.
Along with that, you should check us out on
Steemit, alot of our analyses are being posted
on Steemit and we give a breakdown of how
were making our trades. So definitely head
over there and check us out. Were getting
a lot of great content and it’s really growing.
Stay decentralized people!