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FX4BTC Signal

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  • HedgeBitcoin

    Bitcoin Market News:
    Bitfinex, largest bitcoin margin trading exchange was recently hacked ( $70million in bitcoin stolen from the bitfinex customers). The company hasn't responded on the next step. Trading has been suspended which immediately drove the bitcoin price down below 500 USD (history repeats itself over and over again. When an exchange goes offline, we sell out as faith in bitcoin is what drives the demand.

    FX4BTC Update:
    I am having a difficult time using this brokerage(simplefx) for trading bitcoin because of the 2 USD spread with 2 USD daily rollover. If my targets can't be reached, I find myself having to offset the losses from the carry with FX trading. This account(brokage) was primarily for hedging bitcoin with occasional manual trading.

    I'll have to move to a different broker for my bitcoin hedging (won't be MT4 support unless fxchoice can work out for me). I'll continue to share my FX trading via myfxbook and Bitcoin analysis on TradingView and inside my trading room -

    Last edited by HedgeBitcoin; 06-25-2018, 09:40 AM.

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  • HedgeBitcoin
    started a topic FX4BTC Signal

    FX4BTC Signal

    Trading with a Bitcoin denominated Account instead of Currency Explained.

    1.0 Bitcoin equals 1,000,000 bits.
    My accounts shows 150,000 bits and equals 0.15 bitcoin.
    The price of bitcoin today is 680 USD and 0.15 bitcoin would be about $102 USD (account is too small for trading)

    My balance is small today because I withdrawal my profits when bitcoin is going up ( I convert my bitcoin into a currency to maximize my profits). I continue to trade
    with the remaining amount and continue to remove profits when I see bitcoin at its highs. When bitcoin starts to sell off ( bearish trend), I trade BTCUSD short(sell) to hedge my existing portfolio value. My account is denominated in bitcoin and not a currency. I don't gain anything in terms of profits by hedging.

    If the price drops 50$, I make $50 from the short position, but I also lose $50 in terms of USD value since bitcoin is trading at a lower price. However, once I close the position i have more bitcoin in my account. I choose when to sell my bitcoin and I'll wait for a higher price before I convert my bitcoin back into
    a currency. Bitcoin has been an aggressive bull rally for the past 2 months and now I'm sitting on a lot of fiat currency ready to recharge my trading account when bitcoin drops in value ( when will this happen? No one knows exactly but selloffs are very fast volatile markets when they move).

    Since this account provide signals, I won't add funds while in positions, but I may withdrawal while in positions. I would recommend all followers to use a Lot Multiplier instead of using the Account balance to determine the lotsize for your account. These are the basics for determining your lotsize for account balance.

    Money Management

    0.01 lot per every $4,000 USD - (Worse Case Scenario you lose 25% investment)

    0.01 lot per every $2,000 USD - (Worse Case Scenario you lose 50% investment)

    0.01 lot per every $1000 USD - (Worse Case Scenario we lose our investment)

    My Strategy

    I trade Forex normally through the Week and Bitcoin sometimes on the weekends. I often watch the bitcoin market daily and if I see very high reward trades I will place them accordingly. If you look closely at my performance you will see that I let the winners run for a very long time and having a Positive Equity > Balance are common. These characteristics are often difficult to achieve. I can achieve this by following simple rules of letting the winners run into large amounts of profit before another position is entered. If the second positions goes against me, I often close both trades at a Breakeven or still at a healthy profit in basket terms
    ( some other trades will just be closed because the profitable ones are losing their momentum.).

    You can see that I had a floating gain of near 40%+ and since I had such a positive floating equity I started to trade some other asset classes solely on a fundamental basis ( shorting ETHUSD: we can talk about this some other time as its Crypto Talk that most people know little about.) . Trading from a fundamental view is an entirely different type of strategy that takes time to play out. For example You can think of how a central bank interest rates rumors(forecast) can send a currency into a new trend for several weeks or even months at a time. Fundamentals are truly the driving for most price action but it happens at a much slower pace. Since trading fundamentals take a lot of time to play out my AUDJPY profits were declining and my positions on ETHUSD needed another few weeks to play out I had no choice but to close all my positions once my floating equity disappeared.


    What I like about my trading style the most is the High Returns, High probability, and High Reward for the occasional risk we take to earn a profit. However, Forex can be extremely risky as everyone knows especially when you are overleveraged by using a tiny account balance or using more leverage than you should. Brokers give us huge amounts of leverage for us to decide how much risk we're willing to take and managing that risk has to be done by the trader because neither the platform(MT4) or the broker has any interest of protecting your assets. The high leverage that brokers offer us are solely for us to use it for placing positions larger than we should be using. Ultimately, it is our choice how we use this leverage.

    Trading in the zone... or not!

    I added one of my accounts to the backoffice to see my ranking and it was just pure luck that the account had some screwy stats that placed it into the top 3. It was rather exciting for me to see this and I spent most of my time that day writing the descriptions and trying to explain the bitcoin denominated account.

    Since bitcoin is a tech bazaar with only 1 brokerage offering these bitcoin denominated accounts I wanted to explain why I am using this instead of fiat currency, the advantage of using these account types, how I use hedging to offset portfolio risk, and how I plan to use these accounts to maximize my bitcoin holding while still making profit trading Forex. The followers would be able to follow along with any account currency type in regards to using the trade copier.

    However some small adjusting such as using the Lot multiplier instead of the Account Balance setting would be required by the followers. This does make it a little harder to follow along since you'll need to calculate what lotsize is safe for trading on your account.

    Proper account balance size is very important when following a signal provider. It is always best to have the same amount as the signal provider by default but highly recommended to trade with 2 times the account balance of the SP because this would allow a reduction in your risk setting if you choose to.

    Trading with a bitcoin denominated account does has its risk since the value of bitcoin is highly volatile and we can have 50% appreciation/depreciation within a 30 day period and daily swings of 5% up to 10% are likely.

    The Denominated Bitcoin account as a master account requires extra explanation and much confusion for most people. It will probably be best to offer a service that everyone is already familiar with and that would include using a Fiat Currency ( USD, AUD, EUR, GBP, JPY) for the account balance.
    Last edited by HedgeBitcoin; 06-25-2018, 09:40 AM.