Crypto trading caveats advice for a newbie

New
klXR86

New

klXR86
Nov 17, 2021 20 Comments

I never traded crypto before but I heard BTC was going to end high this year so I bought BTC with 5x leverage on Kraken. Are there any caveats I should look out for?

Auto liquidate if margin level falls too low
Market conditions don't allow you to liquidate before the crash
Hackers?
Hidden terms and conditions
Taxes
Misleading information

Appreciate any advice :)
#blockchain #bitcoin #crypto #investing #kraken #BTC #advice

comments

Want to comment? LOG IN or SIGN UP
TOP 20 Comments
  • Microsoft / Cust. Srv.
    CRYPT0KING

    Go to company page Microsoft Cust. Srv.

    BIO
    godlike
    CRYPT0KING
    "Never traded crypto before"

    "I heard BTC was going to end high this year so I bought BTC with 5x leverage"

    What an idiot

    "Are there any caveats I should look out for?"

    Yeah, how about the fact that the whales are literally manufacturing price action to liquidate noob positions like yours. That's what we just saw a couple of days ago.

    Don't use leverage if you're new. Don't be greedy. You're taking a huge amount of risk to make it this late in the bull run. Just buy spot and be happy with 2-3x gains. You're asking to get rekt.

    This is financial advice. Sell your position and convert to spot
    Nov 17, 2021 2
  • Google
    spin-cycle

    Go to company page Google

    spin-cycle
    Leveraged longs being squeezed out in this 20% correction

    Edit - ambitious bulls like op pick up several long positions with leverage. Then, a small price decrease triggers an avalanche of stop losses to cover.
    If you don't understand these comments, you're not fit to be taking leverage. That's why Kraken warns you when you first start leverage trading. You wrongly agreed to be a high net individual with an excess of 10m.
    Nov 17, 2021 3
    • Google
      lightblack

      Go to company page Google

      lightblack
      The bear has eaten the leverage that the bull had put to his curve. Look out for a decrease in delta and enter a position before the implied volatility picks up. And of course remember to squeeze the gamma to the left if the market closes on a cup shaped V² curve. All the best!
      Nov 17, 2021
    • New
      klXR86

      New

      klXR86
      OP
      ok im putting in lots of sandbags to avoid auto liquidation, see you guys on the other side
      Nov 17, 2021
  • Google
    ☀️dar

    Go to company page Google

    ☀️dar
    Ignore the noise. I heard BTC going to 300k by September. Ignore the noise. Do not trade in Bull Market. Do not leverage. Take profits.
    Nov 17, 2021 0
  • I wouldn’t be taking any leveraged positions until the market settles down a bit. Particularly if you’re a new trader. Market is super choppy right now and TA is going to be relatively unreliable. If you’re currently up, I would consider taking profit soon and closing most or all of that 5x position. And definitely set a stop loss asap if you haven’t already. To answer your questions:
    - Yes, you will definitely get auto liquidated if your debt ratio exceeds the exchange’s limit (97% for KuCoin, not sure what it is for Kraken). You should be setting stop losses that keep you from getting close to that.
    - Market conditions wouldn’t prevent you from getting liquidated before/during a crash; quite the opposite actually. If you are asking if market conditions would prevent your sell orders (or buy orders if you’re short) from executing during periods of high volatility, the answer is: possible, but very unlikely if you are setting appropriate SLs, and even less likely if you are only trading BTC and ETH (which have very dense order books)
    - Hackers probably aren’t much of an issue/risk with more reputable exchanges (I think Kraken is one of the largest, and presumably most secure, exchanges). Scammers and market manipulation are more of a concern in this space.
    - Taxes. You’ll definitely have to do your research on this topic. Way too much to summarize here. One word of caution - just swapping one crypto for another (e.g., trading BTC for USDT) can trigger taxable gains; you don’t need to sell for USD to realize a gain/loss.
    - Misleading information? Yes. Everywhere.
    Nov 17, 2021 1
    • New
      klXR86

      New

      klXR86
      OP
      Thank you so much!
      Nov 17, 2021
  • New
    sv2189

    New

    sv2189
    5x leverage = 15% below current level liquidation. I hope you’d be ok to lose your money if you don’t make it. Always be careful with leverage
    Nov 17, 2021 0