What Is Yield Farming and Why You Should Farm DGTX on Uniswap? 1

What Is Yield Farming and Why You Should Farm DGTX on Uniswap?

Digitex
• Digitex
May 11, 2021

Besides day trading, there are numerous other ways to earn crypto.

One of them is yield farming, which is a popular activity in the fast-growing decentralized finance (DeFi) industry.

It usually involves more risks than usual, yet yield farming allows DeFi users to maximize their gains while earning interest on their crypto holdings.

In this article, we will introduce you to yield farming as well as show how you can use this strategy to earn DGTX rewards on Uniswap.

Let’s dive in!

What Is Yield Farming?

Yield farming is a popular strategy in the DeFi space to earn some crypto on your digital asset holdings.

However, unlike lending stablecoins to others on a centralized platform, yield farming is considered a high-risk activity, as users often utilize multiple cryptocurrencies as well as complex processes and mechanisms throughout various platforms and protocols to maximize their earnings.

An example strategy includes depositing ETH via MakerDAO (Oasis) to open a vault and receive the stablecoin DAI.

After that, you utilize the lending protocol Compound Finance to lend the DAI to others. In exchange for providing liquidity, you receive cDAI tokens from Compound, representing the number of coins you have contributed to the pool.

As the next step, you move your cDAI to another platform to either stake your coins or lend them through other protocols. Alternatively, you could use your cDAI tokens to borrow funds against your digital assets to (re)invest those via other solutions.

As you can see in the example above, the average yield farming strategy is rather complex and involves higher risks than simply lending or staking coins on a single DeFi protocol. However, at the same time, yield farming often generates more potential rewards for users.

How to Earn DGTX Rewards With Yield Farming on Uniswap?

If you are looking to generate a passive income on your crypto, you can yield farm DGTX, the next-generation digital asset exchange Digitex’s native token, on the Uniswap DEX. Each month, five million DGTX is added into the pool rewards program. 

At the time of writing this article, that’s valued at $65,000 in rewards each month, which is nearly 86.45% annual percentage yield (APY) by supplying liquidity for the DGTX/ETH trading pair on Uniswap.

On top of that, if you contribute your tokens for at least 30 days to Uniswap’s DGTX pool, your rewards are multiplied by three times to maximize your gains.

Sounds great, huh?

You can get started easily with yield farming DGTX in three simple steps:

  1. Deposit an equal amount of ETH and DGTX to Uniswap V2 to provide liquidity for the trading pair on the platform.
  2. In exchange for supplying liquidity, you will receive UNI-V2 tokens, which represent the tokens you have contributed to the pool.
  3. As the last step, deposit your UNI-V2 pool tokens to the Digitex Rewards platform to stake them and earn a passive income.

For more information about yield farming DGTX on Uniswap, we recommend checking out the following article on the Digitex blog.

Farm DGTX to Earn Rewards on Your Crypto

Once you get to grips with utilizing complex strategies and accept taking higher risks, yield farming is an excellent way to maximize your earnings and generate a passive income on your cryptocurrency holdings throughout multiple DeFi protocols.

For that reason, yield farming DGTX allows Digitex users to make some extra money on their coins while day trading crypto.

Are you ready to maximize your gains by farming DGTX on Uniswap?

Head to the Digitex Rewards platform to get started!

In the meantime, if you haven’t already, we highly recommend creating an account at Digitex to enjoy a zero-fee cryptocurrency trading experience on both the spot and futures trading markets.

May 11, 2021
Digitex

What Is Yield Farming and Why You Should Farm DGTX on Uniswap?

Digitex
What Is Yield Farming and Why You Should Farm DGTX on Uniswap? 2

Besides day trading, there are numerous other ways to earn crypto.

One of them is yield farming, which is a popular activity in the fast-growing decentralized finance (DeFi) industry.

It usually involves more risks than usual, yet yield farming allows DeFi users to maximize their gains while earning interest on their crypto holdings.

In this article, we will introduce you to yield farming as well as show how you can use this strategy to earn DGTX rewards on Uniswap.

Let’s dive in!

What Is Yield Farming?

Yield farming is a popular strategy in the DeFi space to earn some crypto on your digital asset holdings.

However, unlike lending stablecoins to others on a centralized platform, yield farming is considered a high-risk activity, as users often utilize multiple cryptocurrencies as well as complex processes and mechanisms throughout various platforms and protocols to maximize their earnings.

An example strategy includes depositing ETH via MakerDAO (Oasis) to open a vault and receive the stablecoin DAI.

After that, you utilize the lending protocol Compound Finance to lend the DAI to others. In exchange for providing liquidity, you receive cDAI tokens from Compound, representing the number of coins you have contributed to the pool.

As the next step, you move your cDAI to another platform to either stake your coins or lend them through other protocols. Alternatively, you could use your cDAI tokens to borrow funds against your digital assets to (re)invest those via other solutions.

As you can see in the example above, the average yield farming strategy is rather complex and involves higher risks than simply lending or staking coins on a single DeFi protocol. However, at the same time, yield farming often generates more potential rewards for users.

How to Earn DGTX Rewards With Yield Farming on Uniswap?

If you are looking to generate a passive income on your crypto, you can yield farm DGTX, the next-generation digital asset exchange Digitex’s native token, on the Uniswap DEX. Each month, five million DGTX is added into the pool rewards program. 

At the time of writing this article, that’s valued at $65,000 in rewards each month, which is nearly 86.45% annual percentage yield (APY) by supplying liquidity for the DGTX/ETH trading pair on Uniswap.

On top of that, if you contribute your tokens for at least 30 days to Uniswap’s DGTX pool, your rewards are multiplied by three times to maximize your gains.

Sounds great, huh?

You can get started easily with yield farming DGTX in three simple steps:

  1. Deposit an equal amount of ETH and DGTX to Uniswap V2 to provide liquidity for the trading pair on the platform.
  2. In exchange for supplying liquidity, you will receive UNI-V2 tokens, which represent the tokens you have contributed to the pool.
  3. As the last step, deposit your UNI-V2 pool tokens to the Digitex Rewards platform to stake them and earn a passive income.

For more information about yield farming DGTX on Uniswap, we recommend checking out the following article on the Digitex blog.

Farm DGTX to Earn Rewards on Your Crypto

Once you get to grips with utilizing complex strategies and accept taking higher risks, yield farming is an excellent way to maximize your earnings and generate a passive income on your cryptocurrency holdings throughout multiple DeFi protocols.

For that reason, yield farming DGTX allows Digitex users to make some extra money on their coins while day trading crypto.

Are you ready to maximize your gains by farming DGTX on Uniswap?

Head to the Digitex Rewards platform to get started!

In the meantime, if you haven’t already, we highly recommend creating an account at Digitex to enjoy a zero-fee cryptocurrency trading experience on both the spot and futures trading markets.

Latest News

Should You Invest in a Bitcoin ETF? 3

Should You Invest in a Bitcoin ETF?

Digitex Futures
Digitex
• Dave Reiter
April 22, 2021

The global investment community was introduced to exchange-traded funds (ETFs) on January 22, 1993, when State Street Global Advisors launched the SPDR S&P 500 ETF. It was designed to track the daily performance of the S&P 500 stock index. The State Street ETF immediately became a popular product among individual and institutional investors because it provided a low-cost approach to portfolio diversification.

Today, 28 years after its launch date, SPY remains one of the most heavily traded investment vehicles within the global financial services industry. It’s not uncommon for daily volume to exceed 100 million shares.

ETFs Gain Popularity Following the Dotcom Crash

During the past three decades, ETFs have exploded in popularity. However, they certainly did not become an overnight sensation. For the first 10 years of their existence, investors basically ignored ETFs because the industry did a poor job of marketing their products and communicating the benefits of owning exchange-traded funds.

Despite the fact that stocks had experienced a roaring bull market throughout the decade of the 1990s, most investors lost money by aggressively speculating in the “high flying” internet stocks. Therefore, by the early-2000s, investors were searching for a low-cost, diversified method for participating in the stock market. ETFs were the perfect solution.

In 2003, the size of the global ETF industry was USD $204.3 billion. Investments in ETFs have exploded during the past 18 years. In fact, with the exception of 2008, the value of exchange-traded funds has increased every year since 2003. In 2010, the ETF asset class reached its first major milestone by exceeding USD $1 trillion in market capitalization.

As you can see from the following table, investors have been pouring money into ETFs during the past decade. In fact, since 2010, the asset class has expanded by 489%. By 2023, the global market capitalization of exchange-traded funds is projected to be USD $12.0 trillion, making it one of the fastest-growing investment vehicles of all time. These numbers are based on data provided by Statista.

  • 2010 – USD $1.313 trillion
  • 2013 – USD $2.283 trillion
  • 2015 – USD $3.423 trillion
  • 2017 – USD $4.690 trillion
  • 2019 – USD $6.194 trillion
  • 2020 – USD $7.736 trillion

ETFs Viewed Through the Lens of Technological Innovation

For the past several decades, the financial services industry has been constantly criticized for its lack of innovation, particularly as it relates to technology. The industry has always been behind the curve in regard to technological innovation. In fact, technology improvements were practically non-existent for the majority of the 20th century.

However, in 1992, one of the most disruptive innovations in the history of financial services was unveiled when E*Trade introduced online trading. This new financial technology introduced millions of first-time traders to the stock market. For example, in 1995, only 300,000 investors in the United States had an online brokerage account. Five years later, in 2000, 11.3 million traders were participating in online trading. This represents a dramatic increase of 3,667%.

Is it simply a coincidence that exchange-traded funds were introduced to the investing public at precisely the same time as online trading? The short answer is, “no.” It’s not uncommon for innovative solutions to arrive in waves or clusters. An important new discovery (like online trading) usually lays the groundwork for other innovators to roll out new trailblazing technology (like ETFs).

In terms of its impact on the financial services industry, ETFs will go down in the history books as one of the most disruptive forces in comparison to other major industry groups. Please review the following list taken from data provided by the U.S. Census Bureau, Statista, BlackRock, and the International Federation of Robotics.

Annual Technology Adoption Rate Since 2009 (CAGR):

  • Smartphones – 24.3%
  • ETFs – 18.0%
  • Social media – 13.0%
  • Retail sales via e-commerce – 11.8%
  • Industrial robots – 10.9%

When most people view this list for the first time, they are shocked to discover how impactful ETFs have been on the financial services industry compared to major innovations across other industry groups. Exchange-traded funds have easily been one of the most disruptive forces of the past 50 years.

Two Disruptive Technologies Join Forces: Bitcoin and ETFs

Bitcoin was launched by Satoshi Nakamoto on January 3, 2009. The early years of Bitcoin (BTC) were very similar to exchange-traded funds. Investors were not the least bit interested in learning about the benefits of owning BTC, which is exactly the same type of reception received by ETFs. It’s not uncommon for people to ignore new discoveries, particularly technological discoveries.

As a general rule, people prefer to avoid disruptive innovations because they don’t like daily changes to their routine. This explains why it takes several years for some of the best discoveries to reach mainstream adoption.

As we previously mentioned, ETFs exploded in popularity beginning in the early-2000s, as investors discovered the benefits of owning exchange-traded funds. It took 17 years for ETFs to reach USD $1 trillion in market capitalization. Bitcoin achieved the same level in 12 years. In fact, BTC became the fastest asset class to reach USD $1 trillion in market capitalization. Most likely, Bitcoin will eventually exceed the asset level of ETFs, which currently stands at approximately USD $8 trillion.

During the past few years, several investment firms have attempted to gain regulatory approval for a Bitcoin ETF. In the United States, the Securities and Exchange Commission (SEC) has not yet approved any Bitcoin ETF application.

However, Canadian regulators provided clearance to Purpose Investments Inc by allowing the investment company to become the world’s first Bitcoin ETF. The official launch date was February 18, 2021. Although the Bitcoin ETF has only been in existence for two months, it has attracted a substantial number of new investors. Recently, Purpose Investments announced that its Bitcoin ETF exceeded USD $1 billion of assets under management. Most likely, this trend will continue as United States investors patiently wait for the SEC to approve a Bitcoin ETF.

Why are Bitcoin ETFs so highly anticipated within the global investment community? Because both of these innovative products provide investors with an opportunity to own a completely new asset class by using a low-cost vehicle like an ETF. Let’s briefly review a few of the main features and characteristics of an ETF.

Low cost

In comparison to mutual funds, exchange-traded funds are much cheaper in terms of the fees investors are required to pay. For example, a typical mutual fund charges a wide variety of fees. The list includes management fees, 12b-1 fee, administrative fees, operating fees, trading fees, auditing fees, and legal fees. The list of fees is endless.

All of these mutual fund fees are added together to create an expense ratio, which represents the total cost paid by the investor to own shares of the mutual fund. It’s not uncommon for investors to pay 1.5% to 2.0% annually. The fees are even higher if the investor uses a financial advisor.

ETFs offer some of the lowest fees in the financial services industry. The average annual ETF fee is 0.4%. Many exchange-traded funds are lower than 0.4%. In fact, many ETFs to charge less than 0.1%. This explains why investors have moved a substantial portion of their investment dollars into ETFs during the past 20 years.

Liquidity

As we previously discussed, the dollar value of ETFs has increased substantially during the past decade. The current value of assets invested in ETFs is approximately USD $8 trillion. This provides investors with a tremendous amount of liquidity to buy and sell without affecting the price of the underlying ETF. The bid/ask spread for the average ETF is very tight because of liquidity.

Accessibility

Exchange-traded funds are available on many stock exchanges across the world. ETFs trade in the same format as stocks. They are quoted on a per share basis and can be bought or sold throughout each trading day. In terms of user experience, trading an ETF is exactly the same as trading a stock.

Transparency

Over the course of the past 20 years, the financial services industry has introduced a wide variety of new investment products to the global investment community. The majority of these products were released prior to the 2008 Global Financial Crisis.

Unfortunately, many individual investors, large institutions, and public pension plans found themselves locked in these opaque and highly complex investment products. When the financial markets began to unravel in late-2008, it became impossible for investors to liquidate their positions. Of course, this only exacerbated the financial crisis.

The financial crisis taught many investors to avoid highly sophisticated investments. This explains why there has been a large increase in ETF activity since 2009. ETFs are one of the most transparent investment products within the financial services industry because ETF providers openly communicate important information to investors in terms of how these products are structured. Consequently, investors have a much better experience participating in ETFs compared to other financial products.

Diversification

Exchange-traded funds are an excellent choice for investors who are attempting to diversify their portfolios. Unlike individual stocks or bonds, ETFs provide investors with the opportunity to select various sectors, industry groups, and geographic locations.

As of 2020, the total number of listed ETFs in the United States was 2,445. Investors can select from a number of different categories: stocks, bonds, commodities, currencies, real estate, and alternative assets. These various categories provide investors with a tremendous amount of diversification. This data is provided by ETF Database.

As you can see, exchange-traded funds provide investors with several excellent features. These features and characteristics are the main reason why investors find Bitcoin ETFs so attractive. It will be a low-cost way for investors to gain exposure to BTC. Due to regulatory constraints, many investors have been unable to purchase BTC through a traditional brokerage account. Therefore, Bitcoin ETFs will allow these investors to purchase BTC for the first time.

GBTC Is Not a Bitcoin ETF

In September 2013, Grayscale Investments launched the Grayscale Bitcoin Trust, which allowed accredited investors to gain exposure to BTC through a private placement offering. The minimum investment was USD $50,000. While this product is still actively managed, it is no longer accepting new investors.

In May 2015, Grayscale received approval from the Financial Industry Regulatory Authority (FINRA) to allow shares of the Grayscale Bitcoin Trust to trade publicly on the over-the-counter (OTC) market, using the ticker symbol GBTC. This allowed individual investors to buy and sell shares of GBTC through a traditional brokerage account.

During the past six years, GBTC has become an incredibly popular product within the Bitcoin community. Prior to the launch of Purpose Investments’ Bitcoin ETF in February, GBTC was the only way to invest in Bitcoin without purchasing BTC through a crypto brokerage account. GBTC exploded in popularity during the 2017 BTC bull market. In late-2020, GBTC experienced another wave of new money, as Bitcoin enjoyed a dramatic rally. As of March 31, GBTC has USD $45.6 billion of assets under management, making it one of the most popular investment products within the financial services industry.

Despite its popularity, many investors are under the impression that GBTC is an ETF. This is not true. Even though it trades on a regulated exchange like other ETFs, GBTC is officially an exchange-traded note (ETN). Essentially, an ETN is an unsecured debt instrument issued by a financial institution. In the case of GBTC, Grayscale Investments created the Grayscale Bitcoin Trust for the purpose of issuing the ETN.

Exchange-traded notes are designed to track an underlying index or security. In terms of GBTC, the underlying security is Bitcoin. When an investor buys GBTC, Grayscale purchases an equal amount of Bitcoin. The investor does not own the BTC. Instead, the BTC is held by Grayscale in the name of the trust.

Grayscale Bitcoin Trust was legally established as an investment trust, which means that the trust is a closed-end fund. The distinguishing characteristic of a closed-end fund is that it issues a limited number of shares when a new product is launched, like the Grayscale Bitcoin Trust. Therefore, GBTC has a limited number of shares that trade on the OTC exchange. These shares can trade at a discount or a premium to the underlying security, which is Bitcoin.

Consequently, it’s not uncommon for the share price of GBTC to trade in the opposite direction of Bitcoin. There are days when the price of Bitcoin rises while the share price of GBTC declines.

ETFs are a much better product because they are not structured like GBTC. Additionally, ETF fees are substantially lower compared to ETN fees. For example, the annual management fee for GBTC is 2.0%. As you know from our previous discussions, the average ETF fee is substantially lower than 2.0%.

Overall, a Bitcoin ETF is a much better product than GBTC. This explains why many investors are waiting to invest in Bitcoin until an ETF is launched in the United States. Most likely, Bitcoin ETFs will go down in the history books as one of the greatest investment products of the 21st century.

Digitex writers and/or guest authors may or may not have a vested interest in the Digitex project and/or other businesses mentioned throughout the site. None of the content on Digitex is investment advice nor is it a replacement for advice from a certified financial planner.

April 22, 2021
Digitex Futures
Digitex

Should You Invest in a Bitcoin ETF?

Dave Reiter
Should You Invest in a Bitcoin ETF? 4

The global investment community was introduced to exchange-traded funds (ETFs) on January 22, 1993, when State Street Global Advisors launched the SPDR S&P 500 ETF. It was designed to track the daily performance of the S&P 500 stock index. The State Street ETF immediately became a popular product among individual and institutional investors because it provided a low-cost approach to portfolio diversification.

Today, 28 years after its launch date, SPY remains one of the most heavily traded investment vehicles within the global financial services industry. It’s not uncommon for daily volume to exceed 100 million shares.

ETFs Gain Popularity Following the Dotcom Crash

During the past three decades, ETFs have exploded in popularity. However, they certainly did not become an overnight sensation. For the first 10 years of their existence, investors basically ignored ETFs because the industry did a poor job of marketing their products and communicating the benefits of owning exchange-traded funds.

Despite the fact that stocks had experienced a roaring bull market throughout the decade of the 1990s, most investors lost money by aggressively speculating in the “high flying” internet stocks. Therefore, by the early-2000s, investors were searching for a low-cost, diversified method for participating in the stock market. ETFs were the perfect solution.

In 2003, the size of the global ETF industry was USD $204.3 billion. Investments in ETFs have exploded during the past 18 years. In fact, with the exception of 2008, the value of exchange-traded funds has increased every year since 2003. In 2010, the ETF asset class reached its first major milestone by exceeding USD $1 trillion in market capitalization.

As you can see from the following table, investors have been pouring money into ETFs during the past decade. In fact, since 2010, the asset class has expanded by 489%. By 2023, the global market capitalization of exchange-traded funds is projected to be USD $12.0 trillion, making it one of the fastest-growing investment vehicles of all time. These numbers are based on data provided by Statista.

  • 2010 – USD $1.313 trillion
  • 2013 – USD $2.283 trillion
  • 2015 – USD $3.423 trillion
  • 2017 – USD $4.690 trillion
  • 2019 – USD $6.194 trillion
  • 2020 – USD $7.736 trillion

ETFs Viewed Through the Lens of Technological Innovation

For the past several decades, the financial services industry has been constantly criticized for its lack of innovation, particularly as it relates to technology. The industry has always been behind the curve in regard to technological innovation. In fact, technology improvements were practically non-existent for the majority of the 20th century.

However, in 1992, one of the most disruptive innovations in the history of financial services was unveiled when E*Trade introduced online trading. This new financial technology introduced millions of first-time traders to the stock market. For example, in 1995, only 300,000 investors in the United States had an online brokerage account. Five years later, in 2000, 11.3 million traders were participating in online trading. This represents a dramatic increase of 3,667%.

Is it simply a coincidence that exchange-traded funds were introduced to the investing public at precisely the same time as online trading? The short answer is, “no.” It’s not uncommon for innovative solutions to arrive in waves or clusters. An important new discovery (like online trading) usually lays the groundwork for other innovators to roll out new trailblazing technology (like ETFs).

In terms of its impact on the financial services industry, ETFs will go down in the history books as one of the most disruptive forces in comparison to other major industry groups. Please review the following list taken from data provided by the U.S. Census Bureau, Statista, BlackRock, and the International Federation of Robotics.

Annual Technology Adoption Rate Since 2009 (CAGR):

  • Smartphones – 24.3%
  • ETFs – 18.0%
  • Social media – 13.0%
  • Retail sales via e-commerce – 11.8%
  • Industrial robots – 10.9%

When most people view this list for the first time, they are shocked to discover how impactful ETFs have been on the financial services industry compared to major innovations across other industry groups. Exchange-traded funds have easily been one of the most disruptive forces of the past 50 years.

Two Disruptive Technologies Join Forces: Bitcoin and ETFs

Bitcoin was launched by Satoshi Nakamoto on January 3, 2009. The early years of Bitcoin (BTC) were very similar to exchange-traded funds. Investors were not the least bit interested in learning about the benefits of owning BTC, which is exactly the same type of reception received by ETFs. It’s not uncommon for people to ignore new discoveries, particularly technological discoveries.

As a general rule, people prefer to avoid disruptive innovations because they don’t like daily changes to their routine. This explains why it takes several years for some of the best discoveries to reach mainstream adoption.

As we previously mentioned, ETFs exploded in popularity beginning in the early-2000s, as investors discovered the benefits of owning exchange-traded funds. It took 17 years for ETFs to reach USD $1 trillion in market capitalization. Bitcoin achieved the same level in 12 years. In fact, BTC became the fastest asset class to reach USD $1 trillion in market capitalization. Most likely, Bitcoin will eventually exceed the asset level of ETFs, which currently stands at approximately USD $8 trillion.

During the past few years, several investment firms have attempted to gain regulatory approval for a Bitcoin ETF. In the United States, the Securities and Exchange Commission (SEC) has not yet approved any Bitcoin ETF application.

However, Canadian regulators provided clearance to Purpose Investments Inc by allowing the investment company to become the world’s first Bitcoin ETF. The official launch date was February 18, 2021. Although the Bitcoin ETF has only been in existence for two months, it has attracted a substantial number of new investors. Recently, Purpose Investments announced that its Bitcoin ETF exceeded USD $1 billion of assets under management. Most likely, this trend will continue as United States investors patiently wait for the SEC to approve a Bitcoin ETF.

Why are Bitcoin ETFs so highly anticipated within the global investment community? Because both of these innovative products provide investors with an opportunity to own a completely new asset class by using a low-cost vehicle like an ETF. Let’s briefly review a few of the main features and characteristics of an ETF.

Low cost

In comparison to mutual funds, exchange-traded funds are much cheaper in terms of the fees investors are required to pay. For example, a typical mutual fund charges a wide variety of fees. The list includes management fees, 12b-1 fee, administrative fees, operating fees, trading fees, auditing fees, and legal fees. The list of fees is endless.

All of these mutual fund fees are added together to create an expense ratio, which represents the total cost paid by the investor to own shares of the mutual fund. It’s not uncommon for investors to pay 1.5% to 2.0% annually. The fees are even higher if the investor uses a financial advisor.

ETFs offer some of the lowest fees in the financial services industry. The average annual ETF fee is 0.4%. Many exchange-traded funds are lower than 0.4%. In fact, many ETFs to charge less than 0.1%. This explains why investors have moved a substantial portion of their investment dollars into ETFs during the past 20 years.

Liquidity

As we previously discussed, the dollar value of ETFs has increased substantially during the past decade. The current value of assets invested in ETFs is approximately USD $8 trillion. This provides investors with a tremendous amount of liquidity to buy and sell without affecting the price of the underlying ETF. The bid/ask spread for the average ETF is very tight because of liquidity.

Accessibility

Exchange-traded funds are available on many stock exchanges across the world. ETFs trade in the same format as stocks. They are quoted on a per share basis and can be bought or sold throughout each trading day. In terms of user experience, trading an ETF is exactly the same as trading a stock.

Transparency

Over the course of the past 20 years, the financial services industry has introduced a wide variety of new investment products to the global investment community. The majority of these products were released prior to the 2008 Global Financial Crisis.

Unfortunately, many individual investors, large institutions, and public pension plans found themselves locked in these opaque and highly complex investment products. When the financial markets began to unravel in late-2008, it became impossible for investors to liquidate their positions. Of course, this only exacerbated the financial crisis.

The financial crisis taught many investors to avoid highly sophisticated investments. This explains why there has been a large increase in ETF activity since 2009. ETFs are one of the most transparent investment products within the financial services industry because ETF providers openly communicate important information to investors in terms of how these products are structured. Consequently, investors have a much better experience participating in ETFs compared to other financial products.

Diversification

Exchange-traded funds are an excellent choice for investors who are attempting to diversify their portfolios. Unlike individual stocks or bonds, ETFs provide investors with the opportunity to select various sectors, industry groups, and geographic locations.

As of 2020, the total number of listed ETFs in the United States was 2,445. Investors can select from a number of different categories: stocks, bonds, commodities, currencies, real estate, and alternative assets. These various categories provide investors with a tremendous amount of diversification. This data is provided by ETF Database.

As you can see, exchange-traded funds provide investors with several excellent features. These features and characteristics are the main reason why investors find Bitcoin ETFs so attractive. It will be a low-cost way for investors to gain exposure to BTC. Due to regulatory constraints, many investors have been unable to purchase BTC through a traditional brokerage account. Therefore, Bitcoin ETFs will allow these investors to purchase BTC for the first time.

GBTC Is Not a Bitcoin ETF

In September 2013, Grayscale Investments launched the Grayscale Bitcoin Trust, which allowed accredited investors to gain exposure to BTC through a private placement offering. The minimum investment was USD $50,000. While this product is still actively managed, it is no longer accepting new investors.

In May 2015, Grayscale received approval from the Financial Industry Regulatory Authority (FINRA) to allow shares of the Grayscale Bitcoin Trust to trade publicly on the over-the-counter (OTC) market, using the ticker symbol GBTC. This allowed individual investors to buy and sell shares of GBTC through a traditional brokerage account.

During the past six years, GBTC has become an incredibly popular product within the Bitcoin community. Prior to the launch of Purpose Investments’ Bitcoin ETF in February, GBTC was the only way to invest in Bitcoin without purchasing BTC through a crypto brokerage account. GBTC exploded in popularity during the 2017 BTC bull market. In late-2020, GBTC experienced another wave of new money, as Bitcoin enjoyed a dramatic rally. As of March 31, GBTC has USD $45.6 billion of assets under management, making it one of the most popular investment products within the financial services industry.

Despite its popularity, many investors are under the impression that GBTC is an ETF. This is not true. Even though it trades on a regulated exchange like other ETFs, GBTC is officially an exchange-traded note (ETN). Essentially, an ETN is an unsecured debt instrument issued by a financial institution. In the case of GBTC, Grayscale Investments created the Grayscale Bitcoin Trust for the purpose of issuing the ETN.

Exchange-traded notes are designed to track an underlying index or security. In terms of GBTC, the underlying security is Bitcoin. When an investor buys GBTC, Grayscale purchases an equal amount of Bitcoin. The investor does not own the BTC. Instead, the BTC is held by Grayscale in the name of the trust.

Grayscale Bitcoin Trust was legally established as an investment trust, which means that the trust is a closed-end fund. The distinguishing characteristic of a closed-end fund is that it issues a limited number of shares when a new product is launched, like the Grayscale Bitcoin Trust. Therefore, GBTC has a limited number of shares that trade on the OTC exchange. These shares can trade at a discount or a premium to the underlying security, which is Bitcoin.

Consequently, it’s not uncommon for the share price of GBTC to trade in the opposite direction of Bitcoin. There are days when the price of Bitcoin rises while the share price of GBTC declines.

ETFs are a much better product because they are not structured like GBTC. Additionally, ETF fees are substantially lower compared to ETN fees. For example, the annual management fee for GBTC is 2.0%. As you know from our previous discussions, the average ETF fee is substantially lower than 2.0%.

Overall, a Bitcoin ETF is a much better product than GBTC. This explains why many investors are waiting to invest in Bitcoin until an ETF is launched in the United States. Most likely, Bitcoin ETFs will go down in the history books as one of the greatest investment products of the 21st century.

Digitex writers and/or guest authors may or may not have a vested interest in the Digitex project and/or other businesses mentioned throughout the site. None of the content on Digitex is investment advice nor is it a replacement for advice from a certified financial planner.

Latest News

digitex

Awesome Community Videos About the Digitex Platform

Digitex Futures
Trading
• Christina Comben
April 14, 2021

We’re thrilled to see the Digitex exchange gaining traction. In a raging bull market with bitcoin (BTC) and ether (ETH) making staggering gains and marking new all-time highs, there really has never been a better time to take advantage of the volatility by trading commission-free. Digitex allows you to keep all your profit and even pays you while you  trade through our Liquidity Mining program. Check out some of these awesome videos to get a better taste of the platform and find out what the community is saying.

Digitex Futures Is the Best 0% Fee Exchange of 2021

Of course, you already know how much we love our platform. But don’t just take our word for it. In this super-bullish video by Danny at UP NEXT CRYPTO, he takes a look at promising meme coin $DOGIRA and then focuses on Digitex (from 08:12), calling it “the best zero-fee exchange of 2021!” Check it out: 

Danny says Bitcoin futures trading is made so simple on Digitex thanks to zero fees, high liquidity, and a one-click interface. He also says that Digitex is one of the most beautiful platforms he has ever seen for trading. “I think this is going to be my daily use platform for trading,” he enthuses. 

He focuses on the interface, and looks at the graphs, charts, order books, contracts, and UI that “is just so clean.” And he briefly shows us where we can see all our open positions and unmatched orders, where to set market, limit, and stop orders, and where to adjust the leverage. 

Danny explains how the exchange is powered by the DGTX token and, as such, you’ll need to own DGTX if you want to trade on the platform. “The zero fees thing is really really important. They’re saving you a lot of money by not having to pay these fees,” he adds. 

He also points out that zero fees let you execute trading strategies that you simply can’t on any other exchange; “not Huobi, not Binance, not Bybit, not BTSE… none of these huge platforms have trading with zero fees.”

Danny loves the benefits of one-click trading, saying that Digitex has “gone above and beyond” to enhance the trading experience. He also speaks about the Liquidity Mining program that pays you to trade, saying, “This is a feature I have not seen before.”

He emphasizes the importance of our “battle tested” matching engine that’s been working since 2019 and proven itself capable of handling over 22 billion contracts in 24 hours on crypto’s first trading ladder interface. 

“This has to be one of my top picks for 2021 for any platform for you guys to start trading on, the cleanest-looking cheapest platform for your trading needs.” 

How to Place Stop Loss on Digitex Futures

Next up, we have another awesome video from Digitex frequent trader CoinCollector, whose latest walkthrough of the Digitex platform we featured last week. In this short informative clip, you can see how to place a stop loss on Digitex Futures. Check it out:

Stop loss orders are extremely important when trading in volatile markets to protect yourself from heavy losses in the event of the price quickly moving against you. CoinCollector says that he has seen a few traders struggling to set up their stop loss on Digitex, even though it is “pretty straightforward.” So he walks us through the steps very simply in his video.

He gives two examples of how to do this, on a long position and on a short position. Starting with a long position, you go into a market long position and then click on “Stop Market” and click on “Sell” — this is because you will want to sell your position at some point to ensure you don’t get liquidated if the market turns bearish.

In his first example, he enters the long position at $58005. So, he will type in the sell price at $57995. He then clicks on “Set Sell Stop” and the order will be automatically  triggered once this price is reached, to get out of the position with a small loss, “saving you from a big loss.”

It’s exactly the same with a short position, except that you place a stop loss to the upside. “We want to protect ourselves if the BTC price rises too high.” To do this, we click on “Buy” and we protect ourselves to the upside. CoinCollector goes in at $57935 and wants to protect himself by buying at $57960. He clicks on “Set Buy Stop.” It’s as simple as that. The order will be triggered if the price goes against you. If you still have questions, CoinCollector says to feel free to type your comments below the video.

Fast, Zero Fees Bitcoin Futures Trading on Digitex | Full Exchange Review

Finally, if you haven’t seen long-time Digitex trader Mika’s video yet on the exchange be sure to check it out. Once again he delivers an enthusiastic and bullish review, walking through the website, the features of the exchange, the trading UI, and the fact that the spot markets are coming soon. 

He places particular focus on the amount of money you can save through our zero-fee model, especially when using leverage. The standard 0.075% quickly becomes a large percent of your profits (7.5%!) which makes short-term scalping extremely hard and even impossible on other exchanges. 

He’s very thoughtfully recorded his video in English and in Russian so you can choose the version that suits you best below.

English:

Russian: 

Thanks so much to Danny, CoinCollector, and Mika, and to all the traders who trade on the Digitex platform. We’re so happy to hear you’re loving it and we’re working to make it even better all the time. Many thanks for the amazing videos, and for all your continued support. Don’t forget that you can always let us know if you have any comments or feedback. Until then, happy trading!

April 14, 2021
Digitex Futures
Trading

Awesome Community Videos About the Digitex Platform

Christina Comben
digitex

We’re thrilled to see the Digitex exchange gaining traction. In a raging bull market with bitcoin (BTC) and ether (ETH) making staggering gains and marking new all-time highs, there really has never been a better time to take advantage of the volatility by trading commission-free. Digitex allows you to keep all your profit and even pays you while you  trade through our Liquidity Mining program. Check out some of these awesome videos to get a better taste of the platform and find out what the community is saying.

Digitex Futures Is the Best 0% Fee Exchange of 2021

Of course, you already know how much we love our platform. But don’t just take our word for it. In this super-bullish video by Danny at UP NEXT CRYPTO, he takes a look at promising meme coin $DOGIRA and then focuses on Digitex (from 08:12), calling it “the best zero-fee exchange of 2021!” Check it out: 

Danny says Bitcoin futures trading is made so simple on Digitex thanks to zero fees, high liquidity, and a one-click interface. He also says that Digitex is one of the most beautiful platforms he has ever seen for trading. “I think this is going to be my daily use platform for trading,” he enthuses. 

He focuses on the interface, and looks at the graphs, charts, order books, contracts, and UI that “is just so clean.” And he briefly shows us where we can see all our open positions and unmatched orders, where to set market, limit, and stop orders, and where to adjust the leverage. 

Danny explains how the exchange is powered by the DGTX token and, as such, you’ll need to own DGTX if you want to trade on the platform. “The zero fees thing is really really important. They’re saving you a lot of money by not having to pay these fees,” he adds. 

He also points out that zero fees let you execute trading strategies that you simply can’t on any other exchange; “not Huobi, not Binance, not Bybit, not BTSE… none of these huge platforms have trading with zero fees.”

Danny loves the benefits of one-click trading, saying that Digitex has “gone above and beyond” to enhance the trading experience. He also speaks about the Liquidity Mining program that pays you to trade, saying, “This is a feature I have not seen before.”

He emphasizes the importance of our “battle tested” matching engine that’s been working since 2019 and proven itself capable of handling over 22 billion contracts in 24 hours on crypto’s first trading ladder interface. 

“This has to be one of my top picks for 2021 for any platform for you guys to start trading on, the cleanest-looking cheapest platform for your trading needs.” 

How to Place Stop Loss on Digitex Futures

Next up, we have another awesome video from Digitex frequent trader CoinCollector, whose latest walkthrough of the Digitex platform we featured last week. In this short informative clip, you can see how to place a stop loss on Digitex Futures. Check it out:

Stop loss orders are extremely important when trading in volatile markets to protect yourself from heavy losses in the event of the price quickly moving against you. CoinCollector says that he has seen a few traders struggling to set up their stop loss on Digitex, even though it is “pretty straightforward.” So he walks us through the steps very simply in his video.

He gives two examples of how to do this, on a long position and on a short position. Starting with a long position, you go into a market long position and then click on “Stop Market” and click on “Sell” — this is because you will want to sell your position at some point to ensure you don’t get liquidated if the market turns bearish.

In his first example, he enters the long position at $58005. So, he will type in the sell price at $57995. He then clicks on “Set Sell Stop” and the order will be automatically  triggered once this price is reached, to get out of the position with a small loss, “saving you from a big loss.”

It’s exactly the same with a short position, except that you place a stop loss to the upside. “We want to protect ourselves if the BTC price rises too high.” To do this, we click on “Buy” and we protect ourselves to the upside. CoinCollector goes in at $57935 and wants to protect himself by buying at $57960. He clicks on “Set Buy Stop.” It’s as simple as that. The order will be triggered if the price goes against you. If you still have questions, CoinCollector says to feel free to type your comments below the video.

Fast, Zero Fees Bitcoin Futures Trading on Digitex | Full Exchange Review

Finally, if you haven’t seen long-time Digitex trader Mika’s video yet on the exchange be sure to check it out. Once again he delivers an enthusiastic and bullish review, walking through the website, the features of the exchange, the trading UI, and the fact that the spot markets are coming soon. 

He places particular focus on the amount of money you can save through our zero-fee model, especially when using leverage. The standard 0.075% quickly becomes a large percent of your profits (7.5%!) which makes short-term scalping extremely hard and even impossible on other exchanges. 

He’s very thoughtfully recorded his video in English and in Russian so you can choose the version that suits you best below.

English:

Russian: 

Thanks so much to Danny, CoinCollector, and Mika, and to all the traders who trade on the Digitex platform. We’re so happy to hear you’re loving it and we’re working to make it even better all the time. Many thanks for the amazing videos, and for all your continued support. Don’t forget that you can always let us know if you have any comments or feedback. Until then, happy trading!

Latest News

The Top 5 Mistakes of Beginner Crypto Traders 5

The Top 5 Mistakes of Beginner Crypto Traders

Trading
• Digitex

With an over $2 trillion size, the current cryptocurrency bull market provides great opportunities for many investors and traders.

However, as with other asset classes, crypto is not a get-rich-quick scheme in which you put your money to see over 1,000% returns a day after (it can happen, but it’s highly unlikely).

Instead, you have to research assets to pick the right ones, gather knowledge about the market, as well as create and implement a viable crypto trading strategy to succeed.

That said, many newbies have failed to achieve the above, causing them severe losses after pouring money into digital assets.

For that reason, we have collected the top 5 mistakes of beginner crypto traders and some tips to avoid them in this article.

1. Trading Without the Necessary Knowledge

It’s tempting to jump right into day trading crypto without having the necessary trading or market knowledge.

While you may achieve good returns at first, it’s the result of pure luck in most cases. Even worse, when your luck goes away, you will likely face serious losses.

For you to succeed in day trading crypto, you need at least a basic knowledge of cryptocurrencies, market mechanisms, as well as trading assets in general.

If you have acquired that, you will know how to use fundamental analysis, technical analysis, or the combination of the two to spot crypto trading signals and pick the right ones to make decent returns on your trades.

Fortunately, the digital asset industry has tons of guides, tutorials, and even full-fledged courses that you can use to learn crypto trading.

The Digitex Blog is an excellent starting point to read beginner-friendly articles on crypto trading; we highly recommend checking it out!

2. Lack of Crypto Trading Strategies

Even those who have extensive market knowledge often fail to develop their crypto trading strategies before jumping into a trade.

The lack of a decent plan will lead to impulsive trading, which can be best compared to visiting the supermarket hungry without a grocery shopping list and buying all the food you find there.

While both cases lead to spending significantly more money than you would have planned, impulsive decisions in trading can cause severe financial losses.

For that reason, you need a good crypto trading strategy, which includes strict rules to enter and exit trades, tactics to manage your risks, as well as the tools and indicators to research assets and find decent opportunities to trade.

3. Panic Selling

When you are trading cryptocurrencies – or basically any other asset class –, it’s hard to keep your emotions in control.

Greed, fear, hope, and excitement are some of those emotions that prevent traders from making the right decisions.

If you can’t control your emotions, you will likely face the issue of panic selling, in which traders or investors sell a cryptocurrency as soon as it experiences significant losses.

While it makes sense to cut your losses sometimes, you should remember that you will only lose money on a long trade after selling the asset.

If your crypto trading strategy is a great one, you will know when to enter and exit trades, and you won’t experience the panic that would make you sell your digital asset holdings when prices hit bottom.

4. Revenge Trading

One of the most common mistakes of beginner crypto traders is revenge trading, in which one loses funds in a trade and enters into a new, riskier position in an attempt to recover his losses.

In such a case, the trader takes too much risks while his decision is driven by frustration and fear. For these reasons, it’s very likely to lead to further, more significant losses.

Being disciplined, keeping your emotions in control, and leveraging a decent crypto trading strategy is an excellent way to overcome revenge trading.

5. Paying High Exchange Fees

A common misconception among beginner crypto traders is that you have a 50-50% chance to win or lose a trade.

However, in practice, it’s (almost) never true.

Since crypto exchanges impose fees on your trades right after entering a position, you will start trading crypto with a loss.

And things will get worse when you margin trade crypto – a 0.10% fee becomes 10% in case of a 100x leverage – or pick a service provider that features higher costs than average.

The lower the fees, the higher your chances for winning trades; you should remember that.

At Digitex, our top priority is to offer the best crypto trading experience to our traders. For that reason, we have completely eliminated fees, allowing all our users to have access to free crypto trading.

As a result, you can limit their risks and maximize your chances for winning trades while keeping 100% of the profit you make on the platform.

Start trading crypto on Digitex now!

April 14, 2021
Trading

The Top 5 Mistakes of Beginner Crypto Traders

Digitex
The Top 5 Mistakes of Beginner Crypto Traders 6

With an over $2 trillion size, the current cryptocurrency bull market provides great opportunities for many investors and traders.

However, as with other asset classes, crypto is not a get-rich-quick scheme in which you put your money to see over 1,000% returns a day after (it can happen, but it’s highly unlikely).

Instead, you have to research assets to pick the right ones, gather knowledge about the market, as well as create and implement a viable crypto trading strategy to succeed.

That said, many newbies have failed to achieve the above, causing them severe losses after pouring money into digital assets.

For that reason, we have collected the top 5 mistakes of beginner crypto traders and some tips to avoid them in this article.

1. Trading Without the Necessary Knowledge

It’s tempting to jump right into day trading crypto without having the necessary trading or market knowledge.

While you may achieve good returns at first, it’s the result of pure luck in most cases. Even worse, when your luck goes away, you will likely face serious losses.

For you to succeed in day trading crypto, you need at least a basic knowledge of cryptocurrencies, market mechanisms, as well as trading assets in general.

If you have acquired that, you will know how to use fundamental analysis, technical analysis, or the combination of the two to spot crypto trading signals and pick the right ones to make decent returns on your trades.

Fortunately, the digital asset industry has tons of guides, tutorials, and even full-fledged courses that you can use to learn crypto trading.

The Digitex Blog is an excellent starting point to read beginner-friendly articles on crypto trading; we highly recommend checking it out!

2. Lack of Crypto Trading Strategies

Even those who have extensive market knowledge often fail to develop their crypto trading strategies before jumping into a trade.

The lack of a decent plan will lead to impulsive trading, which can be best compared to visiting the supermarket hungry without a grocery shopping list and buying all the food you find there.

While both cases lead to spending significantly more money than you would have planned, impulsive decisions in trading can cause severe financial losses.

For that reason, you need a good crypto trading strategy, which includes strict rules to enter and exit trades, tactics to manage your risks, as well as the tools and indicators to research assets and find decent opportunities to trade.

3. Panic Selling

When you are trading cryptocurrencies – or basically any other asset class –, it’s hard to keep your emotions in control.

Greed, fear, hope, and excitement are some of those emotions that prevent traders from making the right decisions.

If you can’t control your emotions, you will likely face the issue of panic selling, in which traders or investors sell a cryptocurrency as soon as it experiences significant losses.

While it makes sense to cut your losses sometimes, you should remember that you will only lose money on a long trade after selling the asset.

If your crypto trading strategy is a great one, you will know when to enter and exit trades, and you won’t experience the panic that would make you sell your digital asset holdings when prices hit bottom.

4. Revenge Trading

One of the most common mistakes of beginner crypto traders is revenge trading, in which one loses funds in a trade and enters into a new, riskier position in an attempt to recover his losses.

In such a case, the trader takes too much risks while his decision is driven by frustration and fear. For these reasons, it’s very likely to lead to further, more significant losses.

Being disciplined, keeping your emotions in control, and leveraging a decent crypto trading strategy is an excellent way to overcome revenge trading.

5. Paying High Exchange Fees

A common misconception among beginner crypto traders is that you have a 50-50% chance to win or lose a trade.

However, in practice, it’s (almost) never true.

Since crypto exchanges impose fees on your trades right after entering a position, you will start trading crypto with a loss.

And things will get worse when you margin trade crypto – a 0.10% fee becomes 10% in case of a 100x leverage – or pick a service provider that features higher costs than average.

The lower the fees, the higher your chances for winning trades; you should remember that.

At Digitex, our top priority is to offer the best crypto trading experience to our traders. For that reason, we have completely eliminated fees, allowing all our users to have access to free crypto trading.

As a result, you can limit their risks and maximize your chances for winning trades while keeping 100% of the profit you make on the platform.

Start trading crypto on Digitex now!

Latest News

What Is Margin Trading and Why Should You Trade Bitcoin With Leverage? 7

What Is Margin Trading and Why Should You Trade Bitcoin With Leverage?

Trading
• Digitex
April 13, 2021

Margin trading has become increasingly popular in the digital asset industry.

When you trade Bitcoin with leverage, you can maximize your profit potential while taking more risks with your positions.

Furthermore, it allows users day trading crypto to earn considerable revenue even on smaller price movements.

In this article, we will take a look at margin trading along with its benefits and potential risks involved for those who trade Bitcoin with leverage.

What Is Margin Trading?

Margin refers to the funds borrowed from a crypto exchange or a brokerage firm to long or short a specific asset on the trading platform.

For that reason, margin trading is the practice in which you trade an instrument using money borrowed from third parties (e.g., a broker, exchange, or other traders).

As a result, you have access to greater capital, which you can use to increase your potential profits as well as to amplify the effects of successful trades.

However, borrowing funds to trade Bitcoin with leverage has very different terms than, for example, getting a personal loan at your bank.

While you don’t have to deposit additional funds into your account – as the exchange uses the assets you have in your margin trading account as collateral – the service provider will liquidate your assets without prior consent if you suffer too much losses.

In such a case, when your margin account’s value falls below the exchange’s required amount, a margin call will occur. As a result, you will lose all of your collateral.

And the more leverage you use to trade Bitcoin, the stricter the exchange’s requirements will be for margin traders.

In most cases, you can trade digital assets on a margin with leverage between 2x and 100x. If you hold 0.1 BTC in your exchange account, a 100x margin would mean that you can borrow funds to trade up to 10 BTC.

What Are the Benefits of Trading Bitcoin With Leverage?

Below, we have collected the advantages of margin trading crypto:

  • More profits: When you trade Bitcoin with leverage, you are using more funds than what you have in your account. For that reason, successful trades on a margin will bring you more profits than ones without leverage.
  • Short trades: Without borrowing funds, you can only enter long positions for digital assets. On the other hand, margin trading allows traders to profit from bearish price movements by shorting crypto.
  • Profits on smaller price moves: Traders with short-term trading strategies like scalping aim to generate profits on small price movements very quickly, which they can achieve with margin trading. Moreover, trading Bitcoin with leverage also allows traders to generate income even in times of low volatility.
  • Diversification: With margin trading, traders have access to increased capital, which they can use to diversify their funds into more assets to maximize their gains and limit their risks.

Are There Any Risks of Margin Trading Crypto?

While trading Bitcoin with leverage certainly has its benefits, it also comes with risks for traders.

The first is the most obvious one: the more profits you (potentially) earn, the increased risks you face when trading assets on any market.

For that reason, if the asset’s price you trade takes a significant hit, it could trigger a margin call in which the exchange liquidates all your collateral.

As mentioned before, the risks of margin calls are greater when you are using more leverage for your trades.

As part of your crypto trading strategies, we recommend placing stop-loss orders to minimize the chances of margin calls, limit your losses, and protect your positions when trading Bitcoin with leverage.

Trade Bitcoin With Leverage at Digitex

Margin trading is an excellent practice for traders to diversify their assets, maximize their profits for winning trades, as well as to short cryptocurrencies.

However, margin trading involves more risks than the spot market. Therefore, it requires traders to leverage more disciplined crypto trading strategies that involve handy tactics, such as placing stop-loss orders.

Another great way to reduce the risks of margin trading is to trade crypto for free. By paying less fees, you maximize the chances for winning trades while keeping 100% of the profits.

The good news is that you can do exactly that on the next-generation zero-fee Bitcoin derivatives exchange Digitex.

Sounds great, huh?

Trade Bitcoin with leverage at Digitex now to enjoy a zero-fee margin trading experience!

 

April 13, 2021
Trading

What Is Margin Trading and Why Should You Trade Bitcoin With Leverage?

Digitex
What Is Margin Trading and Why Should You Trade Bitcoin With Leverage? 8

Margin trading has become increasingly popular in the digital asset industry.

When you trade Bitcoin with leverage, you can maximize your profit potential while taking more risks with your positions.

Furthermore, it allows users day trading crypto to earn considerable revenue even on smaller price movements.

In this article, we will take a look at margin trading along with its benefits and potential risks involved for those who trade Bitcoin with leverage.

What Is Margin Trading?

Margin refers to the funds borrowed from a crypto exchange or a brokerage firm to long or short a specific asset on the trading platform.

For that reason, margin trading is the practice in which you trade an instrument using money borrowed from third parties (e.g., a broker, exchange, or other traders).

As a result, you have access to greater capital, which you can use to increase your potential profits as well as to amplify the effects of successful trades.

However, borrowing funds to trade Bitcoin with leverage has very different terms than, for example, getting a personal loan at your bank.

While you don’t have to deposit additional funds into your account – as the exchange uses the assets you have in your margin trading account as collateral – the service provider will liquidate your assets without prior consent if you suffer too much losses.

In such a case, when your margin account’s value falls below the exchange’s required amount, a margin call will occur. As a result, you will lose all of your collateral.

And the more leverage you use to trade Bitcoin, the stricter the exchange’s requirements will be for margin traders.

In most cases, you can trade digital assets on a margin with leverage between 2x and 100x. If you hold 0.1 BTC in your exchange account, a 100x margin would mean that you can borrow funds to trade up to 10 BTC.

What Are the Benefits of Trading Bitcoin With Leverage?

Below, we have collected the advantages of margin trading crypto:

  • More profits: When you trade Bitcoin with leverage, you are using more funds than what you have in your account. For that reason, successful trades on a margin will bring you more profits than ones without leverage.
  • Short trades: Without borrowing funds, you can only enter long positions for digital assets. On the other hand, margin trading allows traders to profit from bearish price movements by shorting crypto.
  • Profits on smaller price moves: Traders with short-term trading strategies like scalping aim to generate profits on small price movements very quickly, which they can achieve with margin trading. Moreover, trading Bitcoin with leverage also allows traders to generate income even in times of low volatility.
  • Diversification: With margin trading, traders have access to increased capital, which they can use to diversify their funds into more assets to maximize their gains and limit their risks.

Are There Any Risks of Margin Trading Crypto?

While trading Bitcoin with leverage certainly has its benefits, it also comes with risks for traders.

The first is the most obvious one: the more profits you (potentially) earn, the increased risks you face when trading assets on any market.

For that reason, if the asset’s price you trade takes a significant hit, it could trigger a margin call in which the exchange liquidates all your collateral.

As mentioned before, the risks of margin calls are greater when you are using more leverage for your trades.

As part of your crypto trading strategies, we recommend placing stop-loss orders to minimize the chances of margin calls, limit your losses, and protect your positions when trading Bitcoin with leverage.

Trade Bitcoin With Leverage at Digitex

Margin trading is an excellent practice for traders to diversify their assets, maximize their profits for winning trades, as well as to short cryptocurrencies.

However, margin trading involves more risks than the spot market. Therefore, it requires traders to leverage more disciplined crypto trading strategies that involve handy tactics, such as placing stop-loss orders.

Another great way to reduce the risks of margin trading is to trade crypto for free. By paying less fees, you maximize the chances for winning trades while keeping 100% of the profits.

The good news is that you can do exactly that on the next-generation zero-fee Bitcoin derivatives exchange Digitex.

Sounds great, huh?

Trade Bitcoin with leverage at Digitex now to enjoy a zero-fee margin trading experience!

 

Latest News

Ethereum

The Future Price of Ethereum — Technical Analysis

Digitex Futures
• Dave Reiter
April 12, 2021

Similar to other coins and tokens, Ethereum has generated a substantial rally throughout the past six months. Specifically, ETH has increased 498%, outperforming BTC by approximately 60% during the same time period (see chart 1 below). So, where do we go from here? How will ETH perform for the remainder of 2021 and beyond? Let’s explore the details.

The Future Price of Ethereum — Technical Analysis 9

The Difference Between Ethereum and Ether

In terms of market capitalization, ETH is the second-largest cryptocurrency in the crypto universe. Only Bitcoin has a larger market capitalization. ETH has enjoyed some explosive price moves throughout its brief 6-year history. But, before we analyze the future price direction of ETH, let’s briefly discuss the difference between Ethereum and Ether.

There seems to be some confusion regarding these two crypto terms. Ethereum is a blockchain-based platform used for writing autonomous smart contracts and decentralized applications. Ether is the cryptocurrency that serves as the fuel to power the smart contracts, apps, and other transactions on the Ethereum blockchain.

Although most people in the crypto community (including many crypto websites) use these words interchangeably, they are actually quite different in terms of how they are used in the crypto ecosystem.

Use Cases for Ethereum Blockchain Continue to Expand

In this article, we will be analyzing the price direction of Ether (ETH), the cryptocurrency. However, it’s also important to discuss Ethereum, the blockchain, because it lays the foundation for the current ETH bull market. It seems almost impossible to believe that Ether was trading below $100 per token less than 15 months ago (see chart 2).

The Future Price of Ethereum — Technical Analysis 10

Over the course of the past 15 months, ETH has exploded to the upside by increasing 2,226%. Since March 2020, ETH has been one of the top-performing cryptocurrencies within the entire crypto universe. Ether easily outperformed Bitcoin during this particular time period, 2,226% versus 1,388%.

The majority of Ether’s gains can be attributed to the fact that the total number of use cases for the Ethereum blockchain has increased substantially. Unlike the Bitcoin blockchain, Ethereum can be used for multiple applications across a wide variety of industries. Several of these applications have evolved into legitimate and profitable business enterprises with exponential growth potential. Let’s briefly examine a few of these Ethereum-based businesses.

DeFi (Decentralized Finance)

Without question, the most exciting new business linked to Ethereum is decentralized finance, more commonly known as DeFi. Although DeFi has been in existence for less than four years, it has gained an incredible amount of interest from venture capital firms and angel investors who see the enormous potential in this new space.

Without going into great detail, DeFi competes head-to-head with the legacy financial services industry, with an estimated value of $26.5 trillion by 2022, according to data gathered by The World Bank. Based on these numbers, the upside potential in DeFi is massive. This is great news if you are an owner of ETH because the overwhelming majority of the DeFi ecosystem operates on the Ethereum blockchain.

NFTs (Non-Fungible Tokens)

Another business venture associated with Ethereum is non-fungible tokens (NFT), which have witnessed a tremendous wave of enthusiasm from investors and speculators during the past few months. Very briefly, non-fungible tokens allow non-fungible assets to possess unique properties that completely change the user and development relationship of these assets.

Examples of non-fungible digital assets include digital collectibles, such as in-game items and characters, virtual pets, and representations of fine art. By attaching unique properties such as immutability and scarcity to non-fungible assets, it substantially increases the value of said assets.

Almost the entire NFT industry operates on the Ethereum blockchain, which is obviously bullish for ETH. Arguably, the most exciting part of NFTs is the fact that young people are heavily involved in this exciting new space. Consequently, this will provide Generation Z with an opportunity to familiarize themselves with cryptocurrencies and other digital assets. This is very bullish from a long-term perspective.

In addition to DeFi and NFT, the Ethereum blockchain is also actively engaged in enterprise software, which is used by organizations, businesses, charities, schools, and governments to handle day-to-day operations across a wide variety of internal departments within each organization.

These daily operations would include such tasks as human resources, supply chain management, database management, CRM, security, and billing systems. Enterprise software companies are using a privatized version of the Ethereum network to provide their services to companies like Microsoft, IBM, JPMorgan Chase, and Deloitte.

These are just a few examples of how the Ethereum blockchain is linked to industries and businesses across the global economy. Of course, this is extremely bullish for ETH because these companies and businesses must purchase ETH in order to pay for their services on the Ethereum blockchain. Many crypto experts believe that the number of use cases for Ethereum will continue to expand as blockchain technology becomes more common throughout the global economy.

Using TA to Forecast the Price of ETH

Technical analysis has been extremely useful in forecasting the future price direction of ETH. Let’s review a few of these indicators.

Arguably, the most reliable technical indicator in modern history was created by a twelfth-century Italian mathematician by the name of Leonardo Fibonacci. The vast majority of mathematical historians consider Fibonacci to be the greatest mathematician of the Middle Ages. In fact, many experts in the field of mathematics claim that Fibonacci was one of the ten greatest mathematicians of all time.

Fibonacci made several important contributions to the field of mathematics throughout his life. However, he will always be most famously known for Fibonacci numbers, which are a sequence of numbers developed by Fibonacci circa 1202.

Fibonacci numbers are used in the study of nature, music, agriculture, computer applications, price forecasting, and several other fields of study. Stock and commodity traders use “Fib” numbers to calculate support and resistance levels.

The most common Fib levels are:

  • .236
  • .382
  • .500
  • .618
  • .786
  • 000

It’s not uncommon for financial assets like cryptocurrencies to fluctuate between Fibonacci support and resistance levels for long periods of time. When a major breakout finally occurs, it usually marks the beginning of a substantial move.

The crypto trading community would love to know the final top in ETH before a new bear market ensues, probably near the end of 2021 or early-2022. Of course, it’s impossible to accurately forecast the final top of any speculative asset. Cryptocurrencies are particularly difficult because we have such a small sample size of historical data. However, we can use Fibonacci numbers to develop an educated forecast concerning the final top for Ether. Please review the calculation on Chart 3 below:

The Future Price of Ethereum — Technical Analysis 11

There are several different ways to use Fib levels as a forecasting device. The most popular format involves calculating the price difference between two important price levels. For this particular calculation, we selected the historic high from January 2018 and the subsequent low achieved in December of the same year.

The majority of Fibonacci experts agree that .618 is the most significant Fib level. Therefore, we will use this number in our calculation. Based on the Fibonacci calculation, the final top for this cycle will be 4,921.73. If ETH follows the same path as the 2017 bull market, the top will occur in late-2021.

Another useful technical indicator is the Relative Strength Index (RSI), which was created by J Welles Wilder Jr, one of the greatest technical analysts in the history of financial markets. RSI is a momentum indicator that measures the overbought or oversold condition of a speculative asset. RSI is typically displayed in an oscillator format, which fluctuates between 0 and 100.

Generally speaking, a market is considered overbought if the RSI reading exceeds 70. Conversely, the market is considered oversold if the RSI reading falls below 30. Many traders will use a reading above 70 as a trigger to generate a sell signal and a reading below 30 will generate a buy signal. However, this is not a good strategy to follow in a momentum-fueled environment like cryptocurrencies. Please review Chart number 4:

The Future Price of Ethereum — Technical Analysis 12

The RSI reading has been above 70 since November 9, 2020, when ETH was trading @ 446.10. Obviously, this was not a good time to sell ETH. In fact, this would have been a great time to buy Ether. Therefore, an argument could be made that the optimum way to use RSI for trending markets like cryptocurrencies is to wait for a bullish breakout above 70 as a buy signal. A bearish breakout below 30 would constitute a sell signal. Trying to pick tops and bottoms in a trending market is a recipe for disaster. As Chart #4 clearly demonstrates, the best course of action is to follow the momentum.

In addition to RSI, another momentum-based indicator is the Money Flow Index (MFI). This indicator measures the inflow and outflow of money into a speculative asset over a specific period of time. It uses price and volume to calculate trading pressure. Arguably, MFI is the purest way to determine the amount of money entering and leaving a particular asset class.

Similar to RSI, the index fluctuates between 0 and 100. In terms of trending markets like cryptocurrencies, the best way to apply MFI is to wait for a bullish breakout above 70 or a bearish breakout below 30. MFI is located at the bottom of Chart #5.

The Future Price of Ethereum — Technical Analysis 13

An Ether buy signal was generated @ 509.11 on November 23, 2020, when MFI penetrated the 70 level. MFI has been continuously above 70 for the past five months. This is a perfect example of why it’s best to follow the trend of the market and avoid the temptation to pick a top or bottom.

At least for now, the trend of ETH is clearly in favor of the bulls. The vast majority of technical indicators are forecasting a continuation of the bull market. In addition to technical analysis, the fundamental backdrop for Ether is extremely bullish, as more use cases are being added to the Ethereum blockchain. Eventually, this bullish cycle will end and a new bear cycle will begin. However, this current bullish phase could easily continue for the remainder of 2021.

Don’t forget that whether the price of ETH goes up or down, you can make money trading ETH futures on our zero-fee rapid-fire ladder trading platform. Sign up here to find out how easy it is to profit from even the smallest of price fluctuations when you’re not constantly losing out to commissions. 

Digitex Futures writers and/or guest authors may or may not have a vested interest in the Digitex Futures project and/or other businesses mentioned throughout the site. None of the content on Digitex Futures is investment advice nor is it a replacement for advice from a certified financial planner.

April 12, 2021
Digitex Futures

The Future Price of Ethereum — Technical Analysis

Dave Reiter
Ethereum

Similar to other coins and tokens, Ethereum has generated a substantial rally throughout the past six months. Specifically, ETH has increased 498%, outperforming BTC by approximately 60% during the same time period (see chart 1 below). So, where do we go from here? How will ETH perform for the remainder of 2021 and beyond? Let’s explore the details.

The Future Price of Ethereum — Technical Analysis 14

The Difference Between Ethereum and Ether

In terms of market capitalization, ETH is the second-largest cryptocurrency in the crypto universe. Only Bitcoin has a larger market capitalization. ETH has enjoyed some explosive price moves throughout its brief 6-year history. But, before we analyze the future price direction of ETH, let’s briefly discuss the difference between Ethereum and Ether.

There seems to be some confusion regarding these two crypto terms. Ethereum is a blockchain-based platform used for writing autonomous smart contracts and decentralized applications. Ether is the cryptocurrency that serves as the fuel to power the smart contracts, apps, and other transactions on the Ethereum blockchain.

Although most people in the crypto community (including many crypto websites) use these words interchangeably, they are actually quite different in terms of how they are used in the crypto ecosystem.

Use Cases for Ethereum Blockchain Continue to Expand

In this article, we will be analyzing the price direction of Ether (ETH), the cryptocurrency. However, it’s also important to discuss Ethereum, the blockchain, because it lays the foundation for the current ETH bull market. It seems almost impossible to believe that Ether was trading below $100 per token less than 15 months ago (see chart 2).

The Future Price of Ethereum — Technical Analysis 15

Over the course of the past 15 months, ETH has exploded to the upside by increasing 2,226%. Since March 2020, ETH has been one of the top-performing cryptocurrencies within the entire crypto universe. Ether easily outperformed Bitcoin during this particular time period, 2,226% versus 1,388%.

The majority of Ether’s gains can be attributed to the fact that the total number of use cases for the Ethereum blockchain has increased substantially. Unlike the Bitcoin blockchain, Ethereum can be used for multiple applications across a wide variety of industries. Several of these applications have evolved into legitimate and profitable business enterprises with exponential growth potential. Let’s briefly examine a few of these Ethereum-based businesses.

DeFi (Decentralized Finance)

Without question, the most exciting new business linked to Ethereum is decentralized finance, more commonly known as DeFi. Although DeFi has been in existence for less than four years, it has gained an incredible amount of interest from venture capital firms and angel investors who see the enormous potential in this new space.

Without going into great detail, DeFi competes head-to-head with the legacy financial services industry, with an estimated value of $26.5 trillion by 2022, according to data gathered by The World Bank. Based on these numbers, the upside potential in DeFi is massive. This is great news if you are an owner of ETH because the overwhelming majority of the DeFi ecosystem operates on the Ethereum blockchain.

NFTs (Non-Fungible Tokens)

Another business venture associated with Ethereum is non-fungible tokens (NFT), which have witnessed a tremendous wave of enthusiasm from investors and speculators during the past few months. Very briefly, non-fungible tokens allow non-fungible assets to possess unique properties that completely change the user and development relationship of these assets.

Examples of non-fungible digital assets include digital collectibles, such as in-game items and characters, virtual pets, and representations of fine art. By attaching unique properties such as immutability and scarcity to non-fungible assets, it substantially increases the value of said assets.

Almost the entire NFT industry operates on the Ethereum blockchain, which is obviously bullish for ETH. Arguably, the most exciting part of NFTs is the fact that young people are heavily involved in this exciting new space. Consequently, this will provide Generation Z with an opportunity to familiarize themselves with cryptocurrencies and other digital assets. This is very bullish from a long-term perspective.

In addition to DeFi and NFT, the Ethereum blockchain is also actively engaged in enterprise software, which is used by organizations, businesses, charities, schools, and governments to handle day-to-day operations across a wide variety of internal departments within each organization.

These daily operations would include such tasks as human resources, supply chain management, database management, CRM, security, and billing systems. Enterprise software companies are using a privatized version of the Ethereum network to provide their services to companies like Microsoft, IBM, JPMorgan Chase, and Deloitte.

These are just a few examples of how the Ethereum blockchain is linked to industries and businesses across the global economy. Of course, this is extremely bullish for ETH because these companies and businesses must purchase ETH in order to pay for their services on the Ethereum blockchain. Many crypto experts believe that the number of use cases for Ethereum will continue to expand as blockchain technology becomes more common throughout the global economy.

Using TA to Forecast the Price of ETH

Technical analysis has been extremely useful in forecasting the future price direction of ETH. Let’s review a few of these indicators.

Arguably, the most reliable technical indicator in modern history was created by a twelfth-century Italian mathematician by the name of Leonardo Fibonacci. The vast majority of mathematical historians consider Fibonacci to be the greatest mathematician of the Middle Ages. In fact, many experts in the field of mathematics claim that Fibonacci was one of the ten greatest mathematicians of all time.

Fibonacci made several important contributions to the field of mathematics throughout his life. However, he will always be most famously known for Fibonacci numbers, which are a sequence of numbers developed by Fibonacci circa 1202.

Fibonacci numbers are used in the study of nature, music, agriculture, computer applications, price forecasting, and several other fields of study. Stock and commodity traders use “Fib” numbers to calculate support and resistance levels.

The most common Fib levels are:

  • .236
  • .382
  • .500
  • .618
  • .786
  • 000

It’s not uncommon for financial assets like cryptocurrencies to fluctuate between Fibonacci support and resistance levels for long periods of time. When a major breakout finally occurs, it usually marks the beginning of a substantial move.

The crypto trading community would love to know the final top in ETH before a new bear market ensues, probably near the end of 2021 or early-2022. Of course, it’s impossible to accurately forecast the final top of any speculative asset. Cryptocurrencies are particularly difficult because we have such a small sample size of historical data. However, we can use Fibonacci numbers to develop an educated forecast concerning the final top for Ether. Please review the calculation on Chart 3 below:

The Future Price of Ethereum — Technical Analysis 16

There are several different ways to use Fib levels as a forecasting device. The most popular format involves calculating the price difference between two important price levels. For this particular calculation, we selected the historic high from January 2018 and the subsequent low achieved in December of the same year.

The majority of Fibonacci experts agree that .618 is the most significant Fib level. Therefore, we will use this number in our calculation. Based on the Fibonacci calculation, the final top for this cycle will be 4,921.73. If ETH follows the same path as the 2017 bull market, the top will occur in late-2021.

Another useful technical indicator is the Relative Strength Index (RSI), which was created by J Welles Wilder Jr, one of the greatest technical analysts in the history of financial markets. RSI is a momentum indicator that measures the overbought or oversold condition of a speculative asset. RSI is typically displayed in an oscillator format, which fluctuates between 0 and 100.

Generally speaking, a market is considered overbought if the RSI reading exceeds 70. Conversely, the market is considered oversold if the RSI reading falls below 30. Many traders will use a reading above 70 as a trigger to generate a sell signal and a reading below 30 will generate a buy signal. However, this is not a good strategy to follow in a momentum-fueled environment like cryptocurrencies. Please review Chart number 4:

The Future Price of Ethereum — Technical Analysis 17

The RSI reading has been above 70 since November 9, 2020, when ETH was trading @ 446.10. Obviously, this was not a good time to sell ETH. In fact, this would have been a great time to buy Ether. Therefore, an argument could be made that the optimum way to use RSI for trending markets like cryptocurrencies is to wait for a bullish breakout above 70 as a buy signal. A bearish breakout below 30 would constitute a sell signal. Trying to pick tops and bottoms in a trending market is a recipe for disaster. As Chart #4 clearly demonstrates, the best course of action is to follow the momentum.

In addition to RSI, another momentum-based indicator is the Money Flow Index (MFI). This indicator measures the inflow and outflow of money into a speculative asset over a specific period of time. It uses price and volume to calculate trading pressure. Arguably, MFI is the purest way to determine the amount of money entering and leaving a particular asset class.

Similar to RSI, the index fluctuates between 0 and 100. In terms of trending markets like cryptocurrencies, the best way to apply MFI is to wait for a bullish breakout above 70 or a bearish breakout below 30. MFI is located at the bottom of Chart #5.

The Future Price of Ethereum — Technical Analysis 18

An Ether buy signal was generated @ 509.11 on November 23, 2020, when MFI penetrated the 70 level. MFI has been continuously above 70 for the past five months. This is a perfect example of why it’s best to follow the trend of the market and avoid the temptation to pick a top or bottom.

At least for now, the trend of ETH is clearly in favor of the bulls. The vast majority of technical indicators are forecasting a continuation of the bull market. In addition to technical analysis, the fundamental backdrop for Ether is extremely bullish, as more use cases are being added to the Ethereum blockchain. Eventually, this bullish cycle will end and a new bear cycle will begin. However, this current bullish phase could easily continue for the remainder of 2021.

Don’t forget that whether the price of ETH goes up or down, you can make money trading ETH futures on our zero-fee rapid-fire ladder trading platform. Sign up here to find out how easy it is to profit from even the smallest of price fluctuations when you’re not constantly losing out to commissions. 

Digitex Futures writers and/or guest authors may or may not have a vested interest in the Digitex Futures project and/or other businesses mentioned throughout the site. None of the content on Digitex Futures is investment advice nor is it a replacement for advice from a certified financial planner.

Latest News

Crypto Trading

Get More Profits Through the Application of Technical Analysis in Crypto Trading

Trading
• Digitex

Technical analysis is among the most useful tools for traders, which especially comes in handy when day trading crypto.

For that reason, incorporating technical analysis into your crypto trading strategies is an excellent way to increase your chances for profits on the digital asset market.

In this article, we will explain what technical analysis is, how it is different from fundamental analysis, and what are the advantages and downsides of using it to discover crypto trading signals.

Let’s dive in!

What Is Technical Analysis And How Is it Different From Fundamental Analysis?

Technical analysis refers to the practice of evaluating investments and identifying trading signals by studying trends related to trading activity (e.g., price movement).

Simply put, it helps traders predict future price movements as well as decide whether to enter a position, when and for how long.

Technical analysis usually involves using multiple charting tools and indicators – such as the Relative Strength Index (RSI), the Money Flow Index (MFI), and the Moving Average Convergence Divergence (MACD) – to spot as well as interpret market trends and signals.

Fundamental analysis focuses on identifying an asset’s true value by analyzing its financial data (e.g., sales and earnings), the industry’s condition, and even general statistics about the economy.

On the other hand, technical analysis aims to find how the supply and demand on the market impact an instrument’s price, volume, and volatility.

Also, while fundamental analysis is best used for mid-to-long-term investments, technical analysis can be incorporated into day trading strategies.

Below, you can find the three fundamental principles of technical analysis in trading:

  1. The market prices everything: From a company’s financial data to market sentiment, everything is priced into an asset, according to technical analysts. The only exception is price movements, which are the products of supply and demand for a certain asset.
  2. Prices move in trends: Technical analysts believe that the market rarely moves erratically. Instead, no matter the timeframe used, they assume that prices exhibit trends.
  3. History often repeats itself: Based on market psychology, price movements regularly repeat themselves throughout time due to emotions like fear, excitement, and greed. Technical analysis evaluates these emotions via chart patterns to understand trends and predict future price movements.

What Are the Pros and Cons of Technical Analysis in Crypto?

Technical analysis has been widely popular among traders in the crypto industry. And for a very good reason.

While fundamental analysis works great for general market assets like stocks and bonds, it’s very hard to determine the intrinsic value of cryptocurrencies.

For that reason, technical analysis is a better choice to identify crypto trading signals, especially if we take the high volatility of the asset class into account, which makes it an excellent option for day traders.

Furthermore, technical analysis allows traders to identify and respond to market changes quickly.

With hundreds of indicators to choose from, traders can customize their crypto trading strategies to fit their preferences by leveraging technical analysis.

Combining trading knowledge, practice, and the right tools allows traders to accurately predict future digital asset price movements in most of their trades.

As with every trading practice, technical analysis has its own limitations.

One of its main downsides is related to market behavior, which can be unpredicted on certain occasions. For that reason, technical analysis can’t provide 100% accurate crypto trading signals for users.

Moreover, with so many tools to choose from, it’s hard for beginners to learn the ropes and select the indicators that best fit their crypto trading strategies. Also, some technical analysis tools are more reliable and precise than others.

Closing Thoughts

Along with fundamental analysis, technical analysis is among the most popular practices to evaluate financial decisions.

While the prior evaluates data to calculate the true value of assets to spot the ones trading at a discount, technical analysis is based on an asset’s price charts, identifying patterns to predict future price movements using historical market data and statistics.

However, while it’s nearly impossible to determine the intrinsic value of digital assets, technical analysis tends to work better for crypto traders.

Are you looking to learn more about crypto trading?

Check out the following articles to learn how the Bitcoin volume impacts traders, what the best crypto trading strategies are, and how to profit from scalping futures.

In case you are ready to test your skills, be sure to check out the zero-fee Bitcoin futures exchange Digitex to trade crypto for free!

April 12, 2021
Trading

Get More Profits Through the Application of Technical Analysis in Crypto Trading

Digitex
Crypto Trading

Technical analysis is among the most useful tools for traders, which especially comes in handy when day trading crypto.

For that reason, incorporating technical analysis into your crypto trading strategies is an excellent way to increase your chances for profits on the digital asset market.

In this article, we will explain what technical analysis is, how it is different from fundamental analysis, and what are the advantages and downsides of using it to discover crypto trading signals.

Let’s dive in!

What Is Technical Analysis And How Is it Different From Fundamental Analysis?

Technical analysis refers to the practice of evaluating investments and identifying trading signals by studying trends related to trading activity (e.g., price movement).

Simply put, it helps traders predict future price movements as well as decide whether to enter a position, when and for how long.

Technical analysis usually involves using multiple charting tools and indicators – such as the Relative Strength Index (RSI), the Money Flow Index (MFI), and the Moving Average Convergence Divergence (MACD) – to spot as well as interpret market trends and signals.

Fundamental analysis focuses on identifying an asset’s true value by analyzing its financial data (e.g., sales and earnings), the industry’s condition, and even general statistics about the economy.

On the other hand, technical analysis aims to find how the supply and demand on the market impact an instrument’s price, volume, and volatility.

Also, while fundamental analysis is best used for mid-to-long-term investments, technical analysis can be incorporated into day trading strategies.

Below, you can find the three fundamental principles of technical analysis in trading:

  1. The market prices everything: From a company’s financial data to market sentiment, everything is priced into an asset, according to technical analysts. The only exception is price movements, which are the products of supply and demand for a certain asset.
  2. Prices move in trends: Technical analysts believe that the market rarely moves erratically. Instead, no matter the timeframe used, they assume that prices exhibit trends.
  3. History often repeats itself: Based on market psychology, price movements regularly repeat themselves throughout time due to emotions like fear, excitement, and greed. Technical analysis evaluates these emotions via chart patterns to understand trends and predict future price movements.

What Are the Pros and Cons of Technical Analysis in Crypto?

Technical analysis has been widely popular among traders in the crypto industry. And for a very good reason.

While fundamental analysis works great for general market assets like stocks and bonds, it’s very hard to determine the intrinsic value of cryptocurrencies.

For that reason, technical analysis is a better choice to identify crypto trading signals, especially if we take the high volatility of the asset class into account, which makes it an excellent option for day traders.

Furthermore, technical analysis allows traders to identify and respond to market changes quickly.

With hundreds of indicators to choose from, traders can customize their crypto trading strategies to fit their preferences by leveraging technical analysis.

Combining trading knowledge, practice, and the right tools allows traders to accurately predict future digital asset price movements in most of their trades.

As with every trading practice, technical analysis has its own limitations.

One of its main downsides is related to market behavior, which can be unpredicted on certain occasions. For that reason, technical analysis can’t provide 100% accurate crypto trading signals for users.

Moreover, with so many tools to choose from, it’s hard for beginners to learn the ropes and select the indicators that best fit their crypto trading strategies. Also, some technical analysis tools are more reliable and precise than others.

Closing Thoughts

Along with fundamental analysis, technical analysis is among the most popular practices to evaluate financial decisions.

While the prior evaluates data to calculate the true value of assets to spot the ones trading at a discount, technical analysis is based on an asset’s price charts, identifying patterns to predict future price movements using historical market data and statistics.

However, while it’s nearly impossible to determine the intrinsic value of digital assets, technical analysis tends to work better for crypto traders.

Are you looking to learn more about crypto trading?

Check out the following articles to learn how the Bitcoin volume impacts traders, what the best crypto trading strategies are, and how to profit from scalping futures.

In case you are ready to test your skills, be sure to check out the zero-fee Bitcoin futures exchange Digitex to trade crypto for free!

Latest News

Digitex Futures

Digitex Futures Is Going Strong in 2021 – by CoinCollector

Digitex Futures
Trading
• Digitex
April 8, 2021

With so much action surrounding the price of Bitcoin (BTC) and Ether (ETH) this year, naturally more and more people are interested in profiting from the volatility. Trading futures is an excellent way to do this since you can make money whether the price goes up or down–as long as you make the right call. And, if you trade on a zero-fee exchange, you get to keep all of your profit. 

But don’t just take our word for it. Check out this awesome YouTube video by CoinCollector, a frequent trader from the Digitex community. He explains why he uses Digitex Futures as his platform of choice, and walks through some of the features that make it so unique. Check it out:

Zero Fees

CoinCollector says that he has used many different exchanges for trading cryptocurrency futures but that he always comes back to Digitex because of its zero-fee commission structure. On no other exchange can he actually execute the same type of aggressive scalping strategies that he can on Digitex because the fees prevent him from doing so.

He goes on to say that trading without fees will “change the game of how your trade.” If you are trading with fees, he says, you have to be more careful. Digitex lets you trade more aggressively since you can easily go in and out of trades and even enter or exit your trades at the exact same price without paying any fees. 

If you did that on any other exchange you would have to pay a “ton of fees” that would eat up any profit you would have made. “You would be shocked by how much money you can save without paying any fees,” he says.

One-Click Trading Ladder

He also loves the trading ladder interface which is still unique to the crypto space. He shows us how he manages his trades “so easily” on the new UI that was updated last month. “Trading on this exchange is something that is so easy,” he says, as he walks through placing a trade, changing the leverage, and setting a limit order.

He also says that, in the last couple of months, he has taken his account balance from 200K DGTX tokens to a whopping 3.2 million DGTX just from trading. This interface is “super intuitive and a lot of fun,” he enthuses.

The DGTX Token

CoinCollector reminds viewers that all trading on the Digitex exchange takes place in our native exchange token DGTX. So, if you want to participate in our commission-free markets, you must own DGTX tokens first. All profits and losses on the exchange are settled in DGTX, and all account balances are denominated in DGTX. Having our own token for trading on the exchange enables us to sustain a commission-free trading environment for all. You can find out more about DGTX tokenomics here.

Liquidity Mining Program

As well as allowing you to keep all your profit from gains made on the exchange, Digitex pays you to place orders via our Liquidity Mining program. This is something that no other exchange allows you to do. “You can make money by simply providing liquidity to the order book,” CoinCollector explains. 

In order to reward our traders and increase liquidity on the exchange, our system takes a snapshot every minute and pays out DGTX rewards based on how many orders you placed that were close to the spot price at that time. You can easily check your profits by selecting the “Liquidy Mining” tab in the interface. CoinCollector shows you how to do this.

Zero-Fee Spot Markets Coming Soon

Coming very soon to Digitex are the zero-fee spot markets, which will be “very very cool.” This major upgrade will allow you to buy and sell your DGTX directly on the exchange without having to use another platform. You can start trading easier and sell quicker so that you are not exposed to the volatility of the token. 

“I think this will bring some new dynamics to the token,” he says. “This is the main thing that’s missing, it will be cool because you can quickly sell DGTX to USDC and avoid volatility, or you can choose to hold DGTX if you think the price may go up. It’s up to you.”

Wrapping It Up

CoinCollector says that he’s very bullish on the outlook for Digitex for the rest of the year. He points out that in-house trading bots are coming soon to make it even easier to set up a trading bot and maximize your rewards from liquidity mining–and that a DGTX Staking program is also on the roadmap and should be very popular.

He concludes by saying that you will notice how much easier it is to make profit than on other exchanges. “The potential for Digtex is very very huge given how the overall market is riding right now… What better thing to do than to put your trading volume to work on a zero fee exchange?”

A big thank you to CoinCollector for taking the time to make this awesome video. We’re glad to hear that you’re enjoying trading on the platform–and making spectacular gains to boot!

Are you ready to start trading BTC and ETH futures with zero fees and grow your trading balance exponentially like CoinCollector? Sign up for an account here now.

 

April 8, 2021
Digitex Futures
Trading

Digitex Futures Is Going Strong in 2021 – by CoinCollector

Digitex
Digitex Futures

With so much action surrounding the price of Bitcoin (BTC) and Ether (ETH) this year, naturally more and more people are interested in profiting from the volatility. Trading futures is an excellent way to do this since you can make money whether the price goes up or down–as long as you make the right call. And, if you trade on a zero-fee exchange, you get to keep all of your profit. 

But don’t just take our word for it. Check out this awesome YouTube video by CoinCollector, a frequent trader from the Digitex community. He explains why he uses Digitex Futures as his platform of choice, and walks through some of the features that make it so unique. Check it out:

Zero Fees

CoinCollector says that he has used many different exchanges for trading cryptocurrency futures but that he always comes back to Digitex because of its zero-fee commission structure. On no other exchange can he actually execute the same type of aggressive scalping strategies that he can on Digitex because the fees prevent him from doing so.

He goes on to say that trading without fees will “change the game of how your trade.” If you are trading with fees, he says, you have to be more careful. Digitex lets you trade more aggressively since you can easily go in and out of trades and even enter or exit your trades at the exact same price without paying any fees. 

If you did that on any other exchange you would have to pay a “ton of fees” that would eat up any profit you would have made. “You would be shocked by how much money you can save without paying any fees,” he says.

One-Click Trading Ladder

He also loves the trading ladder interface which is still unique to the crypto space. He shows us how he manages his trades “so easily” on the new UI that was updated last month. “Trading on this exchange is something that is so easy,” he says, as he walks through placing a trade, changing the leverage, and setting a limit order.

He also says that, in the last couple of months, he has taken his account balance from 200K DGTX tokens to a whopping 3.2 million DGTX just from trading. This interface is “super intuitive and a lot of fun,” he enthuses.

The DGTX Token

CoinCollector reminds viewers that all trading on the Digitex exchange takes place in our native exchange token DGTX. So, if you want to participate in our commission-free markets, you must own DGTX tokens first. All profits and losses on the exchange are settled in DGTX, and all account balances are denominated in DGTX. Having our own token for trading on the exchange enables us to sustain a commission-free trading environment for all. You can find out more about DGTX tokenomics here.

Liquidity Mining Program

As well as allowing you to keep all your profit from gains made on the exchange, Digitex pays you to place orders via our Liquidity Mining program. This is something that no other exchange allows you to do. “You can make money by simply providing liquidity to the order book,” CoinCollector explains. 

In order to reward our traders and increase liquidity on the exchange, our system takes a snapshot every minute and pays out DGTX rewards based on how many orders you placed that were close to the spot price at that time. You can easily check your profits by selecting the “Liquidy Mining” tab in the interface. CoinCollector shows you how to do this.

Zero-Fee Spot Markets Coming Soon

Coming very soon to Digitex are the zero-fee spot markets, which will be “very very cool.” This major upgrade will allow you to buy and sell your DGTX directly on the exchange without having to use another platform. You can start trading easier and sell quicker so that you are not exposed to the volatility of the token. 

“I think this will bring some new dynamics to the token,” he says. “This is the main thing that’s missing, it will be cool because you can quickly sell DGTX to USDC and avoid volatility, or you can choose to hold DGTX if you think the price may go up. It’s up to you.”

Wrapping It Up

CoinCollector says that he’s very bullish on the outlook for Digitex for the rest of the year. He points out that in-house trading bots are coming soon to make it even easier to set up a trading bot and maximize your rewards from liquidity mining–and that a DGTX Staking program is also on the roadmap and should be very popular.

He concludes by saying that you will notice how much easier it is to make profit than on other exchanges. “The potential for Digtex is very very huge given how the overall market is riding right now… What better thing to do than to put your trading volume to work on a zero fee exchange?”

A big thank you to CoinCollector for taking the time to make this awesome video. We’re glad to hear that you’re enjoying trading on the platform–and making spectacular gains to boot!

Are you ready to start trading BTC and ETH futures with zero fees and grow your trading balance exponentially like CoinCollector? Sign up for an account here now.

 

Latest News

Enjoy Commission Free Crypto Trading With Digitex Futures 19

Enjoy Commission Free Crypto Trading With Digitex Futures

Digitex Futures
Trading
• Digitex
April 6, 2021

Digitex Futures is proudly the world’s first commission-free cryptocurrency futures trading platform. Thanks to its one-of-a-kind feature in the blockchain industry, market participants can pursue high-frequency trading strategies that were impossible to perform before. By disrupting the status quo, anyone can now become a consistently profitable trader. 

Creating the Path to Profitability

After spending most of his professional career on the floor of the London International Financial Futures & Options Exchange (LIFFE), Digitex Futures’ CEO Adam Todd had the vision to create a trading platform that completely eliminates all fees. The idea was to provide the nascent cryptocurrency industry with an enterprise-grade futures exchange that would enable any trader in the world to participate in the blockchain revolution. 

Todd understood that newcomers would not only be discouraged by the lack of sufficient liquidity in the cryptocurrency market and the complexity around handling these digital assets but also by the high fees that can completely remove a trader’s edge. As a result, the British entrepreneur decided to level the playing field for the average futures trader by creating a state-of-the-art, user-friendly, and zero-fee crypto futures exchange

The current core strategy that most of the renowned cryptocurrency futures exchanges in the market use to generate profits was created around the idea that a “middleman” is entitled to a fee or commission to provide its services. For instance, an average taker fee is roughly 0.075%, so traders using 100x leverage have to pay a massive 7.50% commission of their margin on every single trade. 

As the world transitions from centralized finance (CeFI) into decentralized finance (DeFi), such an unjust business model that comes at the expense of traders is now obsolete. 

Digitex Futures operates on a winning formula where all commissions and fees are eliminated, making it easy for traders to make money using high-frequency trading strategies. For the first time ever, cryptocurrency enthusiasts can engage in highly active and short-term trades without being penalized by volume-based commissions that make it impossible to make a profit. Anyone can now take single-tick profits and losses without any edge working against them. 

Instead of taking advantage of active traders, Digitex Futures actually rewards them by removing all maker and taker fees and implementing automated market makers’ software. This breakthrough innovation fundamentally changes the blockchain industry’s dynamics, and sooner rather than later other exchanges will have no choice but to follow suit. 

While others try to catch up with Digitex Futures’ zero-fee business model, market participants are welcome to grind out consistent small profits that do not get eaten up by fees using a rapid-fire trading ladder.

Those who have not signed up yet to Digitex Futures can do so easily by clicking the link here. It is time to start making money on cryptocurrency futures whether the market goes up or down. Sign up and take advantage of the world’s first commission-free cryptocurrency futures trading platform.

April 6, 2021
Digitex Futures
Trading

Enjoy Commission Free Crypto Trading With Digitex Futures

Digitex
Enjoy Commission Free Crypto Trading With Digitex Futures 20

Digitex Futures is proudly the world’s first commission-free cryptocurrency futures trading platform. Thanks to its one-of-a-kind feature in the blockchain industry, market participants can pursue high-frequency trading strategies that were impossible to perform before. By disrupting the status quo, anyone can now become a consistently profitable trader. 

Creating the Path to Profitability

After spending most of his professional career on the floor of the London International Financial Futures & Options Exchange (LIFFE), Digitex Futures’ CEO Adam Todd had the vision to create a trading platform that completely eliminates all fees. The idea was to provide the nascent cryptocurrency industry with an enterprise-grade futures exchange that would enable any trader in the world to participate in the blockchain revolution. 

Todd understood that newcomers would not only be discouraged by the lack of sufficient liquidity in the cryptocurrency market and the complexity around handling these digital assets but also by the high fees that can completely remove a trader’s edge. As a result, the British entrepreneur decided to level the playing field for the average futures trader by creating a state-of-the-art, user-friendly, and zero-fee crypto futures exchange

The current core strategy that most of the renowned cryptocurrency futures exchanges in the market use to generate profits was created around the idea that a “middleman” is entitled to a fee or commission to provide its services. For instance, an average taker fee is roughly 0.075%, so traders using 100x leverage have to pay a massive 7.50% commission of their margin on every single trade. 

As the world transitions from centralized finance (CeFI) into decentralized finance (DeFi), such an unjust business model that comes at the expense of traders is now obsolete. 

Digitex Futures operates on a winning formula where all commissions and fees are eliminated, making it easy for traders to make money using high-frequency trading strategies. For the first time ever, cryptocurrency enthusiasts can engage in highly active and short-term trades without being penalized by volume-based commissions that make it impossible to make a profit. Anyone can now take single-tick profits and losses without any edge working against them. 

Instead of taking advantage of active traders, Digitex Futures actually rewards them by removing all maker and taker fees and implementing automated market makers’ software. This breakthrough innovation fundamentally changes the blockchain industry’s dynamics, and sooner rather than later other exchanges will have no choice but to follow suit. 

While others try to catch up with Digitex Futures’ zero-fee business model, market participants are welcome to grind out consistent small profits that do not get eaten up by fees using a rapid-fire trading ladder.

Those who have not signed up yet to Digitex Futures can do so easily by clicking the link here. It is time to start making money on cryptocurrency futures whether the market goes up or down. Sign up and take advantage of the world’s first commission-free cryptocurrency futures trading platform.

Latest News

scalping profit

How to Profit from Scalping: A Winning Futures Trading Strategy

Digitex Futures
Trading
• Adam Todd
April 2, 2021

Digitex CEO Adam Todd has made his career on the back of a trading technique called scalping. It’s a highly successful futures trading strategy for short-term traders – under the right conditions. However, when the conditions are right, you can learn to win at scalping in any market. Here, Adam shares his tips and insights for how to implement your own winning scalping trading strategy. 

As a successful futures and sports betting trader, my trading style was always focused more on avoiding losing trades than on riding the winners. And the way I did that was to make my trades as short-term as possible. I discovered that the longer I held a position, the bigger the risk that my position would turn into a loser. 

There seemed to be a direct link between my success, and how little time I held a position before going flat again. The shorter the amount of time in a position, the better chance I had of that trade not being a loser. This was most likely due to the nature of my trade selection process which was to be flat for most of the time, occasionally darting in and out of the market stealing single tick profits from larger moves when momentum picked up.

My scalping strategy basically involved judging when the momentum is high enough to keep the move going for another 30 seconds. If I didn’t get at least a single tick profit within that timeframe there was no reason to stay in that trade.

Successful Scalpers Don’t Get Tied Up in Learning About the Asset

As a young pit trader, I had no idea what a Bund futures contract actually was or why it moved around so much. Later, as a sports betting trader, I wouldn’t even know the name of the horse on which I was placing and laying hundreds of bets. Yet, I would go weeks and sometimes months of full-time trading as a scalper without having a single losing day. 

Short-term scalping requires no fundamental knowledge of the underlying instrument on which you’re trading. As soon as you have entered a position you’re looking to exit it, hopefully with a one or two tick profit but willing to scratch it or lose a tick without any emotional attachment to the trade. 

This style of ultra short term, manual trading is labor-intensive and requires the full concentration and attention of the trader. You can’t be checking emails and looking on Facebook and reading random crypto trading articles while you’re scalping to win. 

Besides, you don’t need to know what’s going on out there. It doesn’t matter why a price is moving when you’re a scalp trader because whichever way it goes you’re going to be following it. 

Scalping shouldn’t be a contrary style of trading because the active approach means you can get yourself in a huge mess very quickly. The safest style of scalping is simply following the price, jumping in when momentum is at its highest and then getting out quickly. 

It’s actually better to have no opinion or knowledge of the long term price direction of the underlying instrument so that it doesn’t affect your ability to go against that opinion in these short term scalp trades.

How Fees Ravage Profits

The scalping style of trading described here is the easiest to learn, requires no specialized knowledge about the underlying instrument and will give you steadier, less volatile results. But the big problem is that this style of trading is particularly susceptible to the ravages of the maker and taker fee model of crypto futures exchanges. 

It was possible for me to successfully scalp trade traditional futures markets in this manner because the futures tick value of one tick on the Bund was 25 Deutsch Marks and the commission to buy and sell one futures contract was less than 3 Deutsch Marks and I got a scratch trade rebate every time I bought and sold at the same price. 

All I had to do was make one tick for every 10 round turns to break even, and anything I made over that was profit. It was a lot harder than it sounds. But it was possible because the commission fee to buy and sell one futures contract was one-tenth of the value of one tick. 

However, the taker fee model used on every other crypto futures exchange has established commissions that are astronomically high. Currently, my style of short term scalping to win is literally impossible. The commission cost of buying and selling one futures contract with a taker order is more like ten times the value of one tick. 

That’s absolutely crazy. It’s literally impossible to beat odds like that running against you. At the exact moment you enter a trade, you’re ten ticks offside already. There’s a built-in mechanical edge that you cannot beat, and which guarantees you will lose over the long run. 

On Bitmex, the taker fee is 0.075% of the notional value of the underlying instrument. That may look small, but if you’re trading with 100x leverage that’s actually 7.5% of the margin you put down to enter the trade. If you exit the trade with a Taker order then your trading fees are 15% of the order value! 

For example, total fees on a $1,000 trade with 100x leverage are $150 [100 x $1,000 x 0.00075 x 2]. How can you ever expect to beat a 15% edge working against you?

A typical trade for a short term scalper might go like this: the price starts moving fast so I enter a trade quickly with a taker order that either smash the bid or lifts the offer. Then I immediately place a maker order to join the bid or offer to get out. If it’s not filled within seconds then I’ll cancel that and lift the offer or hit the bid with another taker order to exit the trade. 

I entered the trade with a taker order so now I need to make ten ticks just to break even. And if I exit the trade with a taker order I’ve got to make 20 ticks profit just to break even. That’s just impossible for a short-term scalp trade. 

I can still place trades as maker orders only but it’s impossible to trade profitably when you’re limited to only maker orders. This is especially true in very volatile markets – like crypto – and you will constantly not be getting filled on the good moves. 

Simply put, the maker fee and taker fee model generate large commissions for the exchange and makes it impossible for profitable short-term scalping. A huge number of traders are unable to participate and the massive liquidity they would provide is suffocated by the exchange’s need to charge high fees on turnover. 

As a scalper, I shouldn’t be paying a percentage of the notional value of the underlying instrument. I’m providing liquidity and should be encouraged, not squeezed out of the market entirely.

How Digitex Enables Profitable Scalp Trading

The Digitex Futures exchange is a short-term trader’s paradise. With absolutely no trading fees of any kind on taker orders, traders are free to pursue day trading futures strategies like scalping that are not viable anywhere else, creating massive liquidity in the process. 

That liquidity isn’t constantly drained by the exchange in the form of commissions. Instead, it continues to churn around in the trading ecosystem until it is won by the better traders. As a result, the chances of becoming a winning scalp trader on Digitex are far higher because we’re not siphoning off commission fees as percentages of the notional value of traded contracts. 

The viral marketing potential of a futures exchange that doesn’t have any built-in mechanical edge working against its traders is massive. The effective deployment of user-generated content combined with viral marketing techniques is starting to create a very large and active userbase, further increasing liquidity. 

Living a Traders Dream

Successful trading is a dream of many millions of people and Digitex wants to help make many of those dreams come true. We hope that many thousands of people will experience the unbridled freedom and excitement of becoming a profitable short-term trader who gets to live a lifestyle that most people will only dream of. 

Imagine if you can consistently make $50 a day or $200 a day or $500 a day from trading? How much would that change your life and the lives of everyone around you for the better? 

If you want to start implementing your own successful scalp trading strategy with zero fees, sign up for an account now and start living the trader’s dream.

April 2, 2021
Digitex Futures
Trading

How to Profit from Scalping: A Winning Futures Trading Strategy

Adam Todd
scalping profit

Digitex CEO Adam Todd has made his career on the back of a trading technique called scalping. It’s a highly successful futures trading strategy for short-term traders – under the right conditions. However, when the conditions are right, you can learn to win at scalping in any market. Here, Adam shares his tips and insights for how to implement your own winning scalping trading strategy. 

As a successful futures and sports betting trader, my trading style was always focused more on avoiding losing trades than on riding the winners. And the way I did that was to make my trades as short-term as possible. I discovered that the longer I held a position, the bigger the risk that my position would turn into a loser. 

There seemed to be a direct link between my success, and how little time I held a position before going flat again. The shorter the amount of time in a position, the better chance I had of that trade not being a loser. This was most likely due to the nature of my trade selection process which was to be flat for most of the time, occasionally darting in and out of the market stealing single tick profits from larger moves when momentum picked up.

My scalping strategy basically involved judging when the momentum is high enough to keep the move going for another 30 seconds. If I didn’t get at least a single tick profit within that timeframe there was no reason to stay in that trade.

Successful Scalpers Don’t Get Tied Up in Learning About the Asset

As a young pit trader, I had no idea what a Bund futures contract actually was or why it moved around so much. Later, as a sports betting trader, I wouldn’t even know the name of the horse on which I was placing and laying hundreds of bets. Yet, I would go weeks and sometimes months of full-time trading as a scalper without having a single losing day. 

Short-term scalping requires no fundamental knowledge of the underlying instrument on which you’re trading. As soon as you have entered a position you’re looking to exit it, hopefully with a one or two tick profit but willing to scratch it or lose a tick without any emotional attachment to the trade. 

This style of ultra short term, manual trading is labor-intensive and requires the full concentration and attention of the trader. You can’t be checking emails and looking on Facebook and reading random crypto trading articles while you’re scalping to win. 

Besides, you don’t need to know what’s going on out there. It doesn’t matter why a price is moving when you’re a scalp trader because whichever way it goes you’re going to be following it. 

Scalping shouldn’t be a contrary style of trading because the active approach means you can get yourself in a huge mess very quickly. The safest style of scalping is simply following the price, jumping in when momentum is at its highest and then getting out quickly. 

It’s actually better to have no opinion or knowledge of the long term price direction of the underlying instrument so that it doesn’t affect your ability to go against that opinion in these short term scalp trades.

How Fees Ravage Profits

The scalping style of trading described here is the easiest to learn, requires no specialized knowledge about the underlying instrument and will give you steadier, less volatile results. But the big problem is that this style of trading is particularly susceptible to the ravages of the maker and taker fee model of crypto futures exchanges. 

It was possible for me to successfully scalp trade traditional futures markets in this manner because the futures tick value of one tick on the Bund was 25 Deutsch Marks and the commission to buy and sell one futures contract was less than 3 Deutsch Marks and I got a scratch trade rebate every time I bought and sold at the same price. 

All I had to do was make one tick for every 10 round turns to break even, and anything I made over that was profit. It was a lot harder than it sounds. But it was possible because the commission fee to buy and sell one futures contract was one-tenth of the value of one tick. 

However, the taker fee model used on every other crypto futures exchange has established commissions that are astronomically high. Currently, my style of short term scalping to win is literally impossible. The commission cost of buying and selling one futures contract with a taker order is more like ten times the value of one tick. 

That’s absolutely crazy. It’s literally impossible to beat odds like that running against you. At the exact moment you enter a trade, you’re ten ticks offside already. There’s a built-in mechanical edge that you cannot beat, and which guarantees you will lose over the long run. 

On Bitmex, the taker fee is 0.075% of the notional value of the underlying instrument. That may look small, but if you’re trading with 100x leverage that’s actually 7.5% of the margin you put down to enter the trade. If you exit the trade with a Taker order then your trading fees are 15% of the order value! 

For example, total fees on a $1,000 trade with 100x leverage are $150 [100 x $1,000 x 0.00075 x 2]. How can you ever expect to beat a 15% edge working against you?

A typical trade for a short term scalper might go like this: the price starts moving fast so I enter a trade quickly with a taker order that either smash the bid or lifts the offer. Then I immediately place a maker order to join the bid or offer to get out. If it’s not filled within seconds then I’ll cancel that and lift the offer or hit the bid with another taker order to exit the trade. 

I entered the trade with a taker order so now I need to make ten ticks just to break even. And if I exit the trade with a taker order I’ve got to make 20 ticks profit just to break even. That’s just impossible for a short-term scalp trade. 

I can still place trades as maker orders only but it’s impossible to trade profitably when you’re limited to only maker orders. This is especially true in very volatile markets – like crypto – and you will constantly not be getting filled on the good moves. 

Simply put, the maker fee and taker fee model generate large commissions for the exchange and makes it impossible for profitable short-term scalping. A huge number of traders are unable to participate and the massive liquidity they would provide is suffocated by the exchange’s need to charge high fees on turnover. 

As a scalper, I shouldn’t be paying a percentage of the notional value of the underlying instrument. I’m providing liquidity and should be encouraged, not squeezed out of the market entirely.

How Digitex Enables Profitable Scalp Trading

The Digitex Futures exchange is a short-term trader’s paradise. With absolutely no trading fees of any kind on taker orders, traders are free to pursue day trading futures strategies like scalping that are not viable anywhere else, creating massive liquidity in the process. 

That liquidity isn’t constantly drained by the exchange in the form of commissions. Instead, it continues to churn around in the trading ecosystem until it is won by the better traders. As a result, the chances of becoming a winning scalp trader on Digitex are far higher because we’re not siphoning off commission fees as percentages of the notional value of traded contracts. 

The viral marketing potential of a futures exchange that doesn’t have any built-in mechanical edge working against its traders is massive. The effective deployment of user-generated content combined with viral marketing techniques is starting to create a very large and active userbase, further increasing liquidity. 

Living a Traders Dream

Successful trading is a dream of many millions of people and Digitex wants to help make many of those dreams come true. We hope that many thousands of people will experience the unbridled freedom and excitement of becoming a profitable short-term trader who gets to live a lifestyle that most people will only dream of. 

Imagine if you can consistently make $50 a day or $200 a day or $500 a day from trading? How much would that change your life and the lives of everyone around you for the better? 

If you want to start implementing your own successful scalp trading strategy with zero fees, sign up for an account now and start living the trader’s dream.

Latest News