Saturday Trading - Fun With Futures
Spicing Things Up
Trading futures can be a lot of fun, but it can also be extremely stressful, which is why I have spent a lot of time developing a low-risk spot trading strategy. That being said, futures trading definitely has its benefits. Firstly, modest capital can become powerful, and secondly, it keeps you in touch with the market. You cannot trade futures without being in step and connected to the market.
Leverage amplifies price action, and so being knowledgeable and well-informed is imperative. Trading futures requires a thorough and deep understanding of the particular market or asset being traded. This is primarily why I have chosen to exclusively trade Taraxa… at least, for now. It ensures focus and keeps me in touch with the price action and market behavior.
I spent much of Saturday trading futures. MEXC did a good job of baiting me with a free trading bonus. It wasn’t long before I had deposited some additional capital, and began experimenting with a few ideas. I was able to grow my trading capital by 100% on the first day. However, a few complications today resulted in a net profit of 20% for the weekend… although Sunday is still in play.
I initially traded with 30X leverage but eventually reduced it to 20X. It has been somewhat of an experimental weekend, which has managed to pique my curiosity, as to whether I should perhaps look to devising a futures strategy to trade alongside my spot strategy. Ultimately, enhancing my game, as I mentioned earlier. I guess much will depend on how profitable Sunday turns out to be.
I am currently building long-term leveraged positions, but the risk profile of this particular strategy is significantly lower with a multi-year time horizon. Trading futures with high leverage is pretty fast-paced, and things can go very wrong very quickly. Choosing to adopt a futures strategy as well as a spot and leveraged strategy comes down to one thing… stress!
I find working with high leverage very intense, and often quite stressful. As I mentioned, today’s results will reveal a lot, along with a little more experimentation. I don’t want to overextend myself and then underperform on all three fronts. Obviously, the gains are attractive, but they don’t come stress-free. I have enjoyed a number of successful trades over the weekend.
Many of these trades took place in an hour or less. Trades that gave me a hard time took somewhat longer. Usually between three and six hours. Another deterrent to futures trading is a demand for your time and attention. Once you open a futures position with 25X leverage you can’t just walk away. You have to remain at your screen until the position is closed… and that can sometimes be quite limiting, as well as stressful.
Once again, reward is tied to risk. Sometimes a trade can unfold with little to no effort. However, there are also occasions that literally exhaust you, both physically and mentally. I will be weighing up this avenue, and whether or not I want to expose myself to this heightened level of stress. Sometimes less is more. If you spread yourself too thin, you stand the risk of reducing your efficiency.
Final Thoughts
This is true even though there are now more potential gains on the table. It’s a decision I will carefully consider… and even test run for a limited period. We will see how it goes. Anyway, the market never sleeps. I’ll catch you in the next one! Have a profitable week!
Disclaimer
First of all, I am not a financial advisor. All information provided on this website is strictly my own opinion and not financial advice. I do make use of affiliate links. Purchasing or interacting with any third-party company could result in me receiving a commission. In some instances, utilizing an affiliate link can also result in a bonus or discount.
This article was first published on Sapphire Crypto.