Good day everyone! This time, I will have the topic about Shorts cryptocurrency trading and working through the SmartTrade terminal at 3commas. Some people do not understand the difference between opening short positions, selling coins on time for a profit, and simply sell and buying coins back. I myself, to be honest, did not immediately get what mean the classic Short is and what is the difference between buying back crypto at a lower price. I want to talk about this in this video. Let’s start.
How to sell cryptocurrency profitably
Consider the option when you have already bought crypto and want to sell it profitably. To do this, it is better to use the function in SmartTrade – Smart Sell: you plan when to sell the coins you have already. For example, you bought and hold BTC for several months and decided that the time has come to sell it. You can, of course, just sell at the market price, but you will lose part of the profit. So it is best to sell with specific conditions for maximum profit.
Go to the 3commas website, open the SmarTrade terminal, select USDT market and a pair, for example, USDT_BTC, and switch to the Smart Sell tab. Specify the number of tokens to sell or set the maximum amount. In the “Buy Price” field, enter the purchase price of Bitcoin – this does not mean that you will buy it again! You just let the system know at what price you once bought the BTC. This is necessary to predict profit or loss in percentage terms in the future.
Set Take Profit by clicking on the “Set Take Profit” radio button. Select a selling price with a profit, for example, + 5%. In the type of orders, indicate “Limit order” (with it, the commission per trade is cheaper). Set Stop Loss by clicking on the “Set Stop Loss” switch, for example, -3%. Leave the order type for Stop Loss as “Market Order”. Click on the “Create Trade” button and then confirm by clicking on the “Confirm” button. And it remains to wait for the execution of your order and then the deal results.
How to sell and buy back cheaper crypto
In order to profitably sell and then buy back the cryptocurrency, 3commas offers the Smart Cover tool. Here are three options for events why you need it. The first is to reduce some of the losses from a losing coin that is falling (you are in Long). However, you are confident that this crypto will start growing again in the future. At the same time, you do not want to sit and wait, but get a part of the profit right now. That’s what “Smart Cover” of 3commas is for.
Second, you use “Smart Cover” when you close a profitable Long trade, wait for the price to fall, and buyback coins again for the next resale with a profit. Third, you are an investor and hold tokens all the time, but you want to sell and buy back at a lower price. In Smart Cover, the sale is immediately active, and the purchase is possible after a successful sale. By the way, if you are interested in Short bots instead of manual trading by Smart Cover, these bots also have in 3commas.
Let’s say you bought Bitcoin at 9000 USDT and it drops to 8500 USDT. To reduce losses, go to SmartTrade, select the USDT market, USDT_BTC pair, and the Smart Cover tab. In the “Units” field, indicate the amount to sell 1 BTC, and in the “Sell Price” 8500 USDT. In “Set Take Profit” we indicate the price to buy back BTC, for example, 8000 USDT. In the “Set Stop Loss”, we indicate the price at which you will close the deal in the negative if Bitcoin starts to grow, say, 8700 USDT.
How to make money on the fall in the price of crypto
Another example of Smart Cover with the sale and subsequent buyback of the same coin. In the first part of the video, I already said that we use “Smart Sell” for smart selling. But if after a profitable sale you would like to buy back the same crypto after their fall or rollback, then you should use “Smart Cover”. For example, you bought Bitcoin at 9000 USDT and think that the price will go up to 9500 USDT, but then it will fall to 9300 USDT and continue to rise.
In Smart Cover, in the “Units” field, we indicate the amount to sell 1 BTC, and in “Sell Price” 9500 USDT (remember that you bought Bitcoin earlier at 9000 per coin). In “Set Take Profit” we indicate the price at which you want to buy back BTC, for example, 9300 USDT. In the “Set Stop Loss”, we indicate the price at which you will close the deal in the loss if Bitcoin starts to grow back, say, 9700 USDT, but if you don’t want to risk, we don’t set Stop Loss. Click on “Create Trade” and then on the “Confirm” button. That’s all.
I also want to tell you more about the difference between buyback coins, selling with profit, and classic Short deals (trading on a market fall). So, buyback coins you had before are normally for a spot market, when you are an investor of a token and keep it for the future, but want to increase the number of tokens in the case of a market fall. Or you are trading the crypto in Long (for a rise in price), and when the price falls, you buy back cheaper to reduce the loss.
The difference between short deals and buyback crypto
But there is one important thing here. You need to be sure that the coin will grow in the future. Otherwise, if the token in the spot market constantly falls without growth, you will only lose money. For this reason, you should not keep shitcoins, so trade and hold only the TOP 30 coins from coinmarketcap. But if you are trade shitcoins, then be sure to use Stop losses in order to close unprofitable deals in time. Because in this case buyback and positional trading are inappropriate.
Selling coins at a profit or fixing a profit is a Long position, both in the spot and in the futures market. You buy cryptocurrency, wait for it to grow, and then sell it at a profit. You can wait for the token to fall in price again, buy it cheaper and sell it again at a higher price. Or, after taking profit, you see that the price continued to rise, you enter the trade again and, before the fall, take profit and close your Long deal.
Classic Short crypto position or trading on a market fall. Attention! This is the most difficult and risky type of trading, and to use it, you need trading experience of at least several years. Only available in the leveraged futures market or the margin spot market. It is possible to earn here even if the coin falls without rollback or if it drops just by a few percent. It is like to borrow some coin with an increased loan deposit.
Next, need to sell at the right time, and then if the price falls, buyback, the same amount of crypto back to the exchange and take the difference from the profit for yourself. The very scheme of earning on Short positions is risky, not to mention leverage when your positions can be liquidated. Therefore, you need to be able to analyze the market and set Stop Loss. Separately about Short positions and bots of 3commas on margin and futures, see the corresponding video – Futures and Margin trading bots.
The video about Short in crypto trading is finished. I told you about short positions, buying out, and how to make money on the fall (dropping) of the cryptocurrency market. Keep in mind that opening Short positions is difficult and should only be done by experienced traders. For beginners, much better and easier fixing Long positions (on time and profitable to sell the crypto) is suitable, or after a fall, buyback coins cheaper. So until new videos on botcryptotrade.com