Trading Crypto Futures – How I secure A Double Whammy Effect

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14 Mar 2024

A Profitable Passion
I love the feeling that comes with closing a profitable trade, and with futures trading that happens a lot more frequently than simply trading spot. Since futures trading involves leverage, modest market moves can generate significant gains. It all depends on your risk appetite. As I have mentioned numerous times over the past year, I have developed a great strategy that generates healthy gains, while simultaneously being somewhat low-risk.
Strong risk management and modest leverage are at the heart of this strategy. Currently, I am trading on 3X leverage, and enjoy the low-stress environment. There is nothing worse than having to defend a position that is clearly overleveraged and has subsequently become a burden. This strategy enables me to sleep at night. Especially, since there are numerous countermeasures in place, in the event of a flash crash.
There is however an additional “tool” I make use of to increase my profitability in a bull market, and that is to use Crypto as my collateral, as opposed to USDT. Most trading platforms offer Crypto pairs with USDT as the underlying collateral. However, on Bybit, I can trade the price action of a pair such as DOT/USD with the underlying collateral being supplied in the form of DOT.
This is an incredibly powerful approach in a bull market, due to your collateral increasing in value together with the overall market. Essentially, traders are now earning profits based on the price action of their Crypto asset of choice against the dollar and profits regarding the price appreciation of their collateral, which is in the form of Crypto. Essentially, a bull market trader void of this strategy is quite simply, missing out.
As I mentioned, Bybit is my go-to exchange for this particular strategy. There are several blue chip altcoins available to trade on inverse contracts, such as BTC, ETH, XRP, and DOT, to mention a few. This is an incredible strategy for growing your altcoin bags. If you are a seasoned trader, this can be incredibly lucrative, especially over a 12 to 18-month period. Crypto investors should have an arsenal of bull market strategies, and this is one of the best.

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Final Thoughts
A simple enhancement like the abovementioned strategy can bring the power of compounding to your portfolio, and should not be overlooked, especially by experienced traders. In a matter of five weeks, I have been able to increase my DOT trading collateral quite significantly, regarding the actual coin allocation. Coin holdings are up by 95% with a dollar valuation increase of 155%, which is pretty decent when you consider that DOT hodlers are up 45% in the same timeframe.
I view this strategy as a staking alternative. I lock up tokens in a trading account and then increase those holdings over time. It’s like an “active staking strategy” with significantly higher returns. Of course, the risks remain. However, as I mentioned, risk management is at the heart of this strategy with liquidation being a very unlikely scenario. Anyway, enjoy the bull market, and happy trading! See you next time!

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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.