Trader Interview – ETFdeniedbot

ETFdeniedbot has been BitMEX’s top performing trader this year. Active since March, he has achieved a return on his capital at BitMEX of 23225.66%. He did not just have one lucky win at 100x – he has consistently hit it out of the park. It is rare to find such a trader. We reached out to him and he kindly agreed to an interview. Keep an eye out for him in the Trollbox as he is often active.

1. How did you get started in trading and on BitMEX?

I bought into bitcoin at the end of 2013, but only started actively trading it a bit over half a year ago. Moved over to BitMEX at the start of March right before the ETF decision since I needed a lag-free place to trade. I only started being a profitable trader after the ETF had blown over.

2. I notice that you did not start with a large amount when you first signed up with BitMEX. Do you think the size of your initial capital matters when you start out?

The initial capital size can change some of the strategies available to you. In general, having less means you can hold your positions open for a smaller time period and still make a good profit. However, it also comes down to how much capital you actually have. Even if the money is something you can afford to lose, as long as the sum is a non-trivial amount it’ll be hard to cut your emotional ties to it. Especially since it’s likely you will lose at least 50% of it before starting to make a consistent profit (I lost pretty much all of mine and had to invest more.) So in my mind, the initial capital is less like an investment and more like a cost for a lesson in trading.

3. What were your motivations to start trading?

Well obviously there’s the money. I was already invested into bitcoin and figured it would be a cool idea to try to double or triple the amount. After passively watching the charts for years I thought I had a handle on bitcoin and could try to predict the price. Gave it a shot and lost quite a bit and then tried to win it all back like a true addict.

4. Why do you like trading on BitMEX?

Initially I picked BitMEX cause of the high leverage allowed and some comments on Reddit. Nowadays I’m not sure what there isn’t to like. High volume, high liquidity, low fees all around, isolated leverage, secure wallet, good customer support, no nazi-mods in the trollbox. You even refunded those liquidations caused by the GDAX downtime and subsequent flash crash out of your own pockets. Plus the UI is nice.

5. What are the key things you look for when placing a trade?

Big moves downward and high volume combined with big long liquidations. Then I just market buy and either dump my position after a small retrace up within minutes or keep buying if the price isn’t going up yet. Usually after many hours of dropping there’s a double bottom combined with a retrace going higher than the previous high. If that happens I try to keep my position open and wait for a good top to sell within the next hour or two.

6. How do you manage your risk?

I start buying small and then increase the position as it goes deeper, but trying to always stay below 5x. I don’t use stops and I only try to sell at a local top. Sometimes it gets pretty sweaty and I have a lot of unrealized losses but usually the trades end up at least breaking even. If things get really bad I might panic sell a bit of my position just to feel better, but I found that’s usually right at the bottom. Barring any black swans, it’s unlikely the price will tank more than 10% in one go without a retrace, and when the retrace happens I just dump it all regardless of losses.

7. What would be your advice to novice traders starting out on BitMEX?

a) Everyone has to find their own way to trade. Whether it’s short-term or long-term, buying or selling. What indicators, risk-levels, and leverage to use. Experimenting with different strategies will help you find your style.

b) You have to know when to be bull-headed and when to eat the loss. I’ve made plenty of bad or questionable trades but got out unscathed by just holding them open. On the other hand, an early stop-loss can save you a lot of headache and minimize the losses, while also allowing you to enter at a better price.

c) Very often the best trade you make is the one you don’t. If you have no clue what the market might do, then you may as well be flipping a coin by entering the market.

d) Any losses you take have to be accepted, and more importantly don’t try to win it all back by taking more risks. Additionally, if you lose a lot and start to tilt, it’s time to take a break.

e) Ignore your emotions. Don’t FOMO, don’t panic sell. There’s always a local top or bottom to enter at if you really want to, but usually it’s better to just sit it out if you missed the run.

f) Don’t gamble with 10x+ leverage.

g) If you really do want to gamble all-in, stick to 25x with a manual panic close if it’s not going your way. (This only works with position sizes up to 25k with XBTUSD though.)

Thanks for your time, truly an inspiration!