Synopsis
In a recent Live Stream, seasoned crypto trader Saketh shared invaluable insights into the fundamentals of trading bullish spreads. The session was geared towards helping both novice and experienced traders navigate the complexities of the crypto market with ease and confidence.
In a recent Live Stream, seasoned crypto trader Saketh shared invaluable insights into the fundamentals of trading bullish spreads. The session was geared towards helping both novice and experienced traders navigate the complexities of the crypto market with ease and confidence.
Starting Simple: The Basic Bullish Spread
Saketh stated the concept of a basic bullish spread, a fundamental strategy for those expecting a rise in market prices. He highlighted the importance of grasping simple adjustments and risk management techniques before advancing to more complex trading strategies.
Trade Execution and Planning
Using his own wallet as an example, Saketh demonstrated the process of creating a bullish spread for Bitcoin, focusing on options expiring on August 2nd. He carefully selected the $63,000 put option to short and the $62,500 put option to purchase, explaining his rationale based on market trends and liquidity considerations.
Risk Management and Capital Utilization
A significant portion of the session was dedicated to risk management. Saketh highlighted the importance of not risking more than 5-10% of one’s capital on a single trade. By using only 0.1 BTC, he illustrated how traders can limit their risk while still maintaining the potential for profit.
Calculating Risk and Reward
Saketh’s approach involves a meticulous calculation of risk and reward. With a potential profit of $17 against a risk of $32, he outlined a risk-to-reward ratio of approximately 1:2. Despite this seemingly unfavorable ratio, he stressed the importance of factoring in market trends and statistical probabilities, which, in this case, suggest a greater than 70% chance of the market ending above $63,000.
Crypto Tracker
TOP COIN SETSNFT & Metaverse Tracker2.90% BuyCrypto Blue Chip – 52.54% BuyDeFi Tracker2.25% BuyAI Tracker0.00% BuyWeb3 Tracker-0.53% BuyTOP COINS (₹) Solana16,015 (2.63%)BuyEthereum280,830 (2.31%)BuyBitcoin5,804,084 (1.9%)BuyBNB49,433 (1.42%)BuyTether84 (0.0%)BuyMeanwhile, Saketh advised investors to refrain from making immediate trades based solely on the day’s lesson. Instead, he encouraged them to wait until they have a comprehensive understanding of risk management, margin utilization, and other critical aspects of trading.
Did you Know?
The world of cryptocurrencies is very dynamic. Prices can go up or down in a matter of seconds. Thus, having reliable answers to such questions is crucial for investors.
View Details »(Note: This article is for educational purposes only and is based on Bitcoin data as of July 24th)
(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of the Economic Times)
