Original subtitles

hello how's everybody doing today

so this is the very final lesson video

for where

we are going to finish the most

important fundamentals

um part of this particular section

before we actually move on to the charts

and indicators

so how's everybody doing today i hope

you guys have had a fantastic day

trading so far

and most importantly i hope that you

guys have had an amazing time

during these lessons and most

importantly i hope that you guys have

taken

a lot away from these so far so so far

we have covered the introduction class

which had the terminologies

which you guys should be very

comfortable with now speaking to me

in this particular language in lesson

number two

we were talking about what separates

superstar status

from mediocre and that had a lot to do

with talking about emotions

risk management and trading like an

actual casino right

in lesson three we talked about dollar

cost averaging

and laddering your buys and that's the

process of making sure

that you don't actually purchase

everything for one specific

price point as the price drops and

you're very confident that it's going to

get very much so

near the support level you want to

ladder those buys

very slowly and effectively this way it

gives you

some of the best possible average prices

and you're not trapped in one specific

section and then we talked about reading

level two order books understanding bids

and ask

the level two order book is simply the

order book

the biz are the people that are buying

and the ask

are the people that are selling and we

were talking about how

momentum changes can swing very quickly

based on what we're looking at in the

level two order book

and the level two order book gives us

the best real gauge

and real momentum time swing so now

for welcome to lesson five guys this is

an incredibly

important class that we're going to talk

about

alright so let's get into lesson five

which will be

on the topic of the dangers of

leveraging which i'm sure you guys have

all seen on many exchanges before and

we're also going to be talking about

shorting and we're also going to talk

about what going

long means so you guys always hear of

the definitions of going long

and going short and i just want to

clarify some of the definitions between

them

and it's a very important psychological

factor to retain okay you guys have to

know that

there are bears and there are bowls okay

there's so many exchanges guys and i

need to tell you right now

that it's very dangerous okay to

leverage

the last thing you want to do is

leverage okay if especially

if you are a newer trader remember i've

been talking

many times before about how we should

focus on

making good trades the last thing that

we actually want to do

is focus on making profit the profit

will come

really really naturally guys and i don't

want to see you guys

fall into you know this pattern

and become a victim of getting something

called liquidated

getting liquidated is one of the

scariest things that can happen

i've been liquidated so many times

before on poloniex in my very

very very early career okay and there's

something called

margin call and a margin call comes up

when you simply don't have enough money

to pay back the exchange

so what they end up doing is they close

your position

which we're all going to get into the

math okay the math is

really important behind it and you guys

need to understand the math

because you need to understand the risks

associated

with leveraging i really don't recommend

leveraging once again guys

and i don't recommend it to anybody

whatsoever

no matter what circumstance you're in i

do not recommend

leveraging at all okay the only reason

why i leverage

on bitfenix is because one i'm a very

experienced trader

and two leveraging to me is honestly as

normal as it is playing in the normal

stock market because the math is

all done in my head like that and i

don't leverage

because i need to borrow money right

leveraging basically refers to let's say

you have a thousand dollars okay and

we're going to go over the math in high

high detail trust me this is just to

give you guys a

really quick breakdown so let's say you

had a thousand dollars to play

on some exchanges like for example

bitfinex

or even on poloniex they allow you to

leverage

3.3 times so if you actually had a

thousand dollars only to play

they will actually allow you to play 3.3

times

whatever you have say of a thousand

dollars

so a thousand of 3.3 is 3

300 now doesn't that seem

tempting right doesn't it seem really

tempting

to be able to play with way more money

than you

actually have yes definitely

it does who does it benefit the most

well

it actually benefits the exchange the

most because

you're paying more fees all right

keep in mind you're paying more fees and

there's literally no

risk to the exchange at all

and where does the money come from we

also have to talk about all these

factors as well

so let's get into leveraging and talk a

lot

about what it actually refers to okay

now i'm just gonna find like a blank

screen here so i can write on here for

you guys

this way i like to write on this screen

it makes a lot more sense to write on

this particular screen

than to maybe go somewhere else if you

know where what i mean right okay let's

find ourselves a really nice blank

screen here

so let's say that we're talking about

leveraging all right let's get into this

in very high detail

so please pay attention this is one of

the most important

things to remember and the most

important thing to take away from this

particular video is do not leverage

guys if you don't need to leverage don't

do it the only reason i do it on

bitfenix is because i

short the market which is something

we're going to go over

in very very high detail here okay

what the definition of shorting what the

definition of going

long actually means as well and all the

risks associated with it

and the reason why i personally leverage

is because it's as

plain to me and as normal to me as

playing in the normal

exchange market right so whether i'm

i could be playing for example 10

dollars of my own money

or i could be playing three thousand

dollars which is multiplied by three

point three

because the math is done in my head

instantaneously and i'm super familiar

with all the risks associated with it

the reason why i do it the main number

one reason is only because of this guys

is because it actually shows my position

on bitfenix that's right it shows my

position

my profit and my losses on bitfenix

whereas if you play in your normal

exchange account

you actually don't have any type of

realization

or profit or loss realization whatsoever

so let's get into this in really high

detail guys i'm super excited to tell

you about it

but i need to make sure that i maintain

a very serious tone

because i don't want you guys to get

caught up in thinking hmm

i can actually play with a lot more

money because

hey i can actually leverage there's some

exchanges like bitmex right

b i t m e x that lets you leverage 100

times okay so if you only had a thousand

dollars

you can actually play 100

dollars instead of your one thousand

dollars right

that's multiplied by a hundred but what

are the risks

the risks are incredibly serious and you

guys need to make sure that you're

paying attention in this video

and you need to make sure that you

understand all of the risks

i show associated with playing in a

leveraged

market and especially if you're going to

short as well okay

so let's say you are going long first of

all

all right let's see let's excuse me here

for example

actually you know what let me pull up my

bitfenix first okay

let me pull up my bitfenix here and let

me go to

this page that you guys might not

actually even realize

exists if you go to pretty much

almost any exchange to be honest they

anywhere that allows you to leverage

they will actually have something here

called funding

okay now i don't have anything

personally

up in the funding myself right now

usually i do but i disabled it for the

purpose of this video okay

so what is the funding page

okay let me explain it to you guys in

high detail

so what the funding is is excuse me i

have to cough very quickly i apologize

sorry about that so what is the funding

and what is it

used for okay so what the funding is

used for

is let's say you had a lot of capital

right

you you had a very big balance a big

bank roll

what you would want to do is you would

want to actually

put it into the funding now what do you

do with the funding

it basically sits there think of it as

compound

interest every single day it's actually

going to gain

a fixed percentage every single day

so if you were to actually fund this so

for example if you go to the funding

here

it actually gives you the percentages

right

it gives you the percentages so what we

see right now

is the british pound right it's you're

getting actually a really

huge huge boost right now and you're

gonna gain if you put in

for example ten thousand dollars you're

going to gain

at a compound interest rate of

seven percent a day right so you know

that's how much you would gain

so the us dollar right now you would

actually gain

point zero nine percent per day if you

were to add

your money to the funding and the reason

why

they want you to do this right is

because well if you

play in a margin account right

a margin account refers to an account

that actually allows you to leverage so

leveraging

lets you play much more than you can

actually

then you actually have right and now if

you play in a margin account

the exchange themselves they actually

charge you a fee per day

right they charge you a fee per day to

actually

borrow money from that margin account

well where does this

extra money come from hmm think about it

guys

if there's people that's contributing to

the funding

right if they're contributing to the

funding

then the people who are playing from the

margin account

are actually borrowing money from the

funders

does that make sense so the exchange is

actually not

borrowing you money you're borrowing it

from the people that are contributing

to the funder right to the funding

account so let's say i'm

contributing money to the funding

account and i have say

i don't know a hundred thousand dollars

in the funding account right

i'm actually gaining for example if it's

usd

i would be gaining point zero nine

percent

a day so if you guys actually do the

math right here right

if i have a hundred thousand dollars i'd

be gaining point

um zero zero zero nine i'd be gaining

actually

ninety dollars a day guys

it's actually pretty decent right that's

right i would be gaining

ninety dollars a day if i were to add

100

000 to the funding account i could

literally

live off of this interest for the rest

of my life

okay when you think of it like that

because times 365

a year you'd be making three hundred

thirty two thousand dollars a year right

so you're getting paid i'm getting paid

actually we'll say

if i'm putting 100k into the funding

account right it's gaining

interest every day and now what does the

what does the exchange use my money for

well the exchange uses my money

if you decide to leverage

okay and leveraging can come in many

forms it can come in

shorting and it can also come in going

long

but regardless it goes towards a margin

account okay it goes towards a margin

account that you're playing in

there are many different wallets there's

for example

a normal account that you would normally

play in and then there's a margin

account

and that's the account that allows you

to leverage which has a lot of risk

guys now i know it's very tempting once

again to want to

play with more money than you actually

have but i assure you

100 guys and look at me when i say this

i assure you with 100

that you will get liquidated okay

getting liquidated we're gonna talk all

about that okay

trust me okay so once again i contribute

to the funding account

right and if you decide to short or play

in your margin account

which basically means to leverage to

play with more money

than you actually have you are actually

borrowing the money

from someone like me who is adding to

the funding account

so now let's talk about a lot of these

definitions and where we actually stand

and what they actually mean okay it's

really important to get a very good

grasp

of how the margin accounts are actually

used all right so let's get into this

guys

so you guys all know the definition of

going long

right you know the definition of going

long which i'll write on here

for you so let's just follow along here

as well this way we're all on the same

page okay

so if you're going long for example okay

if you're going along for example right

it means

it basically means to purchase low

and hope to sell high and purchase low

with expectations to sell high

that's basically the simple definition

of going long

right you purchase something cheap and

you expect it to sell it higher

so giving you guys a very basic

definition which i'm sure you all know

already

if you purchase say 100 coins at 10

right that would be equal to thousand

dollars total right there

now if you sell your 100 coins at 11

right that's going to equal to 11 100

so what's your total profit your total

profit would be

eleven hundred minus

right one thousand dollars that makes

a lot of sense which is equal to one

hundred dollars right

so this is a super super simple

definition

of actually going long now let's talk

about it from the perspective of a

leveraged

long example okay now this is going to

be

a little bit more complicated so make

sure that you guys are 100

paying attention to this because i

assure you it's going to be mind blowing

by the time we're done okay

so let's get into this example where i'm

going to use a leveraged

long example so if you purchased okay

100 coins at 10

that equals to 1 000 1 000

right just just as an example right here

but if it's leverage right

but if it's leveraged leverage three

point three x

so that's one thousand dollars okay now

let's say you only had

three hundred dollars right you only had

three hundred dollars

you only have 300

of your own money but

but leveraging lets you play 3.3 times

more right so make sure that's

understood so but if it's

leverage 3.3 x of the 1 000

right so that really means

so that really means 1 000

divided by 3.3 x is really your money

right that makes sense it's really your

money just to make sure you guys

understand that so far

so 300 is yours right so you have 300

but you're paying thousand dollars

and it's actually leveraged 3.3 times

right

so make sure that's really understood so

now that this means

this means you're actually borrowing 700

from the from the funders right from the

funders so say someone like me

in the margin account right so because

you're borrowing

700 let's say now if you sold

okay if you sold 100

coins at 11 each now

just like the above where we sold it for

right at 11

the 100 coins here right that's equal to

hundred dollars profit right i'm sure we

can all agree on that

so you guys have three hundred dollars

of

your own money okay and now

you have borrowed seven hundred dollars

because

your three hundred dollars is now

leveraged

three point three times so if you sold

100 coins at 11 each now

that would actually be up 1 100

total that you now have right so that's

the total that you have

after sale so after you sold it

you have eleven hundred dollars right

but you did borrow seven hundred dollars

right that wasn't your own money

that was not your own money as well so

you

have to actually still pay

back seven hundred dollars to the lender

right

does that make sense so far so now you

have eleven hundred dollars

minus seven hundred dollars is really

equal to

four hundred dollars that you actually

have left when you think about that

so what is your actual profit right now

that you have

400 left and you started

with 300 well the profit

is simple is 300 or sorry 400 minus 300

which is equal to 100 total profit right

well 400 um that's actually 33

if you think about it right because well

you actually profited 1.33 times right

so i hope that makes a lot of sense

because you're leveraging

great um excuse me so

if you if you think of the math right

the dollar

after selling 100 coins right at 11

each is equal to eleven hundred dollars

if the profit was

one hundred dollars and the investment

was actually we're going to write this

down to make sure it's understood

if the profit was one hundred dollars

and the original investment we call that

the principal okay

and the principal was one thousand

dollars

that's equal to a ten percent gain right

guys ten percent gain

of what you actually played right makes

total sense

but guys right but if you take your 100

of 300 right that's actually uh

33 excuse me 33 percent gain

because if you actually take your

original gain if you take your

original gain of 10 and multiply

that by 3.3

times that's 33 as well right

so make sure that you guys really

really understand this concept yes the

gains

can be incredibly astronomical all right

it could be

really amazing but now we gotta talk

about the scenario where

let's say it actually the market goes

against you right

if it goes against you how much money

can you

actually lose that's a really big

question so let's get into that too

okay let's get back into it's actually a

new day

so um i wrapped up the video yesterday

that's why i'm wearing something

completely different so you guys might

be wondering

why is he actually wearing something

different right now so we left off

with um basically learning how to long

and leverage right but we have to

understand

the risks associated with it right we

were talking earlier about

how you can leverage and borrow money

so now i want to give you guys another

example okay

let's go over another example to talk

about the risks

associated so you have three hundred

dollars you have three hundred dollars

and want to leverage

three point three times right which is

equal to one thousand dollars

total playing so total trading total

trading money put it that way okay

so you have to retain or you have to

maintain

something called 15 equity on most

exchanges

15 equity this needs to be very clear

so 15 of 1 000

is equal to 150 right

what this means okay if you were to buy

if you purchased 100 coins

at 10 which is equal to a thousand

dollars total

you can only lose

fifteen percent of that

one thousand dollars so it cannot

cannot go below below

so if each coin was one was ten dollars

right and you bought a hundred coins

it means that so it cannot go below

eight dollars

and fifty cents per coin because if you

actually take

okay if you take 100 coins

at 8 and 50 cents it's equal to 850

right which is 15

down now what happens okay if

if it actually goes down to date dollars

and fifty cents

that would be something called your

liquidation price okay

a liquidation price is the price

that the exchange will automatically

close your position right

so if it automatically closes your

position the

the really horrible thing about margin

trading

is you're not always going to be left

with 15

guys in fact a lot of the times you are

left with

so much less than that and the reason

why

you're actually left with a lot less

than that is because

you're catching the bottom okay you're

trying to catch a cell

so let's say the price actually ends up

going down from ten dollars

now it gets to eight fifty now a lot of

people

will actually be in the same position

as you guys where they also need to

liquidate

their position so you can think of all

of these people

that are going to be in a lineup okay to

to

make sure that they sell their position

because you're in a long position

you have to sell obviously to close your

position

but there might be a lot of people ahead

of you so you might not actually catch

it

at eight dollars and fifty cents make

sure that's understood

you might not catch it at eight dollars

and fifty cents exactly right

in fact you might end up catching it at

eight dollars instead

because there's not enough liquidity in

the order book

for you to close your position so if you

were to sell it at eight dollars

if you were to sell it at eight dollars

at 100 coins that's equal to 800 right

800 left but because keep in mind that

you're boring

keep in mind that you've borrowed

the other 700 right so

700 goes back

to the exchange slash funder right

and you keep what's left so

that means that you only keep 100 left

of your money that's kind of scary when

you think about it

so if you actually use bigger figures

like think about it guys okay

think about this if you're playing with

say you're playing with

three thousand dollars now okay

leverage three point three times which

is

scary at ten thousand dollars right

ten thousand dollars yeah so if it if

you bought

if you bought 1 000 coins

at 10 right that equals to 10 000

right you can only lose that you got to

maintain your 15

equity right so if it goes down if the

coin

goes down to say 850 you'll get

liquidated

right now ideally if you sold it at that

price

you'll have loss so because it's at

eight dollars and fifty cents

times one thousand coins that's equals

to eight thousand five hundred

but seven thousand was borrowed okay

that goes back to exchange

right and then you keep what's left um

so of that three thousand dollars you'll

just have left

because you're you know you're taking 8

500

minus 7 000 that goes back to exchange

you're actually left with 1 500 left of

your 3k

so you actually lost half of your money

think of it like that so think about

like this as well right

how would you lose half normally okay

if you were to lose half of your money

normally

as an example right the coin would if

you played only three thousand dollars

right

to lose half the coin would have to

drop to half its value right

so from ten dollars it would have to

drop

to five dollars for you to lose half of

your value

right so think of it like that so it's

actually very scary

when you get liquidated guys and trust

me i've been liquidated so many times

before

and well well well into the past

i have never been liquidated in the past

two years okay

never because i understand the risks

associated with it

i understand the math behind it as well

and this is something that you guys

heavily

heavily need to understand that the risk

associated with leveraging is extremely

scary guys

and i do not recommend it whatsoever to

a lot of people

because guys think about it okay

think about how much money you could

lose and how quickly

it only needs to lose drop about 15

of its value for you to lose half of

your money

because you have to keep in mind that 15

of the value whatever you're playing is

actually multiplied by a

factor of 3.3 right

it's multiplied by 3.3 so 15

times 3.3 i'm just going to get a

calculator of 15 times 3.3

is about 50 of your money so

please make sure guys that you

understand that getting rich

is not about playing with more money at

all

make sure you understand that because

the last thing that i want

is to see you guys get liquidated

and lose a lot more money than you have

to right

please remember as well that these

lessons they don't have to come

at a very expensive cost what we try to

make sure that we do

is we don't focus on chasing money okay

we focus on making

good trades and if we make good trades

then the money will come because it's

going to improve

us as a trader i'm sure that you know

if you're a really good basketball

player or a good athlete

the last thing that you want to focus on

is looking at how much money that you

make right

you want to focus on making sure that

you show up to practice

you want to make sure that you're a part

of the team you want to make sure that

you're playing the sport the way it

should be intended to

be played you want to make sure that

you're becoming a good sportsman

or whatever the word a good

sportsmanship you want to just be

a good athlete all around and then the

money

is simply a bonus do you guys think

someone like michael jordan did it only

for the money

right i don't think he did it only for

the money definitely not

he focused on become being a very good

player and everything else was just a

bonus

so guys make sure that you understand

the concept of how risky

leveraging is i know i've emphasized it

so many times already

but this is something that needs to be

addressed

in high detail because the risk is so

scary guys think about it you're only

dropping

15 percent in value for you to lose

half of your money that is some

scary stuff guys and now all of a sudden

okay if for some reason you couldn't

catch it at eight dollars

and fifty cents and you actually caught

it at eight dollars instead

well you're three thousand dollars

will actually turn into one thousand

dollars

just from a small little drop in fact

usually you end up losing a lot more

okay now i want to explain to you guys

the concept of something called a flash

crash

okay i'm going to pull up a chart here

i want to pull up a chart here for

example with a coin called metaverse

okay

i'm gonna show you guys in detail and

you're gonna know what i'm talking about

in very high detail let's go to uh

a one hour chart actually

right here okay you guys i don't know if

you guys know how to read these charts

yet

but do you see these long wicks which

we'll get into

this coin temporarily

actually dropped okay it temporarily

dropped to a nickel all the way

from three dollars and 39 cents okay

that's right guys it flash

crashed and it literally dropped to

a nickel okay now do you guys wonder

why these happen i'm going to explain it

to you guys in high detail

how these flash crashes happen it's

because a lot of people

are leveraging to go long okay

they're leveraging to go into a long

position

like how you guys might be going long

now

because the price started dropping right

it only needs to drop

15 that's all 15

until everybody starts getting

liquidated

and the exchange they just start

automatically closing people's position

so what the exchange will do to make

sure that you guys

can cover or the people who are margin

trading and they're

leveraging the people who are leveraging

and margin trading

the exchange has to pay back the funder

right

so let's say that i'm the one funding

your margin

like we're just using that 700 as an

example right

it needs to go back to me no matter what

okay

so because it needs to go back to me

since the exchange is clearly not going

to do it right

what they start to do is they

automatically start to close people's

position

but let's say there was a thousand

people that were in the same boat where

they all needed to close their position

so which means they need to sell off

their

coin that they have in this particular

case

it's metaverse right so because they

have to sell off the coins

there's obviously going to be a lineup

of people that need to sell it

and sometimes guys sometimes there's

actually

not enough liquidity there's not enough

coins that will accommodate all of these

people okay so what ends up happening is

there's this there's a cascade of a

waterfall

called a flash crash okay and when this

flash crash happens right

let's say you're in the line you're in

your number 500 of the thousand that's

in a line

waiting to sell these right let's say

that you couldn't sell it at the 15

and let's say you actually ended up

selling it

right at 30 right instead or something

like that you would have

actually lost your entire bank

roll so if you're playing with say that

3 000

instead of because you couldn't retain

that equity

and you need to sell it at whatever

price to pay back

the exchange you could actually have

lost

every single dollar in your account

now in really worst case scenarios okay

in extreme cases because you're simply

trying to

catch it right you're trying to catch

the liquidity

and you notice here everybody's trying

to sell everybody's trying to sell

because

they're in a margin position and they're

trying to liquidate their position

sometimes you will actually go into

the negative that's right into

the negative that's right hear me again

when i'm telling you guys the risk and

i'm being serious

about it that you will actually go into

the negative so if you had three

thousand dollars

right sometimes you couldn't sell enough

of them at a very decent price to stay

positive

you might be selling it right here at

the very very bottom

so because you're selling it at the very

bottom you will actually go

into the negative balance meaning like

minus 1 000

or minus 2 000 or even minus 3

000 whatever price you need to sell it

at

according to the exchange so you can pay

back the lender

that is how these flash crashes happen

because it's because of the cascading

waterfall

of people trying to basically catch the

bottom right

catch the bottom or they're trying to

sell off their position

right and sometimes you're just you keep

trying to catch it it keeps going lower

and lower

but there's simply not enough liquidity

so guys

the risk is real i'm not joking at all

so if you guys ever margin trade you

need to really understand the

the risk okay you guys want to see what

100 looks like

okay you guys want to see what a hundred

percent um

let's let's just use an example okay you

have

you have one hundred dollars right

you have one hundred dollars and one to

leverage on

bitmex for 100x well

100x times 100 is equal to how many

zeros is that one two three four

okay so hold on let's i can't even do a

hundred times a hundred i'm

slow today that's ten thousand dollars

okay

i'm right so that's ten thousand dollars

that you're playing

right but only a hundred dollars is

yours

right so even if it dropped how much

here let's take a look

times point zero one okay

so if it dropped if it dropped zero

point zero five percent which is half of

a percent right

so 0.05 percent of ten thousand dollars

is equal to fifty bucks okay

if the coin dropped fifty dollars

you would have actually been liquidated

already okay

simple as that right so if you're

playing a thousand dollars

now let's just say you're playing a

thousand dollars right

a thousand dollars so now you can

leverage a hundred grand

ooh you can leverage 100 grand okay if

it dropped 0.5

you would have actually lost 500 already

which means that if it dropped only half

of a percent

you guys would have lost half of your

money already

because you still have to pay back the

exchange and the funder

so guys leveraging is it's not cool okay

not cool at all

so when you guys see me leverage keep in

mind that i'm an experienced

trader and because i only do it because

i can actually

see the the realization the profit

and the and the losses right which

actually reflects in my balance there

whereas if you play on a normal exchange

it actually doesn't show you that

at all not only that i treat margin

trading

as normal as i treat trading on a normal

exchange account

because i understand all of the risks

and i know the math

inside out guys so if you don't know the

math

inside out last thing you want to do

guys is treat this as free money

because i assure you it's not free money

there will come a point

where you will absolutely get leveraged

you will you will get

liquidated and i hear that really often

okay guys

i'm sorry my eyes just a little bit

itchy right now a little bit dry

so the last thing i want to hear is you

guys

getting liquidated because it's bound to

happen it's inevitable

why is it inevitable because if you

don't understand the risk

and you're chasing money and you're just

simply chasing

making profit instead of making good

trades you also

clearly don't have the psychological and

and the

and the experience to understand that we

focus on making good trades not making

profit

which also implies that you're not

familiar with risk to reward ratio

very well and what a stop loss is and if

you don't have the mental discipline

to stick to your stop loss then you're

just going to try to ride it out

when you're leveraging and when you're

trying to ride it out

you will get leverage you will get

liquidated because you don't know how to

stick to your stop loss yet

simple as that so i'm trying to instill

fear

into you guys i'm trying to make sure

that my students

are not going to be one of those people

that's simply going to get liquidated

because if you get liquidated oh my

goodness

you guys are going to cry you guys are

going to cry

you guys are going to say i'll do better

next time but guess what

maybe you already lost your entire bank

roll and you may never ever be able to

start up again

because it's a lot of money guys i don't

know about you guys

but i know that a lot of my normal

friends you're you know they're making

anywhere between

two thousand to four thousand to five

thousand a month

of work are you willing to throw away

your months

of normal work in the stock market

because of your greed

to leverage and trust me guys if you're

not an experienced trader

you're not going to make it when it

comes to leveraging you don't leverage

until you get very good at trading and

you only start

very small and it's usually for fun

right it's definitely fun and you guys

need to understand as well

that you should never ever play what

you're

not willing to lose whatever money that

you guys have

online know with 100 certainty

that there's a very strong chance that

you could possibly

lose everything so know that without

risk there's no possibility of reward

don't think of crypto as something where

you're just getting into it and it's

going to be very easy money

nah it's not like that at all guys it's

going to be very hard

it's going to be tough you guys are

going to be grinding at it

to make those funds so now that we've

done leveraging and you guys

understand what that means we're now

going to talk about what shorting the

market actually means

all right so let's talk about shorting

the market

so first of all we have to define what

going long

means right and we talked about that

before

what going long simply refers to is

buying the price at a cheap price

and hoping to sell it to make a profit

and in the example that we went over for

example if we bought bitcoin

at six thousand dollars just just one

bitcoin

and we were selling it at ten thousand

dollars well the profit would be

four thousand dollars because you take

ten thousand dollars

minus six thousand dollars now i want to

tell you guys

that there's actually a way to make

money

on a down trend as well and that method

is called shorting what shorting does is

it allows you to bet against the market

now a lot of people simply think that

shorting

refers to okay the price is going to

drop i will sell whatever bitcoin or

coin that i have

and then when it gets cheaper i'm going

to buy it back

and i made money because i it's going to

go back up to that original price

and i got a chance to buy cheaper no

that does not mean that at all okay

we're going to go over shorting and i'm

going to give you guys an example from

an old video of mine for shorting

so let's go over some of the math okay

we're just going to go over bitcoin

shorting shorting to bet

against the market

um so to bet against the market

um betting it goes down okay and taking

profit on the difference in the price

so shorting is only done through margin

trading

and many exchanges actually allow you to

short just to give you guys some

examples um

i think i'm gdax allows you to short i

know bitfenix does um you know bitmex

um what else poloniex as well there are

many exchanges that allows you to short

if you guys want to play on bitfenix and

you're american

vpn guys honestly just get a vpn simple

as that right

so shorting is to bet against the market

betting that it actually goes down

instead of up

and taking profit on the difference in

the price and i will give you guys a

really good example okay

let's say that bitcoin is that bitcoin

is at ten thousand dollars okay

and you believe it's going to go down

go down so you enter a short position

okay at ten thousand dollars and you

believe

it's going to go down to nine thousand

dollars okay

so what you actually end up doing is

this okay

the process goes like this and i will go

over it in detail

the process goes like this okay you go

through your menu

okay you go through your menu of

whatever exchange you're going on

you guys have seen me short positions

many times on bitfenix so you're welcome

to review that as well

every exchange has a different process

okay you enter your short position

your short position you know how you

would buy long at 10 thousand to go long

well this is just kind of the opposite

so you enter your short position at ten

thousand dollars

now let's talk about behind the scenes

so what this means is you actually

borrowed one bitcoin okay

one bitcoin at ten thousand dollars

from the exchange to sell now

makes sense okay so what you're seeing

is you borrowed one bitcoin

from the exchange at ten thousand

dollars to sell it

now so you're borrowing this in your

margin account for someone such as

myself

who will contribute to the funding

account there right

so that's where a lot of the money comes

from it's not just from leveraging

it's also from shorting the market so

now that you borrowed

okay now that you borrowed now that you

borrowed

one bitcoin from the exchange at

ten thousand dollars you owe them

one one bitcoin now okay

so let's see let's say that btc

does go to nine thousand dollars right

and now now you buy back

the one bitcoin okay at nine thousand

dollars

right so now you you pay

back the exchange the one bitcoin

and you actually profit

the difference in price between ten

thousand dollars and nine thousand

dollars

okay so because you're actually only

working with

one bitcoin that you originally

borrowed from the exchange to sell now

at ten thousand dollars they expect you

to pay them back the one bitcoin

so if it actually goes down to nine

thousand dollars

then that means that you actually got to

buy back your bitcoins cheaper at nine

thousand dollars

right and then you pay back the exchange

the one bitcoin but hey because you

originally sold it for 10k

and you borrowed one and then you bought

it back at 9k

and you're giving them the one bitcoin

back well that's a difference

of one thousand dollars that you

actually get to keep for yourself

okay does that make sense so that's what

shorting the market actually is

so if it actually went down to eight

thousand dollars

then you would actually get to keep the

difference between ten thousand dollars

and eight thousand dollars but

what happens if it goes up right

think of going long okay let's say

you're going long

at ten thousand dollars and you're

hoping for it to go to eleven

thousand dollars well if it goes to 11k

and you're going long

you've made a thousand dollars but what

happens if bitcoin and when you're going

long from 10k actually drops to 9k well

you've lost a thousand dollars right

so let's see let's say you shorted

at 10 at 10 000

but the price goes up to eleven thousand

dollars

you're like crap i'm gonna hit my stop

loss

remember to always make sure that you

stick to your stop loss right you don't

want to lose unnecessary money

you still still have to buy

back that one bitcoin

to pay the exchange back okay but now

you're buying it back at

11 000 instead of ten thousand dollars

which is one thousand dollars more right

which means which means

you paid one thousand dollars more for

that bitcoin which means

you just lost

1 000 okay that's what it means

so if you're betting that the market is

going up

in a long position but the price

actually goes down

then you're out money but if you are in

a

short position and you're betting that

the market will go

down but it actually goes up

in price then you're actually losing

money right

so it is the exact opposite concept okay

and i'm gonna show you guys a video

right now of me

betting against the market it's a little

bit of an older video

but of course i was believing that the

price was going to go down

so i actually shorted eos and i shorted

it because i thought the price was going

to go

down and surely enough it did and then i

actually bought back

at a cheaper price i paid back the

exchange the 5000 eos that i borrowed

right and then i actually got to keep

the difference so check out this video

that i'm just about to show you guys

right now

hello everybody how's it going today

it's now march the 27th

is a tuesday and i'm about to make a

live trade here in front of you guys

i decided to short i literally just woke

up and i decided to short eos

because of many many reasons so let's

pull up some of my charts here

first of all i see that bitcoin is about

the tank here i noticed on the 10-minute

chart that's right a 10-minute chart

i see this bullishly or sort of

bearishly diverging right here

this is acting as a very hard resistance

if you guys notice here for bitcoin

right because bitcoin is about to fall

down a little bit right now it's very

safe to assume

that eos is also about to fall down so

i've now

shorted i'm in a 30 000 position right

now

i'm already up about 200 right here

okay i started shorting it from right

here i'm probably the one that started

to catalyze this process and dumped

um so yeah so we're just about to see

where it's gonna go i'm now over a

hundred dollars up right here

as you guys can quickly see right here

okay right here i've entered this trade

at about two

uh 12 15 right now and at 12 15 that's

about three minutes into this trade

right now

we've got a 6.05 wall that looks like

it's trying to hold right here

but of course bitcoin is taking quite a

beating right now

so it's also very very safe to assume

that bitcoin is simply going to fall

down

so let's take a look at what's going to

be going on here i'm just going to pull

up my bitfinix screen so we can get a

hold of here

we notice that it's falling down

extremely hard right now

lots of people are selling it off to the

ak regions we want to see if this is

going to hold right here

605 is actually being shattered right

now as we can see

it's not really holding too well i'm

just going to bring up my limit just

pretty much a little bit up there let's

go for 0.2 right here let's see if this

is going to hold

right i'm literally just right there

tiny little wall let's see let's just

keep looking at bitcoin it's holding at

63 32

got a nice little wick there that ended

up rejecting it people are buying it

back up very slowly

i might not actually take my profit here

so let's actually go

to about zero five let's go to eight

okay

zero five eight right here this might be

end up end up being a little bit more oh

[ __ ] a little bit too early right here i

gotta pull down my profit no no i don't

wanna do that i don't want to do that

okay i noticed that it's coming down

here so i will readjust right here

to 603 i took about a tiny little bit of

a profit right now

this still looks like it's trying to

come down as you guys can notice here

let's go check out on a very low time

frame this is getting completely

rejected at the 100 ema

so it's very safe to assume that it's

still going to come down

i'm up 245 dollars already super easy

trade i believe

super super easy trade yep

i'm just about to get my position filled

in about 20 seconds i'm guessing

these walls of red are very encouraging

to people to sell

so let's just keep taking a look to see

what's going to happen

come on i'm not really that much there's

not really many people in front of me

okay bitcoins now going to the 8 000

range right we see kind of more people

just selling off right here

more people are selling off 8 12 8 12

it's what it's at right now we're

getting this really

ugly candle that rejected at the 100 ema

people are slowly selling off

selling off selling off and i'm the next

guy in line right here

okay there we go i'm just about to get

my borders filled

yeah yeah baby that's how you make 375

dollars

375 dollars in four minutes

gg guys i'm going to take this

screenshot in front of you guys

and i'm going to post the people to all

the haters that think that my small

gains are very crappy

okay gg so as you guys can see

shorting is not for the faint of heart

right it is not

for the inexperienced trader because not

only does it deal with

leveraging it also deals with margin

account

and it also goes on it also

goes against the market where you're

betting against the market right

so there's a saying guys never go

against the trend

because the trend is your friend right

the trend will always be your friend

so you can you don't want to take a lot

of unnecessary

risks by going against the market but

sometimes right

when you become a more experienced

trader you might

want to bet against the market because

if you bet against the market you can

actually make money on the downtrend as

well

so just to summarize this lesson number

five video we have covered

what is leveraging what is margin

trading

all the risks associated with it what is

going long

and also what is shorting as well so

we've covered all of the five topics

i hope you guys have had a wonderful

time in this class number five

lesson and i hope that you guys really

do understand

all of the risks associated with

leveraging

and guys i need to emphasize one more

time because you guys are my students

and i genuinely care about you and i

don't want you to get liquidated

i don't want you to get to that point

you know in the real world what they

call it

they call it a margin call okay

and when you get margin called

like guys like honestly it it makes me

really upset think about that you know

like

it makes me really upset because i think

back to those days guys of when

i was liquidated one time for forty

thousand dollars yeah

for 40 40 40 000 guys

it was a lot of it it brings back like a

lot of memories right now and what i

actually had to go through

and the emotions that i had to go

through and if i feel like it's coming

back right now

because of how scary it was guys that

you guys can see it on my face right now

how scary it was to lose that kind of

money

of 40 000 getting liquidated

and guys i didn't keep any of it it went

to zero

yeah it went to zero

and the last thing that i want to see is

for you guys to get liquidated

because it is the scariest thing that

can happen

when you get margin called it refers to

having to sell basically whatever you

have left

just to make up for that having to pay

back the funder in the exchange

in this particular case and when you get

margin called

and you actually have to liquidate your

position guys it's the scariest thing

ever

don't don't do it don't leverage don't

don't short like don't do any of those

things until you get much more

experience in the market because i want

to see

you guys succeed okay and the risk

needs to be drilled into your head i

need you guys to understand that okay

and i want you guys to be happy i want

you guys to succeed i want you to be

thrilled with playing the market but i

don't want you to take these unnecessary

risks

and focus on making money because the

focus should be on what guys

it should be on making good trades if

you said that

so guys thank you very much for joining

me for this lesson five

it was a wonderful time talking about

leveraging talking about the risks

associated with it

talking about liquidation talking about

margin talking about going long

talking about going short and if you

have any questions guys

make sure you are 100 posting it in the

in the below there's a question and

answer section guys

and because you're my students i will be

very very

inclined in the next 12 hours to make

sure that your answers are

thoroughly answered okay i'm not going

to leave you guys hanging

you guys have me i'm your instructor you

guys have paid

for the course i'm very grateful for the

support

make sure you're asking as many

questions as you can because i want you

to learn and that's what i'm here for

to answer the questions that you guys

have so thank you very much for joining

me

i apologize for getting a little upset

there when i was talking about losing

the 40k

i only got upset because the last thing

that i want to see are my students

make the same mistake i don't want you

guys to make the same mistakes that i've

made

i've made them all already and these

lessons and these advice that i'm giving

you

is so you don't have to repeat the same

mistakes that i've made

let me make them for us already which

i've done so have yourselves a great day

and thank you so much from the bottom of

my heart for

all of your love and your support and

for especially

joining me on this lesson five i'll see

you guys in lesson number six and that's

where the goodies

begin okay guys take care now bye