Home / Crypto News / [Beginners must read] What is the position in the cryptocurrency? Explain the positions of spot trading and leverage transactions!

[Beginners must read] What is the position in the cryptocurrency? Explain the positions of spot trading and leverage transactions!

In this article, we will explain about “ basic basic and “position” in cryptocurrency.

When I use the word “position”, it makes me somewhat familiar with the atmosphere.

Because it is contents which you want to review and beginners can understand, please refer to it.

What is “position” in cryptocurrency?


“Position” in the cryptocurrency means that the definition is ambiguous, but in a broad sense, it has “cryptocurrency .”

In actual use “There is a position” → has a cryptocurrency

I will use it like that.

It sometimes abbreviated as “posit”.

Here are some examples of application of positions.

Application example of “position”
  • No position (no posi) → State that does not have cryptocurrency
  • Build a position (Take) → Make new currency trading
  • Resolved position (removed) → Sold a cryptocurrency and not holding it
  • Focus on positions → Hold only certain currencies

Actually it is used in twitter as below.

I am interested in the cryptocurrency.
I thought it was a phase to take a new position.

– Mr. K @ Foreigner Salaryman (@ k _ shidesu) July 26, 2018

People who have not bought a cryptocurrency yet, even 1000 yen is good, so buy it and take a position. Ideally over 100,000 is ideal. Because the reason will be for each person. Both market, cryptocurrency and block chains. It is better not to accept “I do not know well” for the time being. You had better study. pic.twitter.com/3 mIdQkY 4 iv

– Komatsuzaki Yasuhiro / President of IT even though it’s behind it (@ yasu_ 0524) July 23, 2018

Taking a position without logic is a top of foolishness

cryptocurrency Bitcoin Yearly Nem Mona xrp LTC MIOTA ADA DASH EOS XMR omise Zenny Ripple TRON xp zaif

– TradeLife_bot (@ TradeLife_bot) July 22, 2018

It is very easy if you know the meaning of the position.

What is position talk?
Operate the cryptocurrency held by himself to increase its value by PR using SNS etc. It is also called “Positalk” for short. Especially when the influential person makes a position talk, the market price will be affected.

Up to this point I explained the position in “in-kind transaction”, but next we will explain “position” in “virtual leverage transaction” of cryptocurrency.

“Position” in leveraged transaction of cryptocurrency


First of all, let’s review the difference between “in-kind transaction” and “leverage transaction”.

· In-kind tradingTrading the cryptocurrency with the same consideration as the holding asset. You can only trade within the range of assets you have, but there is no risk of borrowing.

· Leverage transactiontrade in the currency which becomes the margin to the cryptocurrency exchange trader, borrow the Bitcoin and operate the deal. By multiplying the leverage, you can trade at a larger amount than the assets it holds, but there is also the risk of having debt. Also called credit transaction · FX.

In leveraged transactions we also refer to positions as “open balls” .

In leveraged transactions, open positions (positions) refer to the number of orders that are outstanding, orders.

Since it may be incomprehensible, I will issue actual leverage transaction examples.

Leverage transaction example
【In case of buy order】
Make a buy order → make a buy order → have an open position (position) → wait for the value to become higher than when you buy → the value goes up → settle in a selling order · · · Investment method for general physical transactions. In the leverage transaction, how to make such a purchase order is called “long position”.

【Sell Order】 Sell ​​Sell Order → Sell Order Established → Have Position (Position) → Wait for the Value to Decline After Selling → Value Decreases → Settlement on Buying Order · · · In Leverage Trading Such a way of selling orders is called “short position” or “short sale”.

In leveraged transactions, it is possible to separate into “long position” and “short position (short sale)” depending on whether an open position (position) is a buy order or a sell order.

We will abbreviate “long position” as “long” and “short position” as “short (short sale)”.

Next I will explain two types of investment law “Long” and “Short (short sale)” in leveraged transactions.

Position in Leverage Trading (Position) What is “Long” and “Short (Short Sale)”?


In the case of leveraged transactions, “buy order” is called “long” and “sell order” is called “short (short sale)”.

Difference between “Long” and “Short”
Longto issue a buy order, wait for the value to rise and put it for sale. I earn profits as much as the value of currency has risen. General investment law in spot trading.
Long example … … I bought 1 BTC in cash, and sold it when BTC went up 5 times. The profit will be 4 BTC profit by 5-1.

Short (short selling)Borrow currency with a certain margin as collateral to the cryptocurrency exchange trader, and issue a sell order using that currency. Get profit by selling high and cheaply buying back.
Short example: Short selling at 1 BTC = 50,000 yen, and bought back when the price drops to 1 BTC = 40,000 yen. The profit will gain 5-4 = 10,000 yen profit.

What is margin?
It is necessary to deposit a certain amount as collateral on exchanges in leveraged transactions. The fund is called “margin”, and the amount of funds varies depending on the leverage applied.

“Short (short selling) is an investment law that can raise profits at not only rising market prices but also at lowering prices.

In the case of “Short (short sale)”, since I owe the currency from the exchange, if I keep holding a position for a long time (keeping buying, keeping short selling), the commission will increase.

“In short spot trading” short (short selling) “can not be done.

“Short (short selling)” is an investment law unique to leveraged transactions.

In other words, you can select your own position by forecasting raising and lowering prices in leveraged transactions.

Notes on leveraged transactions

Although it is a leveraged deal that you can select two kinds of positions, it is difficult to predict raising and lowering prices in reality.

High risk · high return is also a feature of leverage transactions.

What will happen when the loss is swollen?

Here, we introduce two systems that should be noted when loss occurs in leveraged transactions.

Attention point ① Supplement

Leverage transactions depend on exchanges, but there is a system called “prospectus (otosho)”.

“Supplementary” means “additional margin”.

As the letter “additional margin” is, it is a system that you have to deposit additional margin on exchanges when margin maintenance rate falls below a certain value.

In other words, if the loss increases (the value decreases in longs, the value increases in short), you will receive losses beyond the investment principal.

I am afraid sweat.

If you are unable to pay additional margin within the due date in the certificate, you will be forcibly missed and the position will be resolved.

On the other hand, if you can pay additional margin you can maintain the position.

What is the margin maintenance rate?
The amount of funds in the account expressed as a percentage of the margin required for the order. The margin maintenance rate varies depending on unrealized gains or unrealized losses. If this margin maintenance rate drops more than a certain amount, it becomes subject to “proof of birth” or “loss cut”. The margin maintenance rate of “prospectus” and “losscut” varies from exchange to exchange.

Calculation method … Margin maintenance rate = (owned assets – price of currency at the time of purchase – current price) × number of purchases) / (price of currency at the time of purchase × number of purchases / leverage ratio)

Criteria for pursuing exchanges

cryptocurrency switch Pursuance standard
Bit Flyer Margin maintenance rate 80% or less
Zihu No proof
Coin check Margin maintenance rate 80% or less
Bit point No proof (※)
Bit bank trade No proof
GMO coin No proof
DMM Bitcoin No proof

* There are exceptions for bitpoint.
(As of August 2018)

On the whole there are many exchanges with no bargain.

For beginners it is recommended to use from “no bargain” exchanges.

You can continue trading without paying additional margin.

Attention point ② Loss cut


“Los Cut” is activated when the loss further increases than the proof and the margin maintenance rate drops.

Roskat is a system that can forcefully resolve a position when it falls below a certain margin maintenance rate.

In other words, even if you can maintain the position by paying additional margin in the verification, if the margin maintenance rate falls further, it will be approved there.

On the other hand, since trading can be done without paying additional margin on exchanges without “no certificate”, if you trade without considering the margin maintenance ratio, it is unlikely that you are being dismissed and the position has been resolved Sometimes.

Originally Rosscat exists as a remedy to the trader so that no more losses will inflate.

However, it is a troublesome system for traders because it becomes “loss cut” where the loss is determined at the time when the user is not able to continue the transaction and is cut off.

Rockcut criteria of each exchange

cryptocurrency switch Loss cut standard
Bit Flyer Margin maintenance rate 50% or less
Zihu Margin maintenance rate 30% or less
Coin check Margin maintenance rate 50% or less
Bit point Margin maintenance rate 100% or less
Bit bank trade Margin maintenance rate 20% or less
GMO coin Margin maintenance rate 75% or less
DMM Bitcoin Margin maintenance rate 80% or less

(As of August 2018)

Looking at this, the Rosukat criterion varies depending on the exchange!

In the bit bank trade, the rock cut standard is less than 20%, so it is characterized by being difficult to cut off loss.

Abbreviations on positions · Introduce slang!

Terms related to positions

Gacho Do not let go of positions for a long time
Dismay for sale Because the cryptocurrency is high in volatility, you should abandon your position. Beginners tend to do.
Salted Continue holding the position until the value of the cryptocurrency returns.
Rationality Confirm profit there. Resolve positions.
Loss of cut To eliminate the position before the loss expands.

There are quite a few terms about positions.

If you send via SNS on Twitter etc., it will be a familiar atmosphere!

Summary


This time, I explained about “position” in in-kind trading and leveraged transactions.

As mentioned earlier, the word “position” has some honest ambiguous part.

To the last, I explained about “position” in a broad sense.

For beginners, we recommend starting with in-kind trading and shifting to leverage transactions after it becomes possible to analyze charts to a certain extent.

Choosing a position to realize your own investment style is the secret to profit.

Author: House Cat – Source Post: https://crypto-times.jp/what-is-position/

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