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After Bitcoin went from $100 to over $1,000 in 2013, I became very vocal about Bitcoin being over-valued.
In fact, I didn't just talk about it…
I put my money where my mouth is and starting shorting Bitcoin from the $900's down to the $200's.
After becoming a top contributor on TradingView and having great accuracy with my trades, I wrote a book on How To Trade Bitcoin.
How To Short Bitcoin In 5 Steps
- Find the right broker – One that offers margin trading, has coins available to borrow, and has great liquidity.
- Borrow however much bitcoin you want to short,
- Sell bitcoin at the current market price.
- Wait for price to fall and hit a profit target (or close the position for a loss if it hits your stop loss order).
- Buy bitcoin at a lower price (hopefully at your target) and profit.
There are a few things to keep in mind when shorting bitcoin:
- You need to trade through the right exchanges. There are only a handful of exchanges that allow shorting and have good liquidity.
- You want price to go down very quickly after entering a short. It's not a good idea to hold shorts for long periods of time, or to leave an open short with no stop loss order.
- Risk management is key! When shorting, you can lose MORE than the value of your account. Before getting into a trade, make sure to identify your “stop loss” area, or where you'd get out if price went against you.