Why Trade Bitcoin Futures Instead of Bitcoin?
As a Bitcoin trader, you may want to consider trading Bitcoin futures. Amongst a long list of reasons of how you can benefit from this strategy, trading futures will allow you to pursue short term, low profit margin scalping strategies that would not be possible on other exchanges due to trading fees. Today's article highlights all the other benefits of trading Bitcoin Futures.
Zero Trading Fees
There are zero trading fees on all trades on the Digitex Futures Exchange. Traders can buy and sell unlimited volumes without incurring any commission costs. Commissions are an insidious mechanical edge that constantly work against you in the same manner as the zero on a roulette wheel, making it impossible for very active traders to make a profit after costs. By trading Bitcoin futures on Digitex, traders can pursue short term, low profit margin scalping strategies that are not viable on other exchanges due to trading fees.
Digitex Market Makers
Another factor contributing to a highly liquid Bitcoin futures market is the presence of the very well capitalized Digitex market makers. These automated trading robots are programmed to break even whilst placing bids and offers to increase liquidity. The Digitex market makers have a very large trading bank of 200m DGTX which is 20% of the total supply of DGTX tokens. When compared to a traditional futures exchange this makes Digitex very highly capitalized when it comes to its ability to create liquid markets from day one and to honor all trades in its role as the clearing house.
Creating highly liquid markets with thick order books reduces the other major cost of trading: slippage. Longer term traders who don’t place that many trades may not be concerned by the saving in trading fees but they will be attracted to thick order books where they can place large orders with little to no slippage.
A big benefit of trading futures instead of the underlying instrument is the ability for traders to go short. This means you can sell something you don’t own and make a profit when prices fall. This is an essential strategy for any trader, especially in the long, cold bear markets that never seem to end….
Another major benefit of trading Bitcoin futures instead of actual Bitcoins is the use of leverage. Leverage allows traders to take larger futures positions than they could otherwise take if they were buying actual Bitcoins. This is possible because futures traders must only put down the amount of money they could likely lose on the trade instead of having to put down the full purchase price. Traders on the Digitex Futures Exchange can choose up to 100x leverage, which results in much larger profits (and losses) in relation to the size of your trading bank.
One Click Fast Trade Submission On Trading Ladder
An important factor in successful scalping is the ability of the trader to get in the zone and place trades quickly with a single click and without needing to take his eyes from the price action. The Digitex Futures Exchange features an intuitive trading ladder that displays the Bitcoin futures market vertically. Bids are displayed on the left side of a vertical price column and offers are displayed on the right side of the price column. Traders can easily get in the zone and get a feel for the markets movements as they watch the bids and offers literally move up and down the vertical price column. Traders can buy or sell instantly at their desired price with a single click, without needing to use the keyboard or move the mouse more than a few millimeters.
Large Tick Size Better for Short Term Scalping
The Bitcoin futures market on the Digitex Futures Exchange has a large $5 tick size that eliminates a lot of the unnecessary noise from the Bitcoin price. This means the smallest price increment the futures price can move is $5. This creates thicker bids and offers and reduces volatility, allowing scalpers to more effectively take single-tick profits. Reduced noise through bigger tick sizes also enables the exchange to display a volatile price such as Bitcoin on a vertical trading ladder without the price constantly flying off the top and the bottom of the screen.
Owning The DGTX Token Will Eliminate Trading Fees
The Digitex Futures Exchange is the first exchange of its kind to develop and use its own cryptocurrency, called the DGTX token, to eliminate all trading fees. Traders must have a balance of DGTX tokens to use the exchange. Therefore, the successful launch of a secure and stable trading platform at the end of 2018 will give the DGTX token its utility and create demand for DGTX from traders who must use the DGTX token to enjoy zero fee trading. Development of the trading platform is currently full steam ahead by our full time, in-house team of experienced developers in Dublin and we are on track to launch the exchange at the end of 2018.