Crypto Trading for Beginners: Are You Also Giving Money to the Market?
Today, many people are showing interest in crypto, thinking they can make a lot of money if they trade. I don’t know who will make more or less, but most people who are trading today don’t even have the basic knowledge of trading. And because they lack knowledge, most people end up making losses, giving their money away to the market.
However, if you want to learn trading right from the beginner level, then this article and the upcoming articles are for you. Starting today, we are launching a series called “Crypto Trading For Beginners.”
Crypto vs. Traditional Markets: Why Understanding the Difference is Crucial
Look, put crypto aside for a moment; if you just want to learn trading, then calling it “Trading For Beginners” is better. But if you are looking specifically at crypto, I want to make you understand that there are many things in crypto that are completely different from the share market or the forex market.
For example, there is a funding concept here that people are unaware of. If you open your P&L (Profit & Loss) today, you will see that you are also paying funding fees. Which funding fees are these? Can they be earned? There are many such things that I also discovered very slowly and gradually.
So, we are going to discuss all those things we have discovered ourselves—the things that actually work and can help you trade well and profitably.
From Beginner to Intermediate: What We Will Cover
Point number one, we will start from the beginner level. Secondly, we will try to cover everything from the beginner to intermediate level. I won’t say ‘Advanced’ because I don’t think I am at the advanced level myself. You might find someone else who is at the advanced level, but the beginning-level things, the basics, are going to be very useful for you.
In this series, we have Mr. Anand Laddha (Chartered Accountant, CFA) connected with us. Anand, what is our primary motive for creating this series? It is to clarify the basic trading knowledge for people so they minimize their losses. They shouldn’t be left wondering why they are losing money.
As I said, many things are different in crypto. Funding is different, liquidation is different, there are different margin modes here, and understanding them is a different thing altogether. Many people are unaware of these things. The concept of leverage is completely different. The leverage in options is very high; how much to take, and in which mode to trade?
So, there are so many things that if someone thinks, “Yes, I traded in Nifty, I’ll manage here too,” they are mistaken. It is very different. So, we will try to teach those differences to people, with step-by-step learning.
What is Futures Trading? (Understanding the Basics)
First of all, let’s start from the very beginning, the basics. Today, we will cover the two options we have here – Futures and Options. We will discuss them in detail, and focus on one of them, Futures, in detail.
We are on the Delta Exchange India platform (the link will be in the description/pinned comment, you can sign up too). When this screen appears, people who are completely new and don’t know trading feel overwhelmed: “What is this? A chart on one side, an order book open, buy/sell buttons here—what do I do?” They are common people; they think if it’s going up, I should buy (Long), and if it’s going down, I should sell (Short). So, they understand Long and Short much.
Crypto Futures vs. Indian Market Futures: The Big Differences
Now, what is it that you are longing or shorting? You said let’s understand Futures. So first, let’s understand what Futures is. Futures is basically a contract. As I said, the trading here is different from our Indian market. I’ll show you why it’s different.
If I show you the price of Nifty today, it’s around 25,000. That’s right. But for Futures, the dates are different. This is what people need to learn and understand. For example, there is a current month’s expiry (28 October), next month’s (25 November), and then the far month’s (30 December). But the prices of all three are different (25,112, 252, 402). So, they are different.
Why is the price higher? This is called a premium on Future, which is the cost of carrying. But for Bitcoin or any crypto Future you take here, there is no expiry date written. Can you see an expiry date anywhere? Nothing.
Perpetual Futures and the New Concept of Funding
If there is no expiry date, it is called a Perpetual Future. Since there is no expiry date, why is the price the same? If Bitcoin is around 1,22,650, the Future price is exactly the same. The prices are not different. The price of Bitcoin’s Spot is the same as the Future’s price. How is this possible? Future is always more expensive; we have seen this in every market. Whether you talk about the Indian market or the US market, the Future price is always higher.
This is where a new concept comes in: the price is the same, but there is a funding cost. For instance, after the next two hours and 42 minutes, a funding amount will either be deducted or received. How much is it? It is written here: 0.01% every 8 hours. So, if someone has held (bought) this Future, their money will be deducted if the funding is positive.
How will you know which one is positive and which one is negative? You go to Markets, you click on Funding. These are all negative. This is a good example; here, one coin has 1% funding. After two hours, you will get money if you buy it. Whether it goes up or not, you will get the money.
Leverage and Liquidation: Understanding Risk and Rewards
And if you want, let us know in the comments if you want an article on funding, if this topic interests you. You can get 20%. You might ask how you get 20%. I’ll tell you. It’s 1%. If I buy it trading at 20x, the maximum leverage is 20x, so I can get 20%. But the problem is, if you buy and it goes down, like the price is falling now, you can incur a loss.
How to hedge this, how arbitrage can happen—we will talk about all that later. For now, we are talking simply: Future is more expensive in other places, but the Bitcoin Future, specifically, remains the same. The price remains the same, but funding money is deducted if you buy and received if you short.
So, if you have shorted the Future here, even if the price doesn’t go to 25,400, you will still receive the premium on the Future. In the same way, we will keep receiving funding here. Now, when we are buying the Future, and there is no expiry, leverage plays a big role.
What is Leverage and How Does Liquidation Happen?
That’s not the case here; a lot here is very cheap. It comes for 0.76 USD. How much is that? 0.001 BTC. One lot is 0.001 BTC, and you can buy or sell the Future for less than one dollar. You can trade here with very little money, approximately ₹50. This is when the leverage is 200x. If you reduce the leverage, you will directly see that you need to put in a little more money. At 150x, it’s $96. If I do 100x, it’s directly $1.37. So, it depends on how much leverage you take.
Live Demo: Market Order vs. Limit Order and the Fee Game
I am showing you a small trade here for now. Suppose we think the Bitcoin price will go down. I took it at 10x. Here, one lot costs $12. Now there are two or three options – Limit order or Market order. For now, I’m placing a Market order. Then I’ll tell you what happens. As soon as I clicked sell, “I understand place order,” you saw my position came down.
How will I make money on this position? A line is drawn straight here. This line indicates that you took the trade at this line. Now, if the price goes below this line, you will make money. If it goes above this line, you will make a loss. It’s that simple. I showed this trade so you can see how to take a trade.
The trade we took executed immediately because we placed a Market order. It executed immediately. You don’t see much here because the leverage is 10x and it’s only a $12 trade, so there’s not much plus or minus, showing 0.01 USD. It is nothing. But it depends: if I take higher leverage, the money shown will be higher, but the loss will also be higher.
Limit Order: The Secret to Saving Fees (Maker vs. Taker)
The second thing is the Limit Option. Now look, you are new, you make the mistake I just made, and you shouldn’t do that. By placing a Limit order, you save your money. How? I’ll show you. With a Limit order, you simply click on “Best Offer,” and the Best Bid automatically appears here.
Now, if you short one lot, the money required will be about the same. Put it on Best Bid and click sell. Now I’ll show you what happened. This trade of mine also executed here quickly.
Now look, there’s a fees button here; people never look at it. I said this is what you shouldn’t do. If you look, two different fees are written here:
- 0.02%
- 0.05%
When I placed the first order, I placed a Market order. With a Market order, you are always the Taker; you are taking liquidity. You instantly took this liquidity, so a fee of 0.05% is applied. 90% of people don’t look at this; they just pay. But they are paying more than double the fee. It would have been 0.02% if you had just clicked on the Best Offer.
My order executed in a second right in front of you because Bitcoin has good liquidity. The order was placed instantly. But when you place a Limit order, you are the Maker. This is called the Maker; you are making liquidity, not taking liquidity. When you take liquidity, you are always the Taker in the market. So, whether we want to be a Taker or a Maker is up to us, but if money is being saved, a sensible person should save money.
How to Set Stop Loss and Take Profit
You can enter your own price. You can say you don’t want to short right now. If you are taking a falling-price trade, you say you will only trade when the price reaches 600. So, if I entered 1,22,600, if I wanted to sell at 1,22,600, I click sell and place the order. Now you see my position will appear in the Open Orders.
This is called placing an order on Limit. When my order price comes, then I want it, not right now. Now, if you want to cancel it anytime, you can cancel it. And here, you can also set Take Profit and Stop Loss, even within this open position.
Suppose I say I want to set Take Profit. If Bitcoin falls by 1% from here, book it, and also set my Stop Loss at 1%. Now I confirm. In this position, I stand to gain around $2.5 or lose $2.5.
In this way, you can set Take Profit and SL. So, this is how we place orders, and I have shown you how fees are applied.
Delta Exchange Scalper Mode: Save on Fees!
Delta Exchange offers you a feature. What is that offer? If you want to save your fees, you can get 50% off your fees by taking the Scalper Mode.
This is good for people who are scalping. For example, if I had to take this trade now and cut it shortly after. If I activate it (click “Join Now”), now if you place any trade, you will pay fees to enter the trade, but not to exit.
So, what should you do in this mode? You enter the trade using a Limit order and exit it using a Market order. The Market fee will not apply when you exit, so you can cut the trade instantly. This mode is good for people who are trading within 15 minutes, and for BTC/USDT, you can even wait up to 30 minutes.
Advanced Chart Features: Adjusting SL/TP Lines
I am trading here, and you can stay for up to 30 minutes. Look at a fantastic thing that appeared on the chart that is important to show. When I placed the trade and set the SL and Target, the lines appear automatically here.
And if you feel like widening the target or bringing it closer, you can drag your line like this, and your order will change automatically. Now, when I go here, I am losing $2.12, so you can shift this up and down yourself. You can say you want to bring it to cost, so you can bring your SL to cost and leave it there. These are all the choices you get when you trade.
Maximum Leverage Across Different Crypto Coins
Now, I hope I have given you a basic concept of what Futures Trading is. But Futures Trading can be done on many coins here. Ethereum and Bitcoin have up to 200x leverage. And Solana and BNB have up to 100x leverage. Even XRP has 100x leverage. After that, most coins will have 20x leverage. The coins with large market caps, like Litecoin and Dogecoin, offer 100x leverage.
Position Limits and the Sub-Accounts Trick
Now, a question arises because I create many strategies. People don’t know this. If we trade at 200x, is there any limit? Meaning? Meaning, people don’t know this. When I showed a coin here that has negative funding, and said, “Let’s go short or buy it and make money.”
So, if I want to buy it, trading at 20x, Delta won’t give the entire amount to me. There is a limit here: my maximum position can only be up to $50,000. The position in Bitcoin can only be up to $1,00,000. If you trade at 200x and are right, you can make a huge profit.
So, there is a lucky capping here. What is the workaround for this? You create separate sub-accounts. I have created different sub-accounts. By creating sub-accounts, you can take a trade of the same one lakh dollars on different accounts within the same main account.
Risk-Reward and Upcoming Topics
Now look, the trade we took is running at 1% profit. Both profit and loss can happen very quickly here. 1% is a very good amount, percentage-wise. Although we haven’t invested much money, so $0.3 is nothing. But if we trade with a little more money, 1% can be good. 10% can be made here, and 100% can also be made here. But it can only happen if you understand risk and reward and then trade. So, risk-reward is very important in trading.
We haven’t discussed any strategy yet. In the upcoming articles, we will also talk about strategies. We will talk about algo trading. We will also discuss how your entire trading can go on automation. So, we will discuss all this in the next article.
Free Webinars, Telegram Group, and Algo Software
If you also want to trade on Delta Exchange, the link is in the description and comments. Below that link is a Google Form link. Be sure to fill out that Google Form. Because those who fill out the form, we invite them to a free webinar. If you want to learn crypto trading in detail and are interested in options trading, there are free webinars that happen daily.
Secondly, if you fill out the form and come to the webinar, our team will also make you a part of a free Telegram group. And you will also get an algo trading software free of cost. So, fill out that form.
Your Investment: Focus on Knowledge
Subscribe to the channel, click on the bell icon. And if you want an article on funding, please write “Funding” in the comments. We will create a detailed next article on that.
This was very clear, the basics. We have only discussed Futures for now. We will try to cover Funding in the next article if people are interested. After that, we will discuss funding strategies, then Options, and probably share some Options strategies as well. So, this is going to be a long series, and you will have to stay with the channel and understand things in detail. Sometimes, you have to invest in your own knowledge, and this will be your investment. Thank you so much
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