How To Sell Cryptos Short On Kraken And Why You Should Be Doing It!


Before we jump in guys, just a quick one for
our followers: YouTube has changed the way the format things, apparently they have decided
not to notify you guys when we put videos up anymore. So remember, when you watch the
video…that little bell there next to the subscribe, click that, you’ll actually start
getting notifications again. Were sorry so many of you missed a bunch of our uploads,
it’s just YouTube! Whats up everyone, its Austin over here at
the crypto playhouse and today I’m going to be talking to you about something I’m really
passionate about. Today were going to be talking about going short in crypto. Now if you’ve
been in the space for a while, then obviously you hear it all the time, HODL, HODL, HODL,
HODL. Everyone seems to think this is an investment strategy, in my opinion it’s really not. If
you just want to throw some money at crypto, make some money down the line, then sure go
for it. But if you want to be trading and actually making money on crypto playing the
market, you have to play both sides. You can’t just go long forever, so today we’re going
to dive in, we’re going to talk about why you should be going short, and were going
to also look at the Kraken cryptocurrency exchange, and were going to be showing you
how to open up your first short position. Okay, so I know I’m probably going to have
some crypto purists that have their pitchforks out chasing me after this one. I got into
crypto because I really was into the technology, I got in through mining, so it should be said
that i didn’t start out as a trader, but it is part of what i do to sustain myself by
working in crypto. And I see it so often nowadays, everyone just says HODL, HODL, HODL. This
really just…guys, this is not trading, this is not an effective method to make money.
I’m sure that there are people out there, that you got in early enough that this might
work for you but the reality is, if you’re sitting there and you’re just “hodling” everything,
you’re essentially just opening a long position forever, and that’s not trading, it’s really
not. If you want to play this market…Say Ethereum goes up by fifty dollars okay? And
you’re already holding Ethereum, great it went up by fifty bucks! Now if it turns and
it comes back down fifty dollars, I hear people say all the time, you should’ve just held!
Well, if you’d just gone short, you could’ve just made fifty dollars and you could’ve reinvested
it into Ethereum. And that’s something that i really think people don’t understand. And
it is a very important concept to get about going short. You can go short and still support that coin.
I hold a bit of Ethereum on this account just so that I can short it literally so I can
build up that position. You know people seem to have this idea that if you’re going short
it’s against the coin. No! I literally go short so I can make my main “long” position
as you would say, my “HODL” much larger. And I think that’s a core thing you have to remember
that might get you more motivated to go short. Don’t think of it as selling and getting rid
of it, you can really bolster your own portfolio and build it up with the profit you make from
these shorty positions. Okay so hopefully we’ve got you a little bit
convinced that going short isn’t completely evil, seriously guys you can go short and
still support the crypto that you’re going short on, it’s not that big of a deal. But
really, what is going short? So for starters, going long is what everyone knows. When you
buy or you “HODL”, you’re going long. You’re opening up a position and saying i believe
that this coin is going to go up, so I’m going to buy and when it goes up I’m going to sell
that and realize my profits. All that going short is, is basically you’re taking the other
side of that trade. So essentially this process is, you’re going to have a margin account,
which is basically collateral. That’s the best way to think of it. And what you’re doing
is you’re going and you’re saying I believe this coin is going to go down. So some exchanges
provide a service that basically says, alright if you want to go short, we have these people
that hold their coins and it’s going to be in their portfolio, they’re not going to be
trading it and we have access to those. So you pay a small rollover fee which I believe
with Kraken is every four to six hours. The fees are very minimal, you’re talking about
pennies. But essentially you’re going to pay a little bit to borrow shares from someone
else and you’re expecting those to go down. So you’re going to borrow those shares sand
you’re going to sell them. Okay, now you’re collateral is going to cover that, so if it
goes against you it will eventually liquidate that. Were not going to talk about margin
calls and all of that today, there’s much more to it. But the biggest thing to take away, is when
those prices go down and you’ve already sold, all you have to do is you go back in and basically
you exit the position by buying back those same shares that you sold at the top. And
all that going short is, is you’re taking that difference from where it was to where
it is now, and that is the profit that you realize, and you return your shares. So yeah,
going short is really just taking the other side of a long trade.. There’s nothing wrong
with this, there’s nothing evil about going short. In all reality a market where you can
short, actually improves accountability in my mind. Because in a market where everything
is long positions it’s very hard to interpret what the general consensus on the market is.
You have to have two sides to a trade you know. I know that a lot of people say, well
you know you should just hold, its good for the cryptos, its good for the community. I
actually have to disagree. If a crypto is not doing well, people should be selling it.
Markets are supposed to be indicative of how that project is doing. Going short is important.
Go short guys! Alright, so we’ve talked about what going
short is, we’ve talked about why you should do it, so now let’s jump in, actually take
a look and open up your first short position! Now it should be mentioned that I’m using
Kraken. You can do this on Bitfinex, Poloniex, there’s a number of platforms that do offer
the ability to go short now. But the options are more limited. Personally I’m just comfortable
with Kraken. I have a little side account here we’ll show you how to do it from. Personally,
you can put in all of your info into here and do your order through this format. I much
prefer the traditional kind of “trading” style with your chart and everything here.
So were going to come in and were looking at Monero today. I’m actually just going to
open the position up. As you guys can see here we actually had a little recording going
on before and had some technical issues. So, be happy, I lost profits so that i could make
this for you guys! Anywho, so it’s very simple, we’re going to come over here, and we want
to make a sell order. And let’s see, we want it to be a limit and the price is currently
at $153.67, and I actually do want to open this position so, lets say I’m going to go
in for two times leverage with three Monero, and lets say i want to sell at $153.65. So
were just going to enter that in there. Good until canceled, that’s completely fine. And
basically this little red dot right there is showing where we’re going to be opening
it up. So it’s a as simple as that, were just going to go, sell. It’s going to ask for our
confirmation, i know everyone always just hits confirm, but seriously guys review your
orders. Especially when you start getting into more advanced orders where say you’re
going short or if youre doing a rolling stop, or something like that, you absolutely should
check your order confirmations. It’s very important. Alright, so were going to come in here, we’ve
got it. Were going to confirm our sell, and there you go! We have officially borrowed
three shares of Monero, we’ve sold them on the market and now we’re waiting for the market
to go back down so that we can buy those shares back and realize our profit. Now, right now
as i said it will open up this red dot, and you’ll see as the price comes down it will
lower this way. And yeah, it’s really as simple as that guys! That is opening up a short position. Now as I mentioned I am actually going to
hold this position throughout the day. So, I’ll show you how to exit it, but I’m not
actually going to initiate. It’s basically as i said, just the other end of the trade.
So in this case we have three Monero thats up and let’s say that we want to exit around
$145 USD. So that’ll be realizing close to nine dollars of profit per share, so all you
do is say that we want to buy back at $145. It’s going to ask for confirmation, and essentially
what this will do, is once that price gets down to where our green point at $145 is,
it will buy those shares back. You return the shares to the person you borrowed them
from and you realize your profit. It’s really not that scary, it’s not that complicated,
i think that a lot of new traders stay away from it, there’s something that even feels
a little bit wrong about getting excited as you watch the market plummet. But guys, going
short is a n essential tool for any trader. If you’re avoiding this you’re really just
damaging yourself. Alright i hope you guys found this video useful,
,maybe there’s somebody out there that has finally decided going short isn’t evil and
they’re about to open up their first short position! But anywho, we’d love to hear from
you guys! You know, what would you like to hear about going short? Is there something
you don’t quite get that we could help you out with? Let us know in the comments, well
get back to you! We want to know what our followers are looking for with trading. Along with that, you should check us out on
Steemit, alot of our analyses are being posted on Steemit and we give a breakdown of how
were making our trades. So definitely head over there and check us out. Were getting
a lot of great content and it’s really growing. Stay decentralized people!

87 thoughts on “How To Sell Cryptos Short On Kraken And Why You Should Be Doing It!”

  1. Selling short is an essential weapon that every trader should be well familiar with. Great video!

  2. Yes, Click the BELL!!!! F*ck the Establishment. Now Thanks for Explaining Ging Short in Kraken. Love It!

  3. Selling cryptos short is a must at certain times. Too many people are obsessed with the HODL crap.

  4. thanks, nice video. I am learning and this is the first time that I understood and "seen" what going short is. I a, going to check out all your videos . thanks again.

  5. I went to try my first short trade but I had to stop as I did not understand the concept of leverage. I did some research and still cant find anything. its all "assumed knowledge" in your video you used a leverage of 2. can you please ex[aline it or refer me to a site that explains in simple terms the concept. Thanks and I really enjoy your videos.

  6. Made my first few orders on Kraken a few days ago but ran into a problem.

    I did a limit order but my order was never met. Is there any way to get my money back or cancel the order?

  7. May I ask a question: Let's say I want to short BTC at 5:1. I assume I would first "sell" BTC at 5 Leverage. When I want to close, I assume I would “buy” at Leverage 5, as well. If the trade is profitable, then I make 5x the profit. (But if the trade is not profitable, I loose 5x the investment, as well).

    Moving on, what if this next scenario occurs. What if I "sell" BTC at 5 Leverage to short BTC. Then, I “buy” BTC at Leverage 2 (not 2) to close the short. What will be my return? 5-2=3x?

    Lastly, what about the reverse scenario? I "sell" at 2 Leverage and "buy" at 5 leverage. What would happen then?

    I understand the basic concepts, but the mathematical variances are confusing me. . Thanks kindly! And great video.

  8. Have a quick question. I had a 2:1 short position open for .3 and I have .15. I profited, but all the while I still owned .15 btc, so the profit I made was offset by the depreciation. Isn’t my .15 btc in that .3 short? Or is all that Kraken’s btc and my btc is just assurance that I can pay them back should things go badly?

  9. I have one question when it comes to shorting it. Let's say i short 1 BTC @ the price of 10.000 USD when would i lose everything? When it hits 20.000 USD?

  10. I need help understanding the risk. If I short buy crypto and I lose the full leverage of the amount invested–is it possible that I could go negative and owe money instead? If so, how does that even work? I'll like to start with Kraken, but I'm cautious. Thank you.

  11. Hi. And how can i just sell my coins on kraken without shorting them? i don't know if i understood correct but when you don't use leverage you just sell them and remain with the dollars in your account? thank you

  12. I Just subscribed! I have been trying to wrap my brain around this shorting idea for a while, but It seemed too complicated – this video was great-easy to digest. Cheers!!

  13. You got another subscribe, grat video. However I dont understad, you made a sell order for 153.65. On about 6:42 video I can see the highest purchase price is 153.52 for 1 XMR. How do you expect your order to sell if you think the price is going down? Canyou please explain that a little.

  14. So you need to have BTC if you want to short it. So you’re a holder as well and I don’t like holding. Imagine BTC keeps falling. You can earn a lot of BTC but maybe you end up having less money than the moment when you bought BTC in order to short, because you earn less than the amount it falls.
    If you buy 1 BTC at 10,000 Euros, and you end up having 1.5 BTC by shorting but the price of BTC goes to 5000 Euros, basically you will have 7500 Euros at the end. And you can think… well, it doesn’t matter because when it goes up, I will have 1.5 BTC. And what if it doesn’t go to 10,000 Euros again?
    It’s only useful if you’re a holder, because if you are a trader, it isn’t worth it. I can wait and buy 2 BTC at 5000 Euros instead of shorting and earning 1.5 when it’s worth 5000 Euros.

    What the hell is this? I thought you could short with Euros and earn money like you do when you buy.

  15. DO YOU MEAN THAT IF I WANT TO TAKE SHORT ON ETH , SO I HAVE TO BUY ETH FIRST AND THEN SHORT IT. OR ITS JUST TO HAVE USD AND THEY CALCULATE HOE MANY ETH I CAN SHORT, AND THEN START.

  16. Thing is that you did not open a short position, you have just placed a short selling limit order 😉

    Anyway, people can learn from this video.

  17. You're right about trading cryptos, but Kraken charge fees for it, have you read about an exchange called Digitex? zero fees commissions and also you can go short or long according to your decisions.

  18. https://vignette.wikia.nocookie.net/villains/images/2/28/Jean-Baptiste_Emanuel_Zorg.jpg/revision/latest/scale-to-width-down/310?cb=20120505004033

  19. Hi. This is a very good video. Could you please give us a recomendation in case of price burst as GDAX and ETH a year ago (falls at 0.1 cents) , Bitstamp in EUR pairs (a month ago )or how could manage or funds to prevet a marging call in a short squizee? Thanks again.

  20. There is only one thing i don't understand. How is this different from simply selling your coins at a high price and buying it back at the lower price without the borrowing part? Also what does leverage do?

  21. hey bro are you still shorting? i believe its gonna be around 1k. then alot of people are going to be ohh its a good time to buy and gonna get pump and maybe goes up to 3k to 6k and then its gonna go down. its over extended

  22. Hodling is very bad. That's why hodlers fill the bags of the rich by not selling and allowing others to sell. They also keep the price higher for the selles by not joining the sell party. It's like saying to an unknown guy – hey buddy you sell your stuff and I'll watch mine devalue in price. Of course there is a chance of the price going up put as they say – the trend is your friend.

  23. You should place the advanced order at the kraken site, not at cryptowatch where the graph is, cause at the original site you can set the condition close option by choosing stop loss or take profit option. Then you can go and use cryptowatch for editing and readjusting the order.

  24. Good video and point my friend. Also don’t justify yourself to the non traders. They are in it for the money but have sustained heavy losses and are a little sour to those who are making profits

  25. So when you use leverage say ×2.you have $1000 usd you have the power of $2000 and you trade you gain 20%.Do you in turn get 20% of the $1000 or 20% of the $2000?

  26. the only thing dangerous here is you didn't show them how to place a stop loss right after the fill which is a stoploss/buy above the price. then you can do a Take Profit in place of your limit below. never trade without 1% stop loss discipline. if you are over leveraged Kraken will margin call as early as -10% which is no where near the -40% they state in FAQ

  27. Obviously setting the stop loss higher than when you sold is the smart thing to do when shorting but can you hold a Short position as long as you want? Sorry, I am new to shorting.

  28. I took a long a couple weeks ago and purchased 1 BTC @ 3600 with 5:1 leverage. My account balance at the time was $4500. Two weeks go by and I decide to sell BTC @ 3850. I executed a limit order at 3850 and put the leverage of the sale at 5:1 as instructed. I was under the impression that my realized gains would be the $250 gained TIMES 5 (the leverage). I was expecting $1250 aprx ($250 x 5). The sale only gained me the $250 minus fees. Can you please explain what I am not getting about leverage or why the trade did not execute as I thought it would?

  29. only platform u can go short on with crypto, imagine doing ti on other platforms that charges you 5% per transaction.

  30. Hi, great video! I have a question about the currency that I want to deposit on kraken. My local currency unit is the EURO, but I want to trade on the BTCUSD and ETHUSD. My technical indicators also work best on those pairs. But I am not sure how to do this.

    For example, do I have to deposit USD into my account (if that is possible) or do I just have to deposit EUR and then trade in BTCUSD? Don't know very well what the most convenient way to do this is. And what if I finally want to withdraw money from my account in EUR?

    Thanks in advance.

  31. I'm that guy that's a little weary about shorting. Found out about Kraken and am teaching myself. About to open first small short on XBT!

  32. What happens if the price goes up ? Will the order get liquidated automatically at some point ? how do I know the level at which that will happen ? thanks !!!

  33. Going short is kinda the definition of trading, I just started. Its funny allot of people think thats evil.

  34. No I know it a mandatory requirement to trade effectively. Kraken does not allow residents in Texas USA to short. Do you have a recommendation for an exchange that allows shorting with leverage in the USA, Texas ! Excellent video and I am following you / subscribed now. THX Austin !!

  35. Is it possible to set a stop loss for open long position with leverage trading in Kraken? If yes, please explain. Thank you.

  36. Thank you for the great video. You said that to shorten a coin, one would need to put a collateral? Did I get that right? like cash? How does that work?

  37. Leverage I’m confused about. I hear you can lose everything doing this. Can you go into detail with this please. Thanks

  38. Need to do more tutorials on this topic, you explain really well. Cover all the details of Leverage Trading on Kraken. This ones seems to be your most viewed. Went looking for your video on liquidation but there wasn't one. Anyway, good stuff!!

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