Intervarsity Bitcoin Trading Workshop

Introduction to BitMex Platform

About BitMex

BitMex is a cryptocurrency and derivatives trading platform – offers investor access to global financial markets using only Bitcoin

Bitcoin Perpetual Swap Contract

Features of perpetual contract

Bitcoin perpetual contract is a derivative product that is similar to a traditional futures contract in how it trades, but has a few differing specifications

  • Trades like spots by tracking the underlying index (i.e. Bitcoin) price closely
  • It does not have an expiry or settlement date – traders can hold a position for as long as they like
  • Funding: periodic payments exchanged between the buyer and seller every 8 hours.
    • If the rate quoted is positive, then longs will pay and shorts will receive the rate; vice versa
    • You will only pay or receive funding if you hold a position at the Funding Timestamp
    • Funding Timestamp: 6:00 AEST, 14:00 AEST, 22:00 AEST

Contract size, leverage, margin and available balance

Types of Orders

Market orders

Limit orders

Stop orders

Take profit orders


2019 Intervarsity Bitcoin Trading Competition

Rules

  1. The competition runs for 1 week and will commence on Monday 4th of March at 9:00 and conclude on Monday 11th of March 9:00
  2. Each account will be funded with 0.001XBT
  3. The only product available to trade in this competition is XBTUSD – Bitcoin Perpetual Swap Contract
  4. 20 trades must be made in order to be eligible for prize money – opening and closing of the same position will be count as 1 trade
  5. Maximum leverage will be limited to 10x
  6. Do not setup Google Authenticator on the BitMex account or any other 2 Factor Authentication – this will allow us to monitor your performance

Fundamental Analysis

Definition

  • Fundamental analysis is a method of evaluating an asset’s intrinsic value by examining any related economic of financial factors
  • Such as
    • Macroeconomic factors (overall economy and industry)
    • Microeconomic factors (financial conditions and company management)
  • Example: Apple Shares (AAPL)
    • Macroeconomics: Economies of major countries (US, China, Europe), US-China trade relations, other competitors (Huawei), demand for smartphones, laptops, tablets (increasing or decreasing)
    • Microeconomics: iPhone sales, Yearly revenues, expenses, growth etc.
  • End goal: To produce a numerical value that an investor can compare with its current price, to determine whether the asset is under/over valued.

Bitcoin

  • Unlike a company, Bitcoin does not own any assets, make products to earn revenue, no balance sheet
  • Fundamental Analysis includes:
    • What people are willing to pay for (Supply and Demand)
    • Public adoption (businesses accepting Bitcoin as a form of payment)
    • Number of transactions
    • If people see it as a store of value
    • Countries banning its use (eg. 2018 China blocked all access to cryptocurrency exchanges and ICO websites)
    • Comments from important individuals (eg. Jamie Dimon)
    • Major news relating to Bitcoin or cryptocurrencies in general

Sources


Technical Analysis

MACD

Moving Average Convergence Divergence

  • Pronounced as Mac-Dee
  • Is a trend-following indicator
  • Is a “lagging” indicator

The Main Components

There are 4 main components of the MACD indicator

  • MACD line (blue line)
  • Signal line (orange line)
  • MACD histogram which is the difference between the MACD line and Signal line
  • Base line (the 0 level, line dividing the red and green sections of the histogram

Identifying Trends

  • When both MACD and Signal lines are above the zero level then you can consider that we are in a bullish trend
  • Vice versa

Identifying Trends Example

Buy and Sell Signals

Buy signal

  • Bullish crossover: When MACD line (blue) crosses above the Signal line (orange)

Sell signal

  • Bearish crossover: When MACD line (blue) crosses below the Signal line (orange)

Buy and Sell Signals Example

Combination Examples

Divergence

What do you think?

Answer at bottom of page

RSI

Relative Strength Index

  • Measures the magnitude of recent price changes to find overbought or oversold conditions
  • Is an oscillator (a line graph) that moves between the range of 0 to 100
  • Overbought: Potential time for pullback down or reversal
  • Oversold: Potential time for pullback up or reversal
  • Default settings
    • Overbought at 70
    • Oversold at 30
    • 14 days
  • Leading indicator

Buy and Sell Signals

Reversal Signals

What do you think?

Answer at bottom of page

Other Technical Indicators

  • Support and Resistance Zones
  • Simple Moving Average (SMA)
  • Exponential Moving Average (EMA)
  • Bollinger Bands
  • Ichimoku Clouds

Answer to MACD what do you think?

Answer to RSI what do you think?


Disclaimer

UNSW Forex Society is run by a group of enthusiastic students who are interested in the forex markets. We strive to present information up to a high standard, and ensure that our information is cross-checked from multiple sources. However, we are not responsible for any losses incurred during your trading.