The Art of Liquidation: Part II – The Polo-$CLAM-Chowder

If an asset is very illiquid this can lead to great volatility. The order books are thin and medium or even small market orders move the market. Everybody who tried to accumulate microcaps before knows how difficult it is to build or dump a position that is bigger than the orderbooks. With microcaps already small buys or sells can lead to massive slippage. Shitcoin Margin Trading wih illiquid “shitcoins” is a recipe for deseaster.

Poloniex offers a peer-to-peer-system for margin-lending on its exchange. And it offers trading on margin for extremely illiquid tokens. This opens a possibility for whales to accumulate a bigger position of this shitcoin, short it with high leverage and then start dumping the coin to crash the price. Flash Crash and Haircut On the 26th of may the was an incident on Poloniex.

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The Art of Liquidation: Part I – The OKEx-Whale

On exchanges that offer trading on margin there will be liquidations. If a trader works with ten times leverage and the price moves ten percent against him, there will be a margin call and the position gets liquidated. Now these exchanges usually operate on a peer-to-peer-system. That means, not the exchange provides the funds for leveraged trading, but the other traders. If a position is liquidated, the margin of the trader will be used to cover this. If a long position gets liquidated it will be automatically market sold and vice versa. Now every once in while there will be a whale in the gold fish pond who opens massive positions which – in case of liquidtaion – bust all orderbooks. This is a problem and an enormous risk for the market.

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Introduction to Technical Analysis Part II: S/R-Flips

How do you enter a trade safely? Every new trader knows the situation. He sees a green candle, goes long and price retraces. The new trader exits the trade but then price continues higher.

Price seems to interact with certain levels. It touches a level several times before and after passing it. Obviously this would be a good spot to enter a trade. What are these levels?

Support and Resistance

If a level stands out, like a swing high or a swing low, when price returns there, it usually reacts with that level. A level like that is called support (if price approaches from the top) or resistance (if price approaches from down below). If a level is touched more than once it becomes more and more obvious. Orders start piling up around that level and price will react more heavily if it returns. If a level is touched from one side multiple times these orders get eaten up every time price comes there and eventually all orders are gone and price will break through that support- or resistance-level.

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Introduction to Technical Analysis Part I: Candle Charts

Technical Analysis In trading technical analysis tries to predict future price devlopment by analyzing data of the past. Usually this data consists of price and volume. There are quite a few technical indicators, that help the technical analyst in his predicitons. They are derived of mostly but not limited to price and volume. Tradingview is one website that offers a lot of those indicators. In the following Tradingview and some charting basics will be introduced. Candle Charts Tradingview is an instrument for …

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