Silk Road forums

Discussion => Security => Topic started by: oppyate on January 09, 2012, 05:32 pm

Title: Bitcoin Hedging Safety
Post by: oppyate on January 09, 2012, 05:32 pm
There’s No Real Way of predicting what the Bitcoin Market will do at any given time. It’s basically a 50/50 chance on any given day you BC’s will either Rise Higher than the price you paid or Lower.
If your Realistic and want to make or save your self anywhere from 25 to 40% on your current BC’s there are ways to “automatically” Buy or Sell your BC’s w/out having to sit around guessing. One way to do this is the Use of Limit Orders.

Limit Orders
A limit order is a placed order to buy or sell a Bitcoin at a specific price or better.  A buy limit order can only be executed at the limit price or lower. Example: You want to currently But BC’s at best price. Let’s say BC is currently at 7. You wish to Buy at best possible price. You place a Limit Order to Buy 50 BC’s at 6.66. E.g. BC drops to 6.80, order is Not Executed. BC’s then drop 6.68. Still No Excution. BC’s then drop to 6.64. Limit Order is Now Executed at 6.66 or better.

Sell Limit order can only be executed at the limit price or higher.  You purchased Bitcoins a few weeks ago at 3.51. You now wish to Sell your BC’s automatically at a certain price. BC is currently at 7.10. You place a Sell Limit order at 8.10. BC’s rise to 8. There is No execution. BC’s rise to 8.12. Your BC’s are Sold at Limit Order or better.

Some Places also offer Buy/Sell Limit "Stop" Orders. A little more complex, but if your curious..let me know.

oppy