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OKCoin Exchange – Beginners guide to Bitcoin trading

OKCoin background information

OKCoin is an Chinese digital currency (crypto coins) exchange and trading platform based in Beijing. It was founded in June 2013 and already by 2014 it had grown to become the largest bitcoin exchange in China.

As of 2015 it’s the number one exchange in the world based on Volume and considered the best and most stable exchange for trading bitcoins and litecoins.

Bitcoin Exchange volume

 

Creating an account on OKCoin

Before you start you will need the following in order to go through the KYC (know your customer) process

  • Valid identification in the form of one of the following: Drivers license, Password or social security card.
  • Proof of residency, utility bill or similar with stated name and current address not older than 6 months.
  • Valid and working email address
  • Possible phone number for sms verification and simple two factor auth.
  • Possible Google authenticator or Authy (we suggest Authy, since it allows backup of keys) for two factor authentication

Go to www.okcoin.com make sure the connection is secure (starting with https:) and click “Sign up”

Follow the process and be sure to enter an working personal email address and a complex password for better security (never reuse your password(s) on different websites)

Once signed up you need to go through the KYC (know your customer) process for level 1 verification which allows funds and BTC tranfers in and out of your account. This is where you need to provide valid identification and prof of residency. Approval usually take 1-2 days depending on work hours in China and verification que.

Futures trading are not enable by default

okcoin_enable_futures

but can be enabled via “Trade” in the top menu.

Select Trade, click on futures and agree to terms.

(See picture on the left)

 

 

 

Funding OKCoin account

There are a few different ways to fund your OKCoin account.

We suggest funding your account with BTC by doing a bitcoin transfer from your bitcoin wallet.

You can also transfer in fiat money from your bank account, but unless you live in China we suggest you buy your BTC somewhere in Europe or US (Read more in our Buy Bitcoin guide)

To fund your account with bitcoin, simply click the “Account” Top Menu and click “Deposit” and then “BTC Deposit”

Click generate BTC address and transfer the bitcoin from you wallet to the BTC address that was generated.

Bitcoin transfers to OKCoin usually take around 1 hour depending on the how fast blocks are mined in the bitcoin network.

Once the transfer is completed and confirmed you are ready to start trading with either spot prices or with futures.

 

How to trade on OKCoin

First you need to consider if you want trade spot prices or futures.

Unless you have any previous trading experience, we suggest you start with some small spot price trades untill you get the feel for it.

Spot prices are traded 1:1 meaning without any leverage (10x/20x margin). If you got $100 on your account you can buy bitcoin(s) with that $100 and likewise if you got 1BTC you can sell you coin(s) back to USD.

You might have heard traders talking about they are in FIAT or in BTC, meaning either they think the market is going up and therefor they bought bitcoins or they think the market is going down so they sold their bitcoins and are now in FIAT.

The quick and wise reader might already have realized how to make money via trading by now, but lets do an quick example nevertheless.

Lets say you transferred in 1 BTC and sold at the top around $500, then bears attack (massive selling, pressing the price down) and price is now hovering around $450, then you buy bitcoins and get 1.11111 bitcoins still worth $450. Later bulls attack and drive the price up again to $500 and now you have a total worth of $555.56 if you where to sell again at $500.

 

Trading spot prices on OKCoin

Now back to trading spot prices. There are different way you can set up your order. We will only consider Limit orders and Market orders in this beginner guide.

First an example of a limit order

OKCoin_spot_trading

In this care we are in FIAT (only $0.09) and have selected Buy BTC via the tab menu (notice sell right next to buy in the tab menu).

We then select limit order which means our order will only trigger if BTC reach the price we enter in the price field.

So if we think the price will fall a bit we can enter a lower number than seen in the last price field right above the order book (which are all the numbers on right side)

Then for example we put $380 and use the slider below to use all our available $ and then select buy.

The order will then only go through if the price fall to $380 and will then be executed and buy BTC based on amount specified.

Same logic applies to the Sell BTC tab

 

Market orders are are even more simple and will simply just execute the trade right away based on the current spot price.

That can be useful if you want to enter or exit the market fast in case of a huge price movements.

 

Trading futures on OKCoin

Trading futures are for the more advanced users and by some called OKCoin casino as the prices can move very fast in any direction and can be dangerous when trading leveraged (10x/20x).

Notice in order to trade futures, you need to move BTC from your spot account to your futures account when logged in, either with the small fund button as seen in picture below or via futures pages and Fund menu link

Let’s do another example

OKCoin_futures_trading

First we select BTC futures in the left menu then notice there are 3 different tabs with different names like BTC1113, BTC1120 and BTC1255.

The quick reader will realize we have weekly’s, biweekly’s and quarterly future contracts.

The first one is weekly contracts/futures, which means they settle each Friday at 16:00 (UTC +8) in this example they will settle 11 (which month) 13 (which day). So if you opened a long at $350 for 1 contract on Monday and do not close it again, it will be settled (position closed) at whatever price on Friday with either a loss or a profit.

Weekly’s and quarterly’s are the most traded contracts, so you should avoid trading biweekly’s since the liquidity are usually quite low.

Each contract got a fixed value of $100 represented in BTC. So if you go long on 10 contracts the value in BTC would be equal to $1000 based on current BTC price

For beginners you should only consider the “Limit order” type which is also the order type we will describe in this beginner guide.

Next up is the leverage selection. You can either select 10x or 20x, 10x means 0.1 btc will make it possible to trade with the value of 1BTC and 20x would open for trading with 2BTC.

But it also comes with a great risk.. at 10x a 10% drop in price would mean you lost those 0.1btc and 10% rise would doubled. With 20x a 5% drop would mean you lost all and 5% rise in price would double your money worth. So where is the risk one might ask… MARGIN strongly suggest you google that word.

In order to avoid that you would owe OKCoin money if the price drops below 10% on a 10% long, your open position (order) will automatically be closed (automatic liquidation) at market price once i’ts near 100% loss. Meaning you just lost all the BTC used for in that trade.

Then we have the price and amount fields. There are 2 things to consider here. Either you can manually set a price at which the order will trigger or you can tick BBO which will open your position right away based on current price. That might be handy if the market is moved really fast and you want to enter for a quick profit. Amount can either be manually specified in BTC or you can use the “slider” below which will either open a position based on 10%, 20%, 50% or 100% of you total futures account worth.

Last we have the “Open Long” and “Open Short” buttons. Long is for when you think the price will rise and short is when you think is will drop.

In a short order, you will bet against the market thinking the price will drop. Any % drop in price will be a profit on your position based on your leverage (10x or 20x)

Once you have an open position following will be shown in bottom part of the screen

OKCoin_futures_trading_open_pos

You can see we have a small profit (0.33%) on our long position and we can place price and amount and click “Close” or we can press “Mkt” and the position will be closed right away at current market price. When pressing “Close” after setting the price and amount the open position will only be closed once the market price is same or higher than price entered.

That concludes the OKCoin beginner guide to trading spot prices or futures. Feel free to comment or leave questions if any.

Signup promotion link: www.OKCoin.com

 

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Nik
3 years 10 months ago

Excellent guide. Thanks will sure come handy


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