GMX decentralized futures trading How to trade with leverage on GMX (Class 18)

Summary

This tutorial explores decentralized trading options for those restricted from margin trading in cryptocurrency futures markets. It guides viewers through setting up MetaMask, transferring funds between layers, and leveraging GMX for trading. The video also demonstrates how to swap currencies, set leverage, and execute trades, highlighting the platform's accessibility for US users. Additionally, it introduces a tool for copying successful traders' strategies and emphasizes the importance of choosing the right trading pair for beginners and experienced traders.

Takeaways

• 🌐 Countries are increasingly restricting access to margin trading for cryptocurrencies in the futures market.
• 📚 The script is part of a step-by-step guide, specifically class 18, focusing on trading derivatives on a decentralized platform.
• 🔑 To get started with decentralized trading, one needs to have a compatible wallet like MetaMask and sufficient funds.
• 💡 The tutorial demonstrates moving funds between different layers (Layer 1 to Layer 2) and scaling solutions.
• 🤑 The presenter shows the process of withdrawing funds from a broker to a MetaMask wallet and choosing a network for the transaction.
• 🔄 The script covers bridging funds from one layer to another, specifically from Optimism to Arbitrum.
• 📈 The GMX platform is used as an example for trading on a decentralized protocol, but alternatives like dydx and perpetual are mentioned.
• 💰 The presenter explains how to swap currencies on GMX, similar to a spot market, and then proceed to leverage trading.
• 📊 The script highlights the ability to analyze and copy successful traders' strategies on the platform, which can be educational for new traders.
• 🚀 The tool mentioned allows tracking of top traders' performance and copying their trades, which can be a powerful feature for learning and potential profit.
• ✅ The video concludes with a mention of an upcoming class on choosing trading pairs and a discount code for trading fees.

Q & A

What is the main topic of the video script?

The main topic of the video script is about trading cryptocurrencies on the futures market using decentralized trading protocols, specifically focusing on how to navigate restrictions on margin trading in certain countries.

Which decentralized trading protocols are mentioned in the script?

The decentralized trading protocols mentioned in the script are GMX, dydx, and perpetual.

What is the role of MetaMask in the trading process described?

MetaMask is used as a wallet to store and manage funds for trading. It is also used to interact with decentralized trading platforms.

What is Layer 1 and Layer 2 in the context of the script?

In the context of the script, Layer 1 refers to the Ethereum blockchain, while Layer 2 refers to scaling solutions built on top of Ethereum to enable faster and cheaper transactions, such as Optimism and Arbitrum.

How does the script describe the process of moving funds between different layers?

The script describes the process of withdrawing funds from a broker to a MetaMask wallet and then bridging those funds from one layer to another, specifically from Optimism to Arbitrum.

What is the purpose of using a network like Arbitrum or Optimism in the script?

The purpose of using networks like Arbitrum or Optimism is to take advantage of their scaling solutions to perform faster and cheaper transactions compared to the main Ethereum network.

What is the significance of the 'swap currencies' feature in the GMX platform?

The 'swap currencies' feature in the GMX platform allows users to exchange one cryptocurrency for another, similar to a spot market, before engaging in leverage trading.

What is leverage trading and how is it demonstrated in the script?

Leverage trading is a method of trading where a small amount of capital is used to control a larger amount of investment,放大 the potential gains (and losses). In the script, it is demonstrated by the user selecting a 4x leverage to trade USDT for Ethereum.

How does the script address the issue of trading restrictions in certain countries?

The script addresses the issue by suggesting the use of decentralized trading protocols, which can bypass certain country-specific restrictions on margin trading.

What is the purpose of the tool mentioned at the end of the script?

The tool mentioned at the end of the script allows users to view and potentially copy the trades of successful traders on the GMX platform, providing a way for less experienced traders to learn from the strategies of more successful ones.

What is the importance of the GitHub repository mentioned in the script?

The GitHub repository mentioned in the script contains the source code of the trading platform, which could potentially be used by developers to create tools or notifications based on the trading activity of successful traders.

What is the next step suggested for viewers interested in trading futures markets?

The next step suggested for viewers interested in trading futures markets is to attend the upcoming class that will go in-depth on understanding how to pick a trading pair and which trading pairs to use as a beginner or a pro trader.

Outlines

00:00

🌐 Navigating Crypto Trading Restrictions

This paragraph introduces a class focusing on alternative trading options for users in countries where margin trading for cryptocurrencies is restricted. The instructor outlines the use of decentralized trading protocols like GMX, dydx, and perpetual, and emphasizes the necessity of having a compatible wallet like MetaMask. The process of transferring funds from Layer 1 to Layer 2 networks is explained, including a demonstration of moving funds from a broker to MetaMask and bridging between different scaling solutions like Optimism and Arbitrum. The segment also covers the importance of selecting the right network and provides a walkthrough of connecting the wallet to the trading platform.

05:01

🔄 Leveraged Trading on Decentralized Platforms

The second paragraph demonstrates how to trade with leverage on a decentralized trading protocol, using GMX as an example. It details the steps to connect a MetaMask wallet, swap currencies, and set leverage levels for trading. The instructor shows a practical example of going short on the market without prior market analysis, highlighting the process of approving transactions and confirming trades. The paragraph also touches on the ability to close positions, set profit targets, and the potential of using testnets for practice. Additionally, it introduces a tool for copying trades from successful traders on the platform, emphasizing the value of learning from their strategies and the possibility of creating a notification system for tracking their trades.

10:02

📈 Analyzing Successful Traders' Strategies

The final paragraph discusses the importance of analyzing successful traders' strategies on the GMX platform. It showcases how to view the performance and trade history of top traders, including their leverage usage and the number of wins and losses. The instructor suggests that by studying these traders, one can gain insights into effective trading strategies. The paragraph also hints at future classes that will delve into choosing the right trading pairs and concludes with a sign-off, inviting viewers to join upcoming sessions.

Keywords

💡Margin Trading

Margin trading refers to the practice of borrowing funds from a broker to trade securities, allowing traders to leverage their investments. In the context of the video, it is mentioned that many countries are restricting access to margin trading for cryptocurrencies in the futures market. The video aims to provide alternatives for individuals in such restricted countries.

💡Cryptocurrencies

Cryptocurrencies are digital or virtual currencies that use cryptography for security and operate independently of a central bank. The video discusses trading these digital assets, particularly focusing on the challenges faced by users in countries that restrict margin trading for cryptocurrencies.

💡Futures Market

The futures market is a financial marketplace where participants trade standardized contracts that agree to buy or sell an asset at a predetermined price at a specified time in the future. The video script discusses trading in this market, specifically with cryptocurrencies, and how to navigate restrictions.

💡Decentralized Trading Protocol

A decentralized trading protocol is a platform that allows for the exchange of digital assets without central authority or intermediaries. The video emphasizes using such a protocol, like GMX, for trading derivatives in a decentralized manner, which can be an alternative for users facing restrictions in traditional markets.

💡MetaMask

MetaMask is a popular browser extension and mobile wallet that allows users to interact with the Ethereum blockchain and use decentralized applications. In the script, MetaMask is used as an example of a wallet that can facilitate trading on decentralized platforms.

💡Layer 1 and Layer 2

In blockchain technology, Layer 1 refers to the base protocol, such as Ethereum, while Layer 2 refers to solutions built on top of the base layer to improve scalability and reduce fees. The video script explains moving funds between these layers, specifically from Ethereum (Layer 1) to Optimism or Arbitrum (Layer 2 solutions).

💡Leverage

Leverage in trading is the use of borrowed capital to increase the potential return of an investment. The script mentions setting leverage levels, such as 4x, which allows traders to control a larger position in the market than the amount of capital they have.

💡Short Selling

Short selling is a trading strategy where a trader sells a security they do not own, with the intention of buying it back later at a lower price to make a profit. The video demonstrates how to go short on the market using a decentralized trading protocol.

💡Decentralized Exchange (DEX)

A decentralized exchange is a platform that allows peer-to-peer trading of digital assets without the need for a central authority. The video script provides an example of using a DEX, GMX, for trading cryptocurrencies with leverage.

💡Bridging Tokens

Bridging tokens refers to transferring digital assets from one blockchain network to another. The script describes the process of bridging USDT from the Optimism network to the Arbitrum network to take advantage of different scaling solutions.

💡Trading Fees

Trading fees are charges paid by traders for executing trades on an exchange. The video script mentions a referral code to get a discount on trading fees, indicating the importance of cost management in trading.

💡Copy Trading

Copy trading is a strategy where novice traders replicate the trades of more experienced traders. The script discusses a tool that allows viewers to observe and potentially copy the trades of successful traders on the GMX platform.

Highlights

Class 18 of the step-by-step guide on trading the futures market focuses on decentralized trading protocols.

GMX, dydx, and perpetual are mentioned as platforms for decentralized margin trading.

MetaMask is used as the primary wallet for the demonstration.

The importance of adding funds to the wallet for trading is emphasized.

Instructions on moving funds between Layer 1 and Layer 2 blockchain networks are provided.

Demonstration of withdrawing funds from a broker to MetaMask using USDT as an example.

Explanation of choosing a network for transactions, with a focus on Optimism and Arbitrum.

Guide on bridging tokens from one layer to another, specifically from Optimism to Arbitrum.

The process of connecting a wallet to GMX for trading is outlined.

Swap functionality in GMX is compared to a spot market for currency exchange.

Leverage trading options up to 100x are discussed, with a 4x example given.

A walkthrough of shorting the market using USDT on GMX is provided.

Instructions on closing a trade and setting profit targets using GMX.

Mention of using testnets for practice trading without risking real money.

Referral code provided for trading fee discounts on the platform.

Introduction of a tool for copying successful traders' strategies on GMX.

Discussion on analyzing and potentially automating notifications for successful traders' moves.

Upcoming class on picking trading pairs for futures market trading.

Transcripts

more and more countries are restricting

users from accessing margin trading when

it comes to trading cryptocurrencies on

the futures market in this class we're

going to look at several options that

you can use if your country is

restricting you from accessing margin

trading this is class 18 of our

step-by-step guide on how to trade the

futures market obviously in this class

we're focusing on

how to trade the derivatives market on a

decentralized trading protocol let's get

started we're going to be using gmx for

this example but you can also use dydx

and also perpetual to get started just

make sure that you have your meta mask

installed or whatever wallet that you're

actually using you can use multiple

wallets but in this case i'm going to be

using metamask not only that but you

also need to add funds on your wallet

i'm going to be showing you step by step

how to move funds from layer 1 to layer

2 or to move from layer 2 to other layer

2 scaling solutions to do that i'm just

going to move to my broker here and you

can see i have a little bit of fans here

so what i'm going to do is that i'm

going to withdraw these funds to my meta

mask over here so i'm going to click on

withdraw

and i'm just going to come to my

metamask wallet over here

and i want to go ahead and copy my

wallet address so once that i've got

that sorted out i'll come here and i

actually want to withdraw usdt

then i'll actually paste my wallet

address over here just make sure that

you have your wallets pasted correctly

so from here i'll then choose a network

you can see you've got erc20 ibitron one

again this platform that we're going to

be using here is on abitram and also on

avalanche you can see you've got

avalanche and arbitron so let's come

back here

over here i will choose

let me look for a cheaper network i'll

choose optimism i'll show you how to

bridge from optimism to abertron so now

i'm just going to go ahead and withdraw

everything and i can go ahead and

confirm my wallet which is the first

three digits

and the last three digits so i'm just

gonna come here to my wallet again

then i'll confirm the last three numbers

in this case you can see these numbers

are correct i'll go ahead and withdraw

this

so now we're actually done with drawing

which means we have successfully moved

these funds from our wallet to our meta

mask so what i'm going to do in this

case is to bridge these funds from one

layer to another layer so in this case

i'm going to come here and select usdt

you can see that our funds are already

here about 500 of them so i'm gonna go

ahead and click max so i'm basically

moving these funds from optimism

remember when we withdraw from this side

we use optimism

now when i actually come here you can

see that we do have these funds on

optimism i want to bring them over to

abertron so i'm going to go ahead and

send this over to abitrum

i'll switch networks

then go ahead and send these funds over

so now you can see that we have

successfully bridged the tokens from

optimism to other tram again you can use

any other chains but i just wanted to

show you that you can obviously move the

fans from layer one which is ethereum to

avert ram the next step is to come to

gmx to start trading from here all right

now that we actually preached our fans

over from optimism to upper tram we can

now go ahead and connect our wallet

so i'm gonna go ahead and just switch

networks

again if you don't have these networks

within your wallet you can just come to

this website here which is which is

chain list dot io once you're here you

can just connect this to your meta mask

for example if i look for a network that

i don't have within my meta mask i can

just click on add to meta mask which

will then add this network to your meta

mask or you can use this information

right here to add that network manually

but i don't want to do that so i'm going

to cancel this i just wanted to show you

that you can do something like that so

the first thing you need to know is that

you can swap currencies so this is

equivalent to a spot market you can swap

one currency for another for example

because we deposited that 500 usdt i can

just click on that and then swap that

usdt for ethereum but let's just come to

leverage trading again here you can

decide your leverage you can see you can

go up to dx but in this case i'm just

going to keep it let's say at 4x for

example

then

what i'm going to do is that i want to

trade

with

this usdt

so i'm going to click on max

so in this case i want to go short right

let me look at that yeah i want to go

short on the market so in this case i

want to go short so i'm going to select

usdt again i didn't do any analysis i'm

just doing this for the sake of this

video then i'm going to click on max

i'm going to go ahead and approve this

and also approve that for the new meta

mask

so now you can see that i've approved

everything

now if you come here

maybe that's it's going to be a great

opportunity for us to go short so i'm

going to go ahead and show the market

from here

i'm going to confirm this

so this right here will be your position

and you can see that i'm holding about

1.19 ethereum so that's it because i'm

on 4x leverage so that's how you can

trade on leverage using this

decentralized trading protocol so a lot

of people have been asking me that how

do they trade especially for those of

you who are in america because when

you're in america sometimes these

centralized exchanges um do not really

allow clients or customers from america

so you can use this platform i'm gonna

leave a link in the description of this

video

so again i didn't analyze the market i'm

just you know showing you uh basically

how you shot you can see this thing is

fluctuating up and down that's really

made i want to close this trade just now

so right now you can see the trade is in

profit but again it doesn't really

matter i'm not trading this to make

money i just wanted to show you how to

short or go along on a decentralized

trading protocol so if i wanted to close

this position i'll just click on close

position over here from here you can

then click on max which means you

literally just want to close everything

then it will show you your losses and

how much money you're actually making or

you can go ahead and click on trigger

where you can for example put 1500 as

your target price which means when the

price reaches 1 500 you will actually be

taking profit of 150 us dollars from

there you can just go ahead and enable

the trade and then that's all that you

need to do so go ahead and play with

this again you can use other trading

protocols to actually trade on a test

net which means you don't necessarily

have to be using your own money but you

can play with this on a demo account so

i'll leave a link to that in the

description of this video for those of

you who want to get discount on your

trading fees just go to referrals and

once you're here click on traders and

actually put this code which is capital

to v double three that's all that you

need to do in order for you to get up to

ten percent of your trading fees i wanna

discuss this tool here which is

something really really amazing so i'm

just gonna go back again i'm gonna leave

the links in the description of this

video so this tool is really really

amazing for those of you who are just

getting started in trading or maybe for

those of you who are not really really

comfortable because here we can see the

most successful traders on gmx so i'm

going to click on dashboard what i want

to do here is to click one month

obviously i can select 24 hours seven

days or one month from here we can see

the most successful traders on this

platform you can see this month this

trader here has made over

hundred thousand dollars in profit and

we can see that they took 17 trade with

zero losses which is something very very

great so what we can do is to click on

this trader here and sort of like look

at all the trades that you know this

trader has taken she or he has taken so

if you actually look here you'll see

where they went long where they went

short and all that stuff so

for example here you can see

all these 17 traits with no loss so

that's amazing but the nice thing is

that we can actually

copy what this trader is doing this is

all the data coming in in the past uh 45

hours and you can see the last profit

they made was 35 000

77 so that was 10 hours ago so we can

actually come here and click and see

again guys if we go back you can see the

the trade history where this trader

actually was going long or going short

everything is detailed for you here on

the charts so we can come here and click

on this icon

and sort of like look at this trade in

more details you can see that this

trader here made 15 on the trade making

46 000

and from here you can see where it says

open which means this is where the trade

was open which is basically about 16

hours ago the margin collateral that was

used is 56 000 or rather 52 000

and

the opening price here was 1679

and then they closed this trade at 1682.

you can see that this person went short

went rather long because they bought at

1 1679

closing at 1682

so they just took advantage of that

small price different so you can see

that you can actually make a lot of

money if you actually have a lot of

collateral obviously this is not

financial advice i just wanted to show

you this tool and what i think i can do

here i'll you know speak to one of the

few developers that i actually know i

think it's possible to actually get this

data

from these traders if we can actually go

back you can see this is actually on

github so it's got a github repository

so which means if i click on that i can

actually be able to see the code the

source code of all this and how it

functions which is giving me an idea of

actually

coding something that can you know give

me a notification every time these

people take the trade i think that would

be a great tool because now you're

following someone who has actually a

proven record let's click back on

dashboard again i've got one month

selected here i can select in the past

seven days for example you can see this

trader took 11 trades with two losses

from here you can also see that they're

using 18x 25x 8x so this is the leverage

size that they're actually using in the

next class we're gonna go in-depth with

understanding how to pick a trading pair

for those of you who want to get started

with trading the futures market and

which trading pairs you should be using

as a beginner or as a pro trader that

glass is connected coming up next i will

see you there goodbye for now peace