A clear picture of a starter guide to trading Bitcoin leveraged trading on BITMEX
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There is a fee table in BITMEX that you are must to check and understand that or market trades fees are 0.075% of your position for both entry & exit. So total fees on a $1,000 trade with 100x leverage are $150 [100 x $1,000 x 0.00075 x 2]. Fees are 15% in that case.)
Introduction word for Bitmex leverage trading:
The most profitable trade on a BITMEX is a shorting on a Bitcoin market.
Almost all traders do trades only for a long of Bitcoin when we have a bull market. But there is a chance to earn big money when we have a bear market and Bitcoin price plunging hard. BITMEX provides us opportunity to turn bear market into a wealth market for us. If you do not learn how to SHORT BITCOIN you are losing a hell amount money that you could earn on shorting bitcoin.
The global crypto market has reach his summit on January of 2018 and from that time the wales are shorting Bitcoin right to 6000 dollars per one Bitcoin mark. If you did nothing and stayed on a Bitcoin you have lost nearly of a 70 %profit of a 2017 Bitcoin bull rally or even lost all of your money.
There was a chance not to lose money but even earn a hell a fortune with a shorting bitcoin.
There is an example how people earn 500 % from shorting a Bitcoin in a right time.
You can buy a single Bitcoin with 0.1 Bitcoin in your BITMEX account wallet with an Initial Margin: Example of 25x Leverage
To understand BITMEX leverage working we should check this one example. There is a chance to buy a one Bitcoin, let’s say it cost $6000 per one Bitcoin, with only 0.1 Bitcoin in your BITMEX wallet. You use leverage trading with a 10 x leverage position on a BITMEX and you pay only 10 % Initial Margin.
Or you can short Bitcoin with same rules and prices and earn from it. The beauty of this is that you can buy or sell a big portion of Bitcoin that you do not own and the risk is very small if you will use leverage with caution.
See on a picture how we set a buy for a Bitcoin with a leverage of x 25 for a Bitcoin Long
As we see in a picture on top I have a Bitcoin Long leverage trade x 25 on a BITMEX. You all can increase leverage rate to x25 but only when you will have skill for leverage trading as you will definitely lose all your deposited.
Leverage trading is very dangerous so use it with caution and start with low bids with a leverage max x5
As we see on a picture I have opened Bitcoin Long leverage trade with a x25 so it means that I have bought a Bitcoin Long position x25 bigger that I have money for this trade. And yes there is a big risk that market will turn a round or shake a Stop Loss positions from all who have made a Long right now, but I am ready to lose my money as I made my work before I entered into market. I understand where goes market, I see that price have crossed important TA marks and lines. Only knowledge gives me a chance to open big leverage trade as I am sure that normal market condition will make me money on this trade.
The Place Order Box (top-left box)
Quantity: The quantity of the trade is $6612. This is your position. But the money you place at risk is less than this, depending on what leverage you choose.
Cost: The cost is 0.0158 BTC i.e
Initial Cost = (1/Leverage x Position) + (2 x Taker Fee) = (1/25) x 6612 + 6612 x 0.0015 = $274.098
If my entry price is $6612 my liquidating position price is $6385. My profit size for a 1000 $ per BTC price rise is a $ 2507
From this example we see how much money I can earn using BITMEX leverage Bitcoin trading.
But we always must remember as bigger leverage we have and bigger risk so use leverage with caution.
When we use some amount of our wallet XBT we have spare amount that we can use on a different trade. These amounts are shown as an Available Balance to execute the trade.
Profit & Loss Scenarios on BITMEX bitcoin trading with 10x Leverage Long
You should look carefully and understand it that yours profit may exceed a 100%, but you will never lose more than a 100% of your trade, no matter how much Bitcoin price will fall in market.
Profit & Loss Scenarios on BITMEX bitcoin trading with 10x Leverage Short
Let’s check again what do we have with a long Leverage Bitcoin trading: your profit on a long Bitcoin trade may be higher than 100% by orders of magnitude. You should remember that profits are unlimited with a BITMEX long trading you only have to pay maintenance fee for long time open trade.
And yours lose on this BITREX Bitcoin Long trade is not bigger than a 100% orders price.
We may say right this, we have unlimited profit and limited losses and it makes all BITMEX traders Limited Risk contract. If you are leverage trading Bitcoin in other broker there is a chance that the Exchange will Margin Call the client for Maintenance Margin to supplement his Initial Margin when the price approaches the Bankruptcy Price, and you can lose a lot more than your Initial Margin. So you would get a Profit/Loss Scenario like this for a Long:
BITMEX leverage Bitcoin trading mechanics works as a Liquidation Price a fraction above the Bankruptcy Price.
When markets go against you and comes to yours Leverage position liquidation the Liquidation Engine takes over your position and liquidates it automatically at market.
This BITMEX leverage trading a stop loss mechanism prevents you from losing all of your money in an account and closes only position you have opened before it.
Selecting Your BITMEX Bitcoin Leverage
Here we will see BITMEX Bitcoin leverage levels and the adverse change in price that will result in Liquidation of your open trade.
If you use bigger leverage than closer will be your liquidation price for this trade.
BITMEX Bitcoin Long: Liquidation price - Entry Price
BITMEX Bitcoin Short: Liquidation price > Entry Price
We do see above that shorting Bitcoin on BITMEX is much safer than going Bitcoin Long. We see it from a different percentage is required to cause Liquidation when you go Short than when you go Long.
If we use a x1 Bitcoin leverage for a Long trade, there is small chance that trade may be liquidated but if we go opposite for a short leverage there is no liquidation at all.
Strongly suggest: Bitcoin leverage trading on BITMEX maximum with 25x Leverage
BITMEX leverage trading system gives you a chance to trade up to x100 leverage trade. DO NOT EVER use this leverage x100 for Bitcoin trading- you will lose all your Bitcoin.
You should remember that the most risk and profit rate is use x 25 leverage on BITMEX Bitcoin trading.
The difference between the Liquidation and Bankruptcy Prices at high leverage BITMEX Bitcoin leverage stacks the statistical odds against a winning trade. There is almost 0 chance that you will win this leverage trade as Bitcoin price movements are instant and very drastic.
Read further to know more Why You Should Never Trade 100x at BITMEX: The Liquidation Price vs. Bankruptcy Price Gap Means You Lose
If you buy Bitcoin with a x100 leverage on a BITMEX your liquidation price will be $100-$150 from your initial buy price. It is possible only for a high skill trader who have a tremendous luck and gut feeling where and how fast will go price to trade a x100 leverage trade on a BITMEX.
Difference between BITMEX Market vs. Limit
There is a turnover to use Market or Limit is one of your most important decisions.
Not many people know that BITMEX charges extremely high fees to leverage trade takers. It is people who use Market tab for their trade execution.
These people pay money for a market maker who hold trades with a Limit Tab. Difference is that if you use BITMEX Market tab you will pay extra fees but you will be able to sell or buy instant so this part should not be forgotten. And I do suggest use it for a new trader. If you are old trader and you have skills to read market you have to use BITMEX Limit tab orders as it is way cheaper. You have to not forget that Limit orders will not be executed instant but will be on a specific price.
BITMEX leverage taker fee is 0.075% of total open position.
BITMEX leverage maker fee is 0.025% of total position Rebate
BitMEX fees for market trades are 0.075% of your total leveraged position (not just your margin) for both entry & exit.
BITMEX leverage maker vs taker example:
We can calculate total fees on your leverage Bitcoin trade with a $1,000 trade with 100x leverage. If you still don’t know how it works you will buy a leverage trade with a $1,000 Margin to open a $100,000 position.
Do you feel power of a leverage trade?
Your Bitcoin BITMEX trade fees will be Total Fees = 100 [leverage] x $1,000 [Margin] x 0.00075 [Rate for Market order] x 2 [Entry + Exit] = $150
As do u see BITMEX will charge you a 15% of your $1,000 trade in the example.
We do have a question why pay 15% for market trading when BITMEX pays you 5% for trading with Limit Orders?
Do not be fooled by this example. You can use Limit order if you are skilled trader and you understand how to trade leverage Bitcoin on BITMEX if you are not skilled trader better pay more fees on BITMEX for Market Tab use either do not lose whole you position or miss a profitable trade.
Make your first BITMEX leverage trade with a Long/ Short BTC with $50 and 2x Leverage
This trade is only for a beginner to familiar with the BITMEX leverage trading. You will open a $100 at 2x Leverage which means your Cost is $50.
The most you can lose on this leveraged trade is the Cost: $50. You lose that if the market price falls 33% to the Liquidation price.
If you will press a BITMEX Buy Market button this confirmation screen pops up. Your order is not placed until you confirm Buy in this screen.
Always read careful what it is written, what price you start trade, how much this trade will cost you if you will fail.
The most important BITMEX leverage trade rule is knowing your Risk Management
This is a beginner example how to start BITMEX leverage trading without a bit possibility to lose all yours deposit in one time.
Deposit a small amount into your BITMEX account so that even if you screw up you know the most you can lose.
Start trading on a XBTUSD Perpetual Swap which is the most heavily traded. You have to understand how this market works before you go to a ALT coin trading.
Do not go instant trading on a Bitcoin futures and Alt coin trades, you will definitely burn out your deposit.
Start leverage trade with a 2x, 3x or a maximum 5x using the Leverage Slider Bar. DO not set a high leverage or you will be liquidated very fast and stressful way.
Do not select Cross on the Leverage Slider Bar. This exposes your whole equity balance and is risky.
Set up your first leverage BITMEX trade and caution on a cost field. Here you will see maximum you will lose on your trade. Leverage trade cost must be higher than you have on your BITMEX account balance.