The 4 Major Reasons Why Pro Traders Prefer BitMEX To Other Brokers
Although some other big brokers also offer leverage, BitMEX is outstanding: With up to x leverage the broker fulfills the wildest dreams of real gamblers. However, the platform of course first but foremost serves serious traders who exactly know about the right amount of leverage to use in their trades, respecting reasonable risk to reward ratios. They share their trade setups in live trades that members can copy trade. Market reviews and live streams and a lot of well made educational stuff.
Check our review here. BitMEX comes with some special features making the broker one of the most popular ones due to their liberal policies. Traders can cashout their gains without any restrictions which is a feature not every broker provides.
Moreover BitMEX has a highly professinal trading engine offering all kinds of advanced order types a professional trader might need. Trading on BitMEX is a bit different to trading on other brokers. On BitMEX you open a position in the direction you think the price will go, in order to gain the price difference as profit in case the trade get successful. You are buying contracts USD units for long buy to sell higher or short sell to buy lower trades and every trade must be closed at some point your target.
At BitMEX a long trade buy , has to get closed at some point by a sell order , otherwise the position would stay open for ever and your equity would be stuck in this trade.
While you have money in the open long trade, you cannot withdraw it in BTC. While on other brokers you can withdraw your Bitcoins if you have bought them in a buy order.
If you are in a lucky trade where price just goes higher and higher for weeks you might not close your long trade during that time, so that would be a case where it stays open for quite a while. But you get the point — that pressing the buy button on BitMEX is something different to pressing the buy button on other brokers or exchanges. This is also the way how Forex margin trading works. Opening a long position should usually consist of 3 parts.
The third step right afterwards is to set a take profit order. So either your stop loss or your take profit order will close the trade.
Those are the basics of a simple long trade. After your sell order has been filled you set your stop loss order buy order in this case somewhere above your entry and your take profit at your predefined target.
So when a trade is running you should see your stop loss order being placed on one side of the price line and your take profit order on the oder side until one of them gets executed. No matter if you long or short, in both ways you make money if the trade runs well.
Your gains is always the difference between entry and exit. At leveraged positions gains are higher than without leverage, but also risk is enhanced during the trade. Generally there are two kinds of fees regarding a trade. A trade consists of two parties. One has made an offer and another one accepts the offer.
So if you publish an order that is not being filled right away limit order , then your order is most likely first just placed in the order book, waiting for someone to accept the offer. As soon as somebody else sets an order that fits yours, the deals is being made.
In this case you where the maker, the other one was the taker. Here are the BitMEX fees you guys have to pay:. If you set limit orders: If you set market orders: 0. BitMEX has 2 different kinds of products you can trade. In that case you do long and short trades based on your margin and you can choose as much leverage as you like. Perpetual Contracts trade at the underlying reference index price current Bitcoin market price.
Please read this article to learn what exactly are Futures. Yes, it is exactly the same. The reason why some brokers use XBT instead of BTC is because there are certain common abbreviations for financial products for broker listings. The X in front refers to the fact that something is not a currency with specific national origin. Before you actually enter a trade, you should be using a high probability trading strategy in order to find the best trade setup, meaning the exact points where you will enter the market, where you will get out in case price turns against you and where you will take profit.
Note: Position size is nothing you decide about randomly if you want to trade professionally and not just gamble. The position size results from your risk amount your capital x risk , the entry and the stop loss. So the position size has to be calculated always. Once you have that, you can push the buy or sell button on BitMEX, where you will be offered to add some leverage. If you do so, the leverage setting will not effect your positions size.
When using leverage, two things are added to your trade setup:. There will be a liquidation price at which your position would get forcably closed in case price turns against you, and. So adding leverage at the moment you open the position just adds the liquidation price which would otherwise be much further away from your entry, and it will increase your profits.
Your position size stays the same. Adding leverage is something you can do, but at the beginning you should practice without leverage in case you are a margin trading beginner. You see that the liquidation price is something very important. You have to know at which price you would lose your entire position.
Also BitMEX has a liquidation price calculator on the top left-hand corner of the user interface, where you can calculate this price in advance and set your stop loss order accordingly. Important: Always set your stop loss order at a point where it would rescue your position form getting liquidated. This makes a huge difference regarding the amount you would lose. Liquidation means your margin is gone, stop loss means only a part of your margin is gone.
Example of short trade settings in liquidation price calculator — notice the huge difference of liquidation price between isolated and cross margin setting:. Buy or sell either as market order or as limit order. Market order means the order gets filled right away at market price.
Since the market price can change in fractions of a second you might not get the exact price you were expecting. Market order makes sense if you want to make sure you get into a position right away, no matter what. At limit orders you get the exact price you wanted. You set them and wait till they get filled. Depending on your trading strategy you can choose between closing the trade right away in case a certain price gets hit, or you can choose a triggered stop loss order Stop Limit and decide the trigger price that will set the order.
Generally stop market orders are always a bit more expensive because a market order always makes you the taker, so you pay the taker fees. However, especially at the beginning, it makes sense to choose stop market orders to make sure you get out of the trade right away when needed. For taking profit again you can decide between limit and market order.
You could also just use a standard limit buy or sell order to close the position. The purpose of this order setting is to safe you from automatically getting into new positions under certain circumstances:. Then your stop loss order would be to sell contracts in case your second order gets executed.
It all depends on your trading strategies. You have to know a trade setup that works in of all cases. Then you only need a to always use a risk:reward ratio better than The calculation is fairly easy. Imagine you day trade with those numbers, you will build wealth slowly but steady. Only if your expected reward is always higher than the loss you would take, you are going to be profitable if every second trade is a winner. Your Stop loss must always be closer than your target. This means that you have to stick to your trading plan, to the details of your strategies.
You may never change the parameters while the trade is running. If you get caught by emotions and move your stop loss or target around, you get into serious trouble. Of course you can always move your stop to break even or better, but moving the stop loss further away from your entry has proven to be generally a big mistake.
Never move your stop loss further away from your entry 2. Enter the trade exactly at the point your trading strategy dictates.
Never enter too late. This is especially comfortable on BitMEX because it calculates everything for you. The platform is just very efficient. Your calculated position size can exceed your account balance.
Learn further below how to calculate position size. Position size is 3, USD. Additionally set 5x leverage optional.
Bitcoin Margin Trading: Leverage, Margin, and Shorting Explained By A Professional Trader
What is Bitcoin Margin Trading?
Kraken Futures Getting Started. Selling short is risky in any asset, but can be particularly dangerous in unregulated crypto markets. What happens if I hold a position until maturity? The purpose of this order setting is to safe you from automatically getting into new positions under certain circumstances:. On BitMEX you open a position in the direction you think the price will go, in order to gain the price difference as profit in case the trade get successful. For those tradde who believe that bitcoin is likely botcoin crash at some point bitcoim the future, shorting the currency might margin trade bitcoin inverse a good option. Never enter too late. As mentioned, however, this method of trading can also amplify losses and involves much higher risks. Trading futures can be advantageous in a number of ways compared to trading the underlying asset directly: Futures allow benefiting from price increases as well as declines Futures provide financial leverage Futures can be used to hedge price risk Futures are associated with low transaction fees What instruments do you list? Yes, it is exactly the. Essentially, margin trading amplifies trading results so that traders are able to realize larger profits on successful trades. Chat directly with one of our client engagement specialists about btcoin specific needs Chat Now Like what you see?