EtherMium Review: A New Type of Decentralized Exchange
October 26, 2018
Exchange | Latest News | Reviews
Due to the increasing popularity of decentralized exchanges, many exchanges like EtherMium aim to offer more features than your standard DEX. With so many “non-feature rich” decentralized exchanges like EtherDelta and IDEX, which provide a very limited amount of features, EtherMium’s primary goal is to allow the same features found on a centralized exchanges within a decentralized platform, thus creating the best possible decentralized exchange available.
Like most other decentralized exchanges, they don’t require KYC from their users. You’ll also be allowed to trade within seconds of registering. The company is getting ready to launch their options trading solution as well as allowing the opportunity to invest in ICOs within their decentralized platform.
Regarding safety, Ethermium never holds any of their customer’s funds. These funds stay within their corresponding smart contracts, which if you’re not familiar with, act as independent programmable bank accounts. Due to this technology, customers are able to manage their funds independently without exchange owner intervention.
Regarding cryptocurrency selection, EtherMium offers a wide range of Ethereum ERC20 tokens that can be traded at any given moment. In the near future, the company plans on launching a derivative trading solution which makes it possible to trade non-Ethereum cryptocurrencies (Bitcoin, Ripple, Litecoin, etc) with up to 10X leverage.
EtherMium will also allow the trading of real world assets like commodities, company stocks, and indices. The company believes that a decentralized futures trading platform with the ability to leverage trades, will revolutionize the DEX trading world forever.
Last but not least, EtherMium plans to offer the ability to invest in ICOs while taking advantage of their security, anonymity, and decentralization.
First of all, the company makes it very quick and simple to start trading due to its decentralized nature. No longer do you need to register or complete KYC requirements. Simply create a new Ethereum based wallet, deposit your Ethereum into it, and start trading in minutes.
As you can see from the screenshot below, the EtherMium trading screen is very well-designed. It offers more trading options than any other current decentralized trading platform like stop limits and market orders.
The platform also offers extremely competitive trading fees along with no withdrawal or deposit fees. Their current trading fee model allows market makers to trade with 0% fees while takers only pay 0.2%.
The most revolutionary feature EtherMium plans to release is the ability to trade leveraged futures on a decentralized platform. This is currently unheard of! This will allow investors to bet on the prices of certain assets including cryptocurrency, stocks, and other commodities.
The company currently plans on offering leverage up to 10X for starters, however this will most likely increase as the platform expands and gains more popularity. Their goal is to start leverage trading with available assets such as Bitcoin, Dash, Litecoin, and Monero. After such, they will deploy other trading channels with a focus on company stocks. After that, commodities will be added such as oil, gold, and other tradable assets.
Another noteworthy feature of EtherMium will be the ability to short an ICO. This is a feature that no other exchange can currently provide. This is yet another feature that will “game changing”, not only with decentralized exchanges, but within the crypto trading community.
EtherMium will soon release a mobile application which allows users to trade on any mobile application like Android and iOS devices.
EtherMium will most certainly change the way decentralized exchanges are perceived. Users will be able to secure their funds on smart contracts as well as the ability to trade other “non-cryptocurrency assets” you can’t currently find on other exchanges. With game changing features like DEX futures leverage trading and the ability to both invest in ICOs as well as short them, will undoubtedly create a frenzy of new users to their platform.
At the moment, the exchange currently has one of the most intuitively designed and easy to use decentralized trading platforms available today. With their soon to be released mobile app looking equally as appealing, I’m quite sure that the company will experience a flood of new traders that will look forward to trading on a decentralized exchange like they’ve never experienced before.
Terrexa is a new face on the scene, only operating since the first half of 2018, but it’s starting to create some interest. Based in Cyprus and backed by Prime Marshall CY, the exchange platform tech is powered by Leverate, a fintech software company. The new service isn’t well-known at all, but that may be about to change as the platform matures.
What’s Terrexa all about?
Unlike most of the large-scale exchanges out there, Terrexa doesn’t operate like a traditional exchange platform. You don’t transfer your funds, onto the platform, whether they are fiat or cryptocurrency, so Terrexa never really has your money. The exchange of funds happens “on the spot”. There is no trading of currencies; it is a straight exchange with funds going directly from bank to a wallet or from a wallet to a bank.
Terrexa has also released a Bitcoin wallet app that’s available for iOS and Android. As far as wallets go, it’s a pretty good hot wallet. If you’re using the Terrexa platform to purchase Bitcoin, there’s an integrated feature that connects you straight from your mobile wallet app to the platform. It’s not an essential tool; you can use whichever wallet suits you. However, you don’t have to use the Terrexa exchange to use the wallet.
At present, there are only two cryptocurrency coins to trade with using EUR or USD, which are Bitcoin and Ethereum.
There are fees on this exchange, much like any other. When you see the price to buy, it is not the market price at that time there is a 5-6% markup*. The fees marked by the payment options for credit card and bank transfer are 4% and 2% respectively and are subject to banks and card provider’s fees.
When selling Bitcoin, the same fees apply. You can’t have the fiat transfer sent directly to a credit card, so a bank transfer is the only option available and the 3% transfer fee applies. There is also the 5-6% markup on the selling price.
This markup is the same as charges at foreign exchange desks in Forex trading. Those places aren’t there for charity; they need to generate profits, so they can do this by charging a commission or covering a spread between the buy and sell price.
It’s best to purchase BTC or ETH with local currency (EUR or USD) as a starting point for new traders . They also get the opportunity to sell it back.
Terrexa is not available for customers in the US. However, it is open to users in most of the rest of the world, excluding risky countries such as North Korea, Syria, Cuba, Iran, and any other country that’s designated as an increased risk by International law.
The truth is that anything connected to the internet can be hacked. However, hacking wasn’t always a problem.
The History of Air Gap Technology
Data used to be held offline, in what’s now known as cold storage. Data on external paper cards, then moved to tape and digital media as technology evolved. The first computers built were by default on cold storage or ‘air gap’ technology.
Even when networks were initially built, much of the data still had to be manually connected to the system by adding in the media to a device. In the early days, sensitive codes and information were kept locked in vaults accessible by an authorized individual or in some cases, by multiple people required to key in simultaneously. This approach was the genesis of multi-signature authorization.
Eventually, with the invention of the internet, those computers and that data could be connected to an outside, worldwide network. The concepts upon which the internet was built had some basic principles of security within them, but the exchange of data and the ease of doing so was paramount in the original architecture of the web.
Sensitive institutions were slow to add their most critical data to the internet, and all-important military institutions initially relied on a manual air gap, where a command was sent to a person who would retrieve data devices out of a vault and connect them to a machine for a short period in which they needed to be used.
Some institutions still rely on these methods. The Russian military is famous for its continued reliance on typewriters for some of their most sensitive documents – if it’s never digital, well, it’s certainly a lot harder for your enemies to get their hands on it.
The value of air gap technology is unparalleled in its ability to hide data away from digital thievery; however, inaccessibility has always been its shortcoming. With the institutions using the tech over the course of history, having the physical manpower on hand to mount drives online at a moment’s notice was not an issue, but the corporate application of this technology requires some automation of that process to scale and serve the needs of millions of customers simultaneously.
However, how to bridge that gap without systems being online? The fact is that with a recent invention, human interaction, and the resulting security risk those touch points entail are no longer required to remotely close an air gap.
Application of Air Gap in Crypto Custody
Individuals have been storing sensitive data on cold storage devices for decades. USB thumb drives are ubiquitous across society these days, and their use for storing cryptocurrency keys began almost as soon as currencies were first invented. Over the years, the complexity of these drives has evolved, and now cold storage wallets like Ledger or Trezor are de rigueur for smaller independent investors.
However, these drives are not a viable solution for larger investors who need instant access to their funds but who do not wish to take the risk of employees carrying around their codes. Additionally, for institutions the gaping holes in the security of these devices, and their applicability to the global needs of their clients renders them useless.
Beginning in 2013, institutional grade custody providers came to market to provide offline storage of digital assets. Amongst the first of these was Xapo, a group focused on serving the needs of long-term holders of cryptocurrency. Xapo built vaults within mountains for the long-term cold storage. Since the founding of this company, many other institutions offering deep cold storage have entered the market.
Most recently, the Winklevoss twins announced a cryptocurrency-based patent in the air gap space, lending even more credibility to the application of the technology. The solutions all rely on a combination of codes on digital or physical (paper or other) media in coordination with some vaulting solution. These options are great if you don’t need to access your keys to make trades; however, trading is a key to doing business.
All of these solutions have the same issue which has vexed institutional investors for years – entirely locking them out of the market in many cases – and that problem is accessibility. The typical solution, like Xapo, requires a 2-day notice to bring your keys online manually for you to make a transaction. This delay means these solutions can’t meet the needs of active investors who need access at a moment’s notice. Additionally, the additional human interaction point represents a significant risk to data.
Remote Automated Air Gap Security (RAAS)
In early 2017, Tony Hasek, one of the founders, of Goldilock was working with a company offering deep cold storage for physical assets – mostly precious metals. He had been trading cryptocurrencies for years and was worried about the constant breaches suffered by even the largest institutions, starting with Mt. Gox back in 2011. Not wanting to carry his codes around, he started thinking about ways to keep them offline using some of the same concepts of cold storage combined with some analog technology he’d worked with back in the 90s.
Combining forces with his co-founder Jarrod Epps, who had also worked with analogue telephony solutions, the two collaborated for several months to build out an architecture which would allow all data to be kept offline in a vaulted, air gap, cold storage state until the exact moment the owner of the data wanted to bring it online (also known as ‘hot’).
By relying on a sophisticated combination of legacy offline technology as a trigger mechanism for remotely-toggling data nodes on/offline, alongside cutting-edge cryptography and biometric gateways, and adding in options for remote multi-sig approvals, the two filed a patent for a unique way to access cold-stored data at a moment’s notice. Also, they built it in a way so simple and secure that anyone with a mobile telephone could use it.
This new RAAS technology (pronounced ‘race’) allows anyone to access their data anytime from anywhere that he or she has a mobile or landline phone.
RAAS into the Future
Remotely accessible air gap technology is truly transformational for the handling of all data across the internet. Institutions such as banks, credit rating agencies, video distribution groups, software developers, healthcare record custodians, crypto funds, crypto custodians, and crypto exchanges have all reached out to get on the waiting list to use this technology.
Outside the cryptocurrency space, being able to bank, manage credit data, health information safely, even personal photos and videos will transform the way consumers interact with the internet, allowing them to do so without fear of hacking, identity theft, or hijacking of their credit.
Coinspectator is a highly respected cryptocurrency news aggregator that is dedicated to showcasing 1000s of cryptocurrency news sources from all over the world.
Located in the center of the site, you’ll see a list of news articles that you can scroll through, which are all dedicated to the cryptocurrency industry. Sources like CCN, Cointelelgraph, Coindesk, and many other reputable news sources (like ours) can be found on their easy to read news panel. They even contain noteworthy Twitter accounts from some of the most profound technical analyst in cryptocurrency today.
You’ll also notice that within each news article headline listed on Coinspectator, you can also rate various sources with a “thumbs up” or “thumbs down”. This will allow you to quickly segment between the popular news and other noteworthy articles from the rest of the “less desirable” news sources.
NOTE: They just recently included an ICO tab on the left-hand side of their site under the news link which lists all the upcoming ICO projects along with their corresponding social media outlets, company website, and other pertinent information.
Not only does Coinspectator aggregate news stories but they also maintain their own active blog located at https://blog.coinspectator.com. It’s regularly updated with popular news stories from across the industry ranging from cryptocurrency, tokens, blockchain news, crypto mining news, and so much more.
Excellent Mobile Responsiveness
Coinspectator has also ensured that the site looks amazing on all mobile and tablet devices as we were surprised to see how amazing and well laid out the site appeared on several mobile phones we tested it on. The interface is clean and clear with the navigational interface easy to find and use.
The mobile site experience was just as easy (if not easier) to catch up on the latest in crypto news as compared to my laptop computer which is an added bonus for those that are heavy mobile users.
Other Cool Features
Coinspectator offers a useful feature for users who decide to log into the platform that most casual visitors don’t seem to be aware of. The news aggregator is capable of filtering sentiment across a wide array of new sources. Users are allowed to express their opinions on news articles by voting on the headlines as being, Bullish, Bearish, Shilling, or FUD.
At a quick glimpse, users can now view what other people think on a particular news article which will allow you to derive a more comprehensive sentiment of a particular article or viewpoint.
The Team Behind Coinspectator
The team consists of a group of independent writers. The actual platform is self-funded and has not partnered with any advertising network to date.
Their twitter page lists the company’s location as being in the UK and as you might expect, they include many of their posts from the main Coinspectator news aggregator, including up to the minute updates across the crypto ecosystem. So if you prefer to get your information through twitter, this option would best suit your needs.
Coinspectator, which is a free news aggregation platform, is no doubt one of the most useful and essential tools when it comes to getting caught up on your cryptocurrency related news for the day. No longer will you have to browse through countless new sites in order to find the information that you’re really looking.
The site is ad free and includes an extremely well put together interface which looks both clean and user-friendly on both mobile and tablet devices.
Coinspectator is an incredible news aggregator which the team over here at CCJ uses quite often in order to stay updated on the latest happenings within the ever-changing world of cryptocurrency.
With the explosion of cryptocurrency, more online gamblers have demanded that casinos open up their spending options to this new digital asset, which seems to be a “perfect match” for these type of platforms.
FortuneJack is one of those platforms that not only accepts crypto, but gives you rewards for using it (we’ll cover more on that later). This extremely popular online casino caters “primarily” towards the crypto industry. With a wide selection of games, deposit bonuses, and a loyalty club where you can earn up to 20% cash back, there’s no dispute as to who is the true “king of the crypto casino”.
FortuneJack is also toted as the biggest Bitcoin gambling site on the internet. At the moment, it has a total jackpot of over 202 BTC with nearly 19 million individual bets placed. With almost more benefits than games, the platform’s latest “Booster Pack” promo package, ensures that new users have an incredible opportunity to make a small fortune while simply learning the ropes of the platform.
So let’s start off this review on the right foot and cover a few of the specials that FortuneJack has to offer.
Welcome Pack Special – the casino offers one of the best free specials for new players we have seen to date. You don’t have to put a deposit down and you’ll get 25 spins just for registering on the site.
Deposit Bonus – If you want to actually make a deposit, FortuneJack is offering a 110% bonus deposit (as long as the deposit doesn’t exceed 1.5 BTC). They’re also offering 250 free spins as a little “icing on the cake”.
Wednesday Low House Edge – This is probably one of the more unique offers out there. On Wednesdays, they have a special day called “Dive Day” where the house edge is only 0.7%.
Cash Back – They offer a 20% monthly cash back for everything you lose on the site, which is unheard of for most gambling sites.
One of the many great aspects to FortuneJack is how easy they make the sign-up process. This is an important component I tend to look for when reviewing any gambling site, as most make it more complicated than it should be. The team over at FortuneJack, has made it extremely accommodating for new users as it’s as easy as clicking the “Join Now” button and filling out a small registration form, in order to be up and running almost instantly. With no deposit requirements for new members, you can get started right away with little to no risk.
Another area where FortuneJack stands out above the rest of the competition is the fact that they introduce so many really great promotional offers on a weekly basis. The company also does a lot of holiday promotions, even for dates like Black Friday and Christmas. You can view their most recent promotions by clicking here. There are some promos that other sites would never even consider, like giving new users free play credits without a required deposit.
FortuneJack has always gone above and beyond your typical online casino when it comes to offering a wide selection of games to choose from (many of them are live which adds to the excitement of playing).
For example, they have nearly 900 slot games alone with cool graphics and animations like the Greedy Goblins, which is one of the crowd favorites and is only available on FortuneJack. Some of the other games include Tesla, Frozen Diamonds, Super-Fast Hot Hot, Booming Bananas, Lucky Seven, Rock’s Revenge, Billyonaire, Big Panda and a lot more. Those are just some of the most popular slot games on the site.
If you enjoy games that are a bit more random or luck based, you’ll want to head over to the lottery section and take a look over their vast selection of Keno games. We have to warn you though, Keno is one of the worst games you can play in terms of odds and this isn’t the fault of FortuneJack. The odds are inherently against you, no matter where you play. However, while composing this review, we found that FortuneJack has some pretty decent odds with regard to their bingo games, if you’re looking for a more “Keno style” gaming experience with better odds.
Many users enjoy the live casinos which can be categorized into 3 different categories.
Bet Games TV– these include games like dice, poker, wheel of fortune, lucky 7, lucky 5 and more.
XPro Gaming– you’ll find a lot of popular card games like different variations of poker, Texas Hold’em poker, Baccarat, Blackjack and if you’re tired of card games, head on over to the roulette table.
Evolution Gaming– this section includes many card games such as blackjack, baccarat and a vast array of poker variations.
FortuneJack is Mobile Friendly
One of the things I look for when reviewing an online casino is if the site is truly responsive. You’d be surprised at how many online gambling sites are not, or simply don’t fit within your mobile device properly. Every single website out there should be fully responsive. It’s 2018! We live in the mobile age, so for a reputable online gaming site to not be mobile responsive is pretty unprofessional. We’re happy to report that the site works very well on every single mobile device that’s been run through our list (iOS, Android, Opera, etc).
The user interface is very clean and tidy, so you won’t have to worry about annoying pop-up advertisements blocking your view. You won’t have to click off any unneeded elements that some online gambling portals like to include within their navigational interface.
FortuneJack Payout Methods
Being that FortuneJack is a crypto casino, you won’t have to worry about absurd fees like PayPal or local bank fees because you can withdrawal directly to your BitGo account, which is something fairly new to FortuneJack. If you withdrawal 1 BTC or lower, then you won’t pay a fee on the withdrawal, but you’ll pay .1% on withdrawals over 1 BTC, which is a pretty low rate when you compare it to other cryptocurrency casinocs.
Some of the payout methods included are:
FortuneJack Customer Support
If there’s an area that we can feel confident about giving a 10/10 recommendation for, it’s that FortuneJack has absolutely the best customer service and support around. The casino has 3 main methods of contacting them. You can either:
Send an email through their contact form (this is the slowest option)
Send an email to their customer service directly (these are usually answered within 24 hours)
The quickest option is to contact them through their live chat and you’ll get a response right away most of the time.
They offer 24/7 customer support, so even if you’re playing at 5 AM, someone will be available to help you.
FortuneJack Overview & Ratings
One of the best things about FortuneJack is their game selection, support, and incredible gaming odds. You can play nearly 1,500+ different games with a vast selection of live games to choose from. I’d give them a 10 out of 10 for their selection of games to play as well as the payout of those games. I found that they offer a high payout as compared to other online casinos (especially crypto gambling sites).
Their customer support is always available and ready to help at a moment’s notice. The fact that they offer a live chat support is a great benefit to offer their users as resolving issues as soon as they arise can quickly set your mind at ease. They don’t offer a telephone number for more personal support but their live chat is extremely fast, so we’d give them a solid 9/10 in this area, for most online gambling portals don’t tend to offer phone support.
As far as their payout and banking methods go, there are so many different options that no matter what currency you’re looking to cash out in via BitGo, they can accommodate, at least for all the popular ones. Payouts are quick and painless. The withdrawal fees are extremely minimal as we covered above. There substantially smaller than your typical online casino (and lower than most crypto casinos). Again, they get a solid 10/10 in this area.
The navigation and user interface is really clean, even if you’re playing on a mobile device, the entire site is completely responsive. I love everything about the overall design. You can tell that the graphic design and development departments for FortuneJack are top-notch. They get a solid 10/10 here too.
Regarding bonuses, the company offers a huge variety of specials and holiday promos. They also include a lot more bonuses for newcomers than most sites do, so we give them a solid 9 out of 10 with regard to this aspect of the business.
FortuneJack is one of the most acclaimed cryptocurrency casinos in the world and it’s easy to see why. I can recommend them without any hesitation and have never had any major complaints about them.
Detailed Video Review
There are nearly 1,500+ casino games overall.
You get a lot of deposit bonuses, they’ll offer some great matches to your deposit and will allow you to try out the casino for free without making an actual deposit.
The casino was established in 2014, so you can rest assured that the management and staff are very experienced as the casino is tightly run.
FortuneJack has a very large selection of live casino games within their massive pool of 1,500 games.
The company offers one of the most intuitive designs within the online gaming industry.
Top-tier technical and customer support for everyone, regardless of how much you’re spending.
One of the fairest dice games out there with the lowest house edge and great odds on most of their slots and video games.
You’re pretty limited on your free spins you get, so if you get 250 free spins, you have to do 50x wagers, which only lets you do 5 free spins before you need to deposit money.
Chances are, whether you’re a new or more experienced trader, you’ve a fallen victim to over-leveraged trades. Subsequently, you’ve been liquidated due to the overwhelming urge to 50X-100X your money. Like a moth to a flame, the urge is just too powerful of a force for some to resist.
There’s no worse feeling in the world than having all your Bitmex funds liquidated (AKA REKT), but I’m here to tell you that you can put a stop to that here today, by following a few simple guidelines.
But first, let’s take a more in-depth look at what a leverage trade really looks like from the inside out for all you less experienced margin traders out there.
A Little Background About Leverage Trading
When traders talk about using leverage, their simply implying the ability to multiply their initial investment (AKA – initial margin requirement) in order to produce a more size-able profit with less capital. So if you have $600 in your Bitmex account and would like to trade with $6000, you’d be using a leverage amount of 10X. This concept is fairly easy to understand for most.
If you make 2% on your trade, you’re profiting off that $6000, thus 10Xing your profit. It’s just an easy way for people to profit (or lose) within a shorter timeframe.
This is what initially drew me to margin trading on Bitmex, as well as many others just like me. The potential for quick profit is a powerful force that resides deep inside the human psyche. However, if you can’t control your risk and emotions, it’s a pipe dream that will quickly turn against you.
Now let’s dig a little deeper into a little something called “Maintenance Margin”.
What is Maintenance Margin
Futures Risk Management Systems like Bitmex require that your initial margin (your Bitcoin contracts that you hold inside your account) requires you to have a minimum amount of equity in order to keep your position active.
Unlike traditional stock market venues, where a broker liquidates you at market price once you reach your maintenance margin, Bitcoin derivative exchanges are a bit different. Exchanges like Bitmex want to make sure that you’re able to pay the profits of the person on the other side of the trade (hence why this is called a swap contract) to ensure that they are not left holding the bag in case your position quickly moves against you.
When trading futures on Bitmex, you’re actually trading what’s called a Limited Risk Futures Contract. This basically means that you can view the value of your initial margin as the trade progresses.
The company’s pay profile is a huge reason why Bitmex is the “go to”choice for traders who seek to exponentially increase their profit, with limited downside. However, the pay profile looks almost exactly like any other financial option, as you can see from the illustration below.
So then why would Bitmex allow you such an accommodating position? There has to be something in it for them right? Of course there is! They’re not in it for charity, that’s for sure.
Their “house edge” is determined by the maintenance margin requirement (MMR) which is a part of their proprietary Liquidation Engine you might have heard so much about.
This automated system is a way to close out positions that have moved against the trader and have started to eat away at their initial margin. The liquidation engine takes into account the relationship between the MMR and initial margin which will vary according to the amount of leverage that the trader is taking on.
Let’s explore this a little further…
Bankruptcy Price and Liquidation Price
Bitmex utilizes 2 determining factors for its liquidation engine. The bankruptcy and liquidation price.
The bankruptcy price is when your initial margin has been completely eliminated so that your loss for the position is at 100%. The liquidation price is when you have exhausted your MMR and the price at where your position will be closed. This is primarily used to protect Bitmex from potentially quick moves in the price action of Bitcoin.
You’re most likely already aware that your liquidation price is given to you within the order form popup that displays right before you place a trade. You can also find it located inside their handy-dandy calculator so that you can properly calculate your risk before placing your order.
So what about bankruptcy price? Where’s that at?
It’s hidden and for good reason (well at least to Bitmex that is). By hiding the bankruptcy price, you’ll never truly know how much room your trade has to move before your initial margin is completely exhausted. Bitmex is now able to keep you in the dark with regard to how much of your initial margin will be eaten up before your trade is liquidated.
Please note: the bankruptcy price is only hidden from the Bitmex calculator. Once your order has been executed, your liquidation price is given to you. This price is static (unless you add or remove from your order), so there’s no need to worry about surprise liquidations.
Let’s delve a little deeper and take up closer look at this statistical edge and how to calculate it before placing an order.
The Bitmex Statistical Edge
Once your position is close to being liquidated, you will be denied extra “price participation”(placing another order), thus giving you a chance for market recovery. In this scenario, Bitmex has the statistical edge over the long haul.
In order to give this a bit more context, let’s take a look at a few calculations below regarding the bankruptcy and liquidation prices and the result on your margin rates.
BTW, you can come up with these rates yourself utilizing this handy tool over at AntiLiquidation.com
The image shows the amount of “Theoretical MMR” you’ll have when trading on Bitmex as well as how large it is compared to your initial margin. When viewing over these 2 columns, can get an idea of how much initial margin and MMR are being applied to each trade.
Take a look at the column labeled “Maintenance Margin” and how much it increases as you take on more leverage (this should be expected). However, what’s surprising here is the amount of MMR that makes up it up. It exponentially increases the percentage of your initial margin when trading with a higher leverage.
For example, if you were to trade at 100X, you would only have to move $35 away from the current price before you you’re completely liquidated. When trading with an initial deposit of $70, you’ll quickly be liquidated when only moving at half that position to $35 MMR.
On the other hand, when taking a look at a trade with 10X leverage you’ll see that this calculation is much less pronounced. For example if you have an initial margin of $640, you won’t be liquidated until you’ve reached $610 from your initial margin. This is more than 10 times below what is required of the initial margin when using 100X leverage. That’s quite the difference.
In summary (as if it weren’t blatantly obvious), the odds have greatly turned against you when using 50X to 100X leverage. As you can see, it’s not the most efficient way to trade and isn’t the most probable one to win either.
Your take away from all this should be to never trade anything over 25X, unless of course, you enjoy the gamble, because that’s exactly what you’re doing with any leverage higher than that.
When trading anything over 10X, you always want to make sure that you’re using a well-placed stop loss, which covers the next segment of this guide.
Why You Should Use a Proper Stop Loss
No matter how you slice it, trading on Bitmex is a risky endeavor. What makes it exponentially more risky is failing to use a stop loss or exit a losing trade via a mental stop loss (for some of you more experienced traders).
As I’m sure you’re already aware by now, trading within the crypto market comes with extremely volatile swings. You can be trading between 1 to 6% swings one day, and 10 to 20% swings on another. This makes it damn near impossible to gauge a consistent range when swing trading. These massive swings are not only reserved for low market cap tokens, but are also found within the top 10 cryptocurrencies as well.
Personally speaking, I’ve fallen victim to trading without stop losses more times than I’d like to admit, however with as many losses as I’ve taken throughout the years, I simply don’t trade without them anymore (for a more detailed guide on stop losses, click here)
I don’t care how impressive your win/loss streak is, it only takes one bad trade to lose it all.
With that said, let’s go over the stop loss strategy you should be using on all your Bitmex trades.
Preventing Liquidation with the Market Stop Loss
Preventing liquidations are not only a great trading practice, but can save you from losing your ass when used wisely. Chances are you’ve already been there done that (hence why you’re reading this article) and have the T-shirt to prove it.
What most people don’t realize is, Bitmex will hit you with a liquidation penalty as opposed to getting out on a margin call (like a stop loss). Let’s go through a scenario with 100X leverage, which is obviously not advisable, but for the sake of demonstration, let’s take a look.
In order to actively fill the requirements of the trade you’ll need 1.1 BTC, which is a little more than 1%. You’ll also have to cover an exit fee on the position for the potential funding. Your liquidation price for this long trade is $1044.78 which is slightly more than $5 dollars below your entry.
Once this price has been met…. welcome to “liquidation street”, home of the bitter and REKT.
However, you don’t have to be another victim. If you simply set a stop loss right before your liquidation price and sell out of your position at $1045, your loss would only amount to -0.456 BTC.
So by utilizing your stop loss, you still have 0.65 BTC left to trade with. That’s better than being left with a big fat 0 after being liquidated right?
Leverage trade responsibly by taking maintenance margin into account so that you can manage your own risk before placing a trade. However this doesn’t necessarily equate to systematically placing the odds in your favor. More times than not, your trade will get liquidated if you decide to use a leverage higher than 50X.
Use the AntiLiquidation tool to figure out exactly where you should be on your trade and the exact amount you’re risking.
Always, always, always use a stop loss. Whether it’s a hard stop or mental stop loss, you need to make sure it’s in place and stick to it! Trends can reverse “at the drop of a dime” and you don’t want to be caught on the other side of that emerging trend waving your profits goodbye.
Utilize the market stop loss as it ensures you exit the trade when you need to most. Dips and spikes can happen quickly. If you insist on trying to save yourself that taker fee, use the limit stop loss, and at least be close to your computer in case your order doesn’t get filled.
If you find yourself feeling lucky, and have still rationalized your way into trading with high leverage, use 25X and below with a tight stop loss. This will, at the very least put the odds (somewhat) back in your favor. Trading above 25X greatly puts the odds back in favor of Bitmex.
As always, if you have any further questions, leave a comment below.
Best of luck and happy trading!
If you’d like to read more about Bitmex trading strategies, check out our other guides…
There are a few ways to earn Bitcoin without depositing one single Satoshi of your own. From using faucet sites, taking polls, or getting paid for freelance work in Bitcoin, venues that pay in BTCare readily available for those willing to earn it through hard work or sacrificing time.
Only problem is, most of these will earn you an extremely small amount of Satoshi for the time you put in and are downright boring. If you’re like me, what you really wanna find is an easy way to earn a decent amount of Bitcoin while having fun doing it, right?
For example, would you believe that there are video games that you can play on your desktop or smartphone app that allow you to earn Bitcoin (or another digital token which can be exchanged for Bitcoin) while getting lost in playing a game you’ll actually enjoy.
Playing Bitcoin Games with Zero Deposit
Every single game listed on this article is free to play. That’s right, no deposit required. I was also careful to list games that are actually fun to play and require some element of skill as opposed to straight up luck.
Bitcoin Trading Games
SparkProfit– if you consider yourself a financial genius or the next up and coming Wolf of Wall Street, but live off a steady diet of Top Ramen within the humble confines of your grandmother’s basement, this might be the right game for you.
This financial trading simulation has you making predictions on real financial marketplaces, including cryptocurrency markets as well as Forex. The more accurate your predictions are the more points you unlock because of it. You can then cash out your points to Bitcoin at any time.
Another great aspect to the platform is the fact that they provide you with the plethora tutorials and resources in order to help you become a “real” successful trader.
You can earn up to a few hundred dollars worth of Bitcoin per month if you work hard at.
Check out their introduction video here:
Altcoin Fanstasy – this is one of the newer virtual crypto trading games you can play that promises to teach you how to trade crypto within a risk-free environment. Test your trading skills on a competitive leaderboard environment without sacrificing any of your own hard earned money.
Altcoin Fantasy opens their doors to the public in January 2018. You can trade on their website or mobile app which is compatible with both Android and iOS devices. They’re currently available to US and Canadian residents and are looking to expand to Japan, South Korea, and Hong Kong very soon.
The game is very well laid out and has a professional interface that you’d expect to see from a fantasy sports website. The company includes both weekly and monthly contests where you can win real Bitcoin thanks to their partnerships.
Choose from a selection of trading contests hosted by various sponsors. View prizes from each contest and sign up to each one of them for free. You begin a contest with 10,000 virtual US dollars. Your goal is to accumulate as much cryptocurrency (thus increasing your USD value) by the end of the contest period. If you can do just that, you’ll end up winning the contest and awarded your prize money in Bitcoin.
How Much Can You Win?
This depends on the contest you enter. Some contests only award the top winner the prize while others split the prize money among the top 50 or 100 traders.
You can also win other cryptocurrencies besides Bitcoin like Stellar Lumens, Ethereum, and many others. You’ll also find that other virtual trading contests award prizes in USD, which is a great alternative for most.
Altcoin Fantasy gives away hundreds of dollars in prizes every single week, free of charge. This is one of the best virtual cryptocurrency trading sites to date.
Check out this Altcoin Fantasy Video Walkthrough:
Earn Bitcoin Playing Flash Games
Tremor Games – this online flash gaming site offers a wide range of games, much like any other typical flash arcade. However, unlike your typical run-of-the-mill flash gaming site, you can earn “Tremor Coins” while playing and gaining achievements. Once you’ve built up enough tremor points, you can then exchange them for a wide range of prizes, which include Bitcoin withdrawals.
Bitfun.co – this is a bit of a spin on your typical Bitcoin faucet site. However, this flash gaming site allows you to play a variety of flash games while paying you every three minutes for your time from a Bitcoin faucet.
Bitcoin Brain Games
Satoshi Quiz – this game is a surprisingly fun game with a variety of very interesting questions along with a a prize pot of 1000 Satoshis for every question answered. There’s a good mix between easy and hard questions, and they even allow you 1 minute for each question so if you’re quick behind the keyboard, you may be able to Google the answer before the time limit runs out. There are also standard challenges where prizes of up to 1 million Satoshis are awarded.
Quiz BTC – a “competition style” quiz site allows you to earn free Bitcoin by being the first one to answer a question correctly. The person to answer the question the fastest earns more Bitcoin satoshis. Questions are posted every minute and satoshis are awarded regardless if you answer the question faster than your competitor.
Bitcoin Apps & Smartphone Games
Takara (iOS only) – this PokémonGo style geo-location game allows you to collect coins from specific locations in your area. The game will also be available to Android users soon.
Oh Crop – this highly addictive android game allows players to dodge in we’ve through multiple projectiles in order to avoid evil plants that are trying to kill you. You collect game tokens and power ups which help you survive and kill the enemy plants. The primary goal of the game is to survive as long as possible with the highest amount of points.
This simple and intuitive game relies on the in-games accelorometer (virtual joystick) for movement of your in-game character. This is not only a great smartphone game, but the fact that you can earn Bitcoins as a reward while playing makes it even that much more addictive.
In order to claim your Bitcoins, you need to make it to the top 15 strongest players on the leaderboard. Don’t worry if you don’t make it at first, as the game has cycles that last several days, where the leaderboard is reset after each cycle.
c- this smartphone game allows you to become a Bitcoin mining tycoon by allowing you to purchase virtual mining rigs in order to mine Bitcoins for profit. The game starts you out with a few simple machines so that you can earn enough Bitcoin to purchase your own in-game mining farm. From there you can continuously improve your farm in order to generate a nice ROI.
Storm Play – this fun and easy way to earn free Bitcoin allows users to earn STORM, Bitcoin, and Ethereum tokens by trying out new games products and services. Deposit your new earnings to your Coinbase, Exodus, or any other personal wallet you own.
Earn Bitcoin Playing RPG
BitQuest – if you’re a MineCraft fan you’re going to absolutely go crazy over this game. If not, I guarantee you’ll still get addicted. This popular “sandbox game” allows players to build game worlds in which you define a story and have full control over all aspects of your creation.
The MineCraft style game includes Bitcoin as its main in-game currency which you earn by mining, trading, and interacting with other players.
Spells of Genesis – the longest running Bitcoin RPG to date, Spells of Genesis is everything you ever wanted in a Bitcoin RPG game and more. You can play this amazing RPG on both desktop and mobile devices. This RPG mixes the trading card game genre, with a strategy based game, as well as implementing arcade style gaming elements.
You’ll need to collect, trade, and combine orbs in order to build the strongest gameplay deck you can in order to test them against other opponents while exploring the vast world of Askian.
Unlike other free Bitcoin RPG games, players are able to actually own their in-game items and cards outside of the game itself on blockchain. Now keep in mind that you can exactly earn Bitcoin directly within the game, however you do build up a collection of rare cards, which when fully upgraded, can be stored on the Bitcoin blockchain utilizing Counterparty protocol.
This in turn allows you to trade with other players on the decentralized exchange. If you’re lucky enough to snag a rare or powerful card, you’ll have no problem finding another player willing to purchase it on the exchange.
Check out their Twitter page here. Their community is constantly expanding as fast as the in-game development itself.
CoinBrawl – this unique RPG Bitcoin game allows you to fight other players, level up your hero while earning Satoshis through their in-game faucet. The site claims that you can upgrade your character and earn more than 100,000 Satoshis per day.
Click here the check out their top 100 Coinbrawl players and the amount of Satoshis that have been earned from each.
Let me know if you have any others to add to the list…
As always, if you have any other games that you’ve stumbled across that could be added to the list, please leave your comment below. I’d be more than happy to add them.
Looking for something a bit more? Check out our review for Gods Unchained – the first competitive e-sports RPG/Hearthstone style game on the Ethereum network back by Coinbase.
If you’re like me and hate giving up your credit card information to some of these potentially shady online casinos or live in the United States where dealing with online casino transactions can oftentimes be a difficult and painful process. That’s where Bitcoin casinos come into play.
Not only can you gamble with complete anonymity, but you can rest assured that your private information is not released to more nefarious sources, where your information (email, address, phone number) is released but your bank account and credit card information can be sold. Cryptocurrency is perfect for this sort of thing.
Now the only problem is, with so many Bitcoin gambling sites out there today, it’s easy to get lost in all the hype of some of the more “unscrupulous” portals. This is why I’ve composed an updated list of the very best and most noteworthy Bitcoin casinos on the net.
Whether you’re a total novice or experienced gambler, playing on the sites I listed for you below are not only beginner friendly but highly addictive.
To all my US residents…
You’ll realize how relatively aggravating it can be to send over bank wire transfers, while submitting several forms of ID (sometimes including billing statements), taking selfie’s like you’re a self proclaimed convict, to only have your online verification turned down.
Due to the overwhelming demand for bitcoin gambling sites, you can use your money and start enjoying a round of blackjack within a matter of minutes. For those of you more experienced gamblers who have gone through the same arduous process, you’ll really appreciate speed at which you can get started playing your favorite online casino games.
There’s Comfort in Blockchain
With the inclusion of blockchain technology and digital ledgers, online casinos can’t rob us blind like some of the more nefarious ones in the past as everything is recorded on blockchain. This enables players like yourself to check and see if the games are provably fair.
This is truly an amazing time for players who would like to get started playing their favorite casino games, quickly and easily, without all the troubles you have to go through from fiat based casinos.
Sifting Through the Clutter
If you’ve done any research as of late, you’ll realize there are quite a few “suspicious” Bitcoin gambling sites out there. However, there are only a few that are worth mentioning. Many of these casinos are plagued with programming errors, unfair game tactics, lack of customer support, and just look downright cheap.
I’ve created this review in order to clear out all the clutter and differentiate the portals that will stay honest and fair, so you don’t have to filter through all the nonsense I had to before finding a few that were worth their weight in gold.
Here is some of the criteria that I used to review each site…
Payment terms including minimum payouts, accepted payment methods, fees, withdrawals, and deposits.
Top-notch customer support. This includes fast ticket response times, open social media channels, as well as online chat support.
Ease-of-use. Games load quickly without any glitches or errors.
Quality content, selection, and graphics.
Anonymous registrations allowing the ability to play without registering your name, address, etc.
Deposit and Withdrawal Bonuses/Giveaways
Now that I’ve covered the basic requirements I use to review, let’s take a look at the top 5 Bitcoin gambling sites according to my personal analysis and user reviews.
FortuneJack was established in 2014 and is the most trusted Bitcoin casino out there. Not only are they provably fair , but they are also regulated by the Curacao government.
The online crypto casino is developed and maintained by Eastern Europe’s top software professionals. They offer the very best when it comes to a high-end, secure online gaming experience.
The developers at FortuneJack created this casino for both newcomers and veterans alike by designing a unique and carefree environment that would ensure consistent entertainment no matter what your gambling preferences might be.
It’s currently one of the most visited Bitcoin casinos to date.
The casino welcomes US gamers with over 720+ various games to play. One things for sure, you’ll never lack from the selection of games or suffer from boredom. If there’s anything bad that I can say about this casino is that they may have too many choices, which can be a bit overwhelming to novice players (34 blackjack variations, 19 live games, 900 slots, etc, etc).
With FortuneJack you can bring the online gaming experience to your smartphone as this casino is compatible with any iPhone, Android, and Windows based smartphone.
Deposits can be made through various cryptocurrency’s like Bitcoin, Ethereum, Bitcoin Cash, Monero, Zcash, Litecoin, Dash, and Dogecoin. Their list of acceptable cryptocurrencies is beyond what any other online Bitcoin casino offers at this time.
Your crypto deposits show up within minutes after a single confirmation. Payouts are processed in a few hours, but I’ve seen these show up as quickly as 30 minutes.
Your initial deposit gets a 100% match bonus up to 0.5 BTC and monthly reloads of 1 BTC.
The company includes a comprehensive online ticketing platform along with online chat. The also stay very active on their social media channels in case you like to get in touch with them there. You’ll even be provided with your own customer support rep as soon as you register.
One of the most updated, comprehensive, aesthetically pleasing Bitcoin gaining sites out there, FortuneJack offers a plethora of gaming options regardless of what your particular poison is.
The site navigation is extremely easy to use, with games that are categorized very well making it as straightforward as they come.
The casino has one of the most comprehensive game selections out of any online casino on the net today, let alone Bitcoin casinos. With your choice of live games, video games, betting games, casino games, lottery games, and many other subcategories of gaming experiences, you’ll undoubtedly never suffer from a variety of choices.
This was one of my personal favorite Bitcoin gambling sites as they simply offered everything that I could possibly look for within an online casino and make it very easy for you to get started. Their support was also top-notch and eager to please, making you feel right at home from the very get-go.
Another more established Bitcoin gambling site, BetChain was established in 2014, and was one of the pioneers to the online Bitcoin casino industry, when this phenomenon was relatively new. They recently decided to open their doors to other fiat currencies however the site is still widely regarded as one of the “early adopters” of the Bitcoin casino industry.
The company is also fully licensed by the laws and regulations of the Curacao government. Their security and anti-hack protocol is some of the best in the industry.
BetChain offers their newer players a nice welcome bonus. They now offer 100% welcome bonus up to 1 Bitcoin + 200 free spins. A minimum deposit of 0.05 BTC is required in order to qualify for this offer.
BetChain gives its players the chance to play using Bitcoin, Ethereum, Litecoin, and Dogecoin currencies. For those outside of the US, you can use both euros and the Russian ruble.
There is no minimum or maximum limits to deposit or withdrawal your funds. They even allow the ability to withdraw to other fiat currencies like the Euro and Russian ruble.
Withdrawals are typically subject to a 24 hour waiting period before processed. This is due to the fact that the casino employees employ a secure socket layer encryption system to ensure that all funds are protected from online threats.
The customer support over at BetChain has been fairly good. I never had to wait more than 24 hours for a response, however there has been a few negative reviews regarding lackluster support as well as wait times for verification.
Regardless if this is true or not, the casino has responded to these negative reviews with an explanation or an apology. This says a lot for their online reputation.
This well established and highly reliable Bitcoin gaming site should be placed high on your list if you love Bitcoin gambling sites as much as I do. They have an extremely large selection of slot machines (probably one of the largest selections out there) and are worthy enough to be considered one of the top online casinos offering both crypto and fiat funding options.
One of the most popular Bitcoin casinos as of this release, BitStarz, offers 1200+ high quality games. Much like the other 2 Bitcoin gambling sites mentioned above, they were established in 2014, have provably fair games, and are regulated by the Curacao government.
This online casino is powered by the SoftSwiss gaming technology which provides an enhanced gambling experience. These games range from traditional casino games to highly addictive video games. The casino also offers live dealers, where you play in real time and compete against other live players. BitStarz is also one of the most appealing Bitcoin casinos out there in terms of design.
There are many different ways to fund your BitStarz account. This online casino is to offer multiple currencies including Euro, USD, AUD, and British pound. Take note that there are processing fees involved with depositing funds into your account. Most of the payment outlets charge a 2.5% processing fee which allows your deposit to be processed immediately.
However, you’ll be happy to know that Bitcoin, bank transfers, and SoFort wire transfers do not deduct any transaction fee from your balance. This is yet another reason to utilize Bitcoin for your online crypto gaming needs.
Once you’re ready to withdraw your funds, you can choose whichever payment processor you’d like to have your funds sent to. This is what makes BitStarz stand out among other online crypto casinos as it has the ability to process your transactions through various payment methods (much like BetChain).
Also worth noting, unlike the deposit fees, BitStarz doesn’t charge you anything for the withdrawals. You simply need to have at least 5 mBTC in order for a BitStarz to process your payout.
This Bitcoin casino offers their players a 100% match bonus of up to €100 or 1 BTC. That means if you deposit €100, you’ll receive €200 to gamble with. However that’s not all! BitStarz will award your second deposit with a 50% bonus which will be instantly credited to your account.
We’re not done there folks…
They also have a 3rd and 4th deposit bonus as well. As you can see it pays to be a low loyal customer of BitStarz as the more you play, the more bonuses you’ll receive. You can read more about their promotions and bonus specials located here.
BitStarz offers several support channels including live chat support, social media and email support. The company also has a sub Reddit where they quickly respond to user complaints which shows that they care about their customers and are willing to publicly help when called upon.
Overall the online gambling experience over BitStarz is beyond most other online Bitcoin casinos with regard to gaming features and the vast array of payment methods they offer. This company has been around for a very long time so you can rest assured that your gaming experience is not only secure but provably fair.
Deposits and withdrawals were always credited fast along with bonus opportunities that were beyond any that I’ve seen from some of the other Bitcoin gambling sites.
I highly recommend this casino to both novice and advanced gamers as they have a ton to offer both. The graphics and gameplay are beyond any that I’ve seen so far. You can check out some of their Bitcoin games located here.
#4 CLOUDBET SPORTSBOOK
CloudBet isn’t necessarily known for their online casino, however seeing that the 3 casinos mentioned above do not contain a sportsbook, I thought I’d include this in the mix as it’s one of the most noteworthy Bitcoin sports betting sites around.
You can clearly see that the company put a lot of time and money into the product as they not only contain sportsbook betting, but also a full Bitcoin casino and wide selection of live games.
CloudBet was established in 2015 and is one of the most impressive Bitcoin sportsbook gambling sites around. Both online players and industry experts alike agree… CloudBet is one of the best regulated fiat as well as crypto based sports betting sites around. You just can’t compete with the packages that CloudBet offers (covered below).
The company offers one of the most advanced Bitcoin sports betting sites on the planet. Everything about it is authentic, which many other sports betting sites seem to lack. The graphics, gameplay, and interface are just as polished as some of the world’s most elite online sports betting casinos, like William Hill and Pinnacle.
Sports betting includes all major leagues like EPL, Champions League, NFL, NHL, NBA, Cricket, Tennis, and even UFC.
CloudBet sportsbook is one of the very few to offer both Bitcoin and Bitcoin Cash deposits and withdrawals. All deposits are received directly into cold storage where your keys are kept safely off-line and away from potential hackers.
The company maintains a hot wallet which contains enough funds so that players can quickly withdrawal their amounts each day. Withdrawals are instant and typically processed within the same day.
Welcome & Deposit Bonuses
CloudBet offers some of the largest deposit bonuses available for any Bitcoin sports book on the internet today. First time deposits receive a 100% match bonus up to 5 BTC.
This is easily the largest match bonus limit across all online sports betting sites as it can easily award you with thousands of EUR, USD, GBP, or BTC. To top it off, players have a total of 365 days to clear the bonus once it has been applied to their account.
You’ll also be awarded bonuses by earning loyalty points, which CloudBet rewards for using both the sports betting and casino games. An award of 0.01 BTC will be released for every 800 loyalty points earned. As you can see the potential for large bonus amounts are extremely rewarding. This is yet another reason why CloudBet is a cut above the rest of the competition.
Even though CloudBet doesn’t offer a particular smart phone app, I found it extremely easy to view on both iPhone and Android devices. The pages are very mobile responsive and fits well within the layout of the screen.
The interface was very well developed to provide players with the best possible experience. All their games can be tested for free on your smartphone before making any deposits.
CloudBet offers the best Bitcoin sports betting platform out there. It’s very hard to find another Bitcoin sportsbook that even comes close to CloudBet offers with their various sports betting options and large deposit bonuses.
Support and live chat are very responsive and get back to you within a timely manner. The company clearly understands the importance of what sportsbook gamblers truly want… convenience and hassle free access to their most coveted sporting events.
Instant withdrawals so that your winnings go straight to your account with the push of a button.
Every sport imaginable is covered.
The most impressive deposit and wagering bonuses around with a 100% match bonus of up to 5 BTC.
Have Something to Add?
Post a comment below and let us know if you found any hidden gems or newer sites worth mentioning.
Also, let us know about some of your experiences with the sites mentioned above. If you had a negative experience, I highly recommend you take that up with support (or a corresponding subreddit) as most of these grievances can be taking care of internally.
Good luck and happy gaming!
Warning: margin trading is not suitable for beginners. If you’re new to margin trading on Bitmex, make sure to initially read over our guide “The Idiots Guide to Margin Trading on Bitmex” first. The guide covered here is for more advanced Bitmex trading topics.
Bitmex has long been the “go to” platform for margin trading Bitcoin and other various altcoins. If you don’t already have an account, well you probably shouldn’t be reading this guide now should you? 😉 However, if you’re looking to run before you walk, you can proceed to read over this guide (like anyone’s going to stop you), but I recommend you at least sign up for an account before you do.
You can click here and get a 10% discount on your transaction fees for the first 6 months. There’s no cost to you and it really does benefit the both of us.
So let’s start off with a few advanced features that you may not be too familiar with on the Bitmex exchange.
Stop Limit, Stop Market, and Trailing Stop Loss
If you have any trading experience whatsoever, you should already know what a stop loss is so I’ll skip the formal introduction. If you’re not too familiar with stop losses, I highly recommend you check out this guide “Stop Losses VS Mental Stop Losses”.
Let’s take a look at the 3 stop losses that Bitmex provides for you and when you should use each one.
Stop Limit– when setting a stop limit on long trades, you always want to make sure that your “Stop Price” is lower than your “Limit Price”. Do the exact opposite for your short trades. This ensures that you exit your trade at the proper price point. By how much is up to you, but I do recommend a decent range between your stop price and your limit price. The closer these two numbers are to each other the less likely your order will get filled.
I personally recommend using a stop limit when you’re close to your computer. This way you can at least keep an eye on things, pay lower fees, and exit out of your trade in case your stop limit gets skipped over. If you’re not by your computer and still insist on using this feature, make sure to use a broad range between the limit and stop prices.
One of the key benefits to utilizing a stop loss limit is the fact that you’ll be paying minimal fees on your trades. Sometimes you can even receive a rebate on your funding fees depending on if you’re going long or short during an opposing bullish or bearish market. I’ll cover more about this below under “Fee Calculations and Funding Rates”
Stop Market– I don’t think it takes a genius to figure this one out. Stop market stop losses are the exact opposite of stop limits. Unlike the stop limit mentioned above, using this feature will ensure that you exit a trade and don’t suffer any more losses then you need to. This is a true “fail safe” stop loss as it will never get skipped or unfilled.
The main take away to utilizing the stop loss is the fact that it guarantees you an exit out of a trade. The downside to using the stop market is that you’ll pay more in fees. You may also exit a trade at a higher or lower price than the actual “stop price” you originally set if the market is moving at an extremely fast pace during this time.
This can be a great solution for those who have a lot of money on the line and need a guaranteed way out of a bad trade. I’m not one to tell you which one to use, as that’s more of a personal preference (it can be situational one as well).
Trailing Stop Loss– a trailing stop loss is an advanced trader’s best friend as it dynamically moves according to the current price movement.
A trailing stop loss will follow the current price action by a designated set price. This is best explained with a few examples.
You’re currently trading BTC at an entry of $7500 and set a “Trail Value” of $100. The market moves up to $7700 and then dips to $7600. You’d be stopped out at this point. You would have also made $100 profit as opposed to losing your funds if the dip kept moving past your entry point.
As you can see, this is a highly effective feature that Bitmex gives you which no other cryptocurrency exchange offers. This will allow you to keep your losses to a minimum. It’s also great for those more riskier traders who like to use higher leverage (above 20X).
The key takeaway to this type of stop loss is that it allows the Bitmex system to constantly babysit your trade by following the price point around like an angry cobra. The moment the price dips, the trailing stop loss quickly snaps it up and exits you out of the trade.
The downside to this is that you may be stopped out before a major rally in price. However this goes for any stop loss you may choose to use. The feature will also stop you out at the market price, so you’ll be paying a bit more on fees.
Now that we’ve covered all the stop loss features, let’s discuss the “Place Order” features you may not be familiar with.
A pretty simple and useful feature, the “Reduce Only” tickbox will allow you to close out your trade without opening up a new position on the opposite side of the market (I call this inverse trading). This is best explained with an example. <image>
Let’s say you start a long position for $1000 at entry price $7500 and set a sell limit to exit out of your trade at $7600 for $1000 (using the sell/short button). However, in your haste, you accidentally input an additional zero, thus opening a short for $9000 ($10,000 sell/short quantity – your long trade of $1000). This type of mistake could have dire consequences on your trading account funds.
When checking the “reduce only” feature, the Bitmex system will not allow you to execute the trade and will immediately cancel out the additional $9000 that would have put you in a short trade. The feature will still execute the trade but only utilize $1000 worth to exit you out of it.
This is an extremely useful feature that can get you out of trouble and should be checked unless you actually plan on opening an immediate “inverse trade” upon your exit (long to short or short to long). I cover more on this within the advanced Bitmex trading strategies below.
This feature should be used at all times. When checking this box, only limit orders will be allowed to execute your trades, thus saving you a ton on fees. Look at this feature as a safety precaution from accidentally creating a market order (being a taker, and not a maker).
Using Cross Margin
Leaving the leverage margin bar to the far left will allow you to utilize the Cross margin feature. Unlike isolated margin, where you have to manually input the amount of leverage you would like to use for your trade, cross margin uses your entire Bitmex balance as collateral.
This also saves you the time of inputting a leverage amount and calculating a quantity that corresponds to this leverage. These are two key aspects to isolated margin trading that you’ll have to take into consideration. Simply adjusting the leverage slider will not change the amount of contracts that you’re actually trading. It will only raise or lower the limit that you’re allowed to trade with. This is better explained with an example.
Let’s say you have $500 in your Bitmex account, and you want to trade with $5000 worth of BTC contracts. With isolated margin, you would have to move the leverage slider to 10X and then input the quantity to $5000 (this figure would be a little lower due to trading fees).
With cross margin, all you would need to do is input the $5000 into the quantity box and Bitmex will calculate it as 10X leverage off of your $500 account balance.
Most of the time, you want to use cross margin for your trades. Make sure that you never go over 10X leverage (20X is pushing it). For beginners, I highly recommend you keeping it to 2-5X.
However, there are occasions where you want to use isolated margin. Let’s say you like to put in a few day trades but only want to risk $100 of your account balance at 10X leverage for a total of $1000. Seeing that you have $500 in your Bitmex account, you would merely move the slider to 2X. This way if you get liquidated, you only lose $100 off your total account balance.
Personally speaking, I don’t trust myself to only use a set amount within my account balance, so I only fund my Bitmex accounts with an amount I’m willing to lose when using cross margin trading. This is because cross margin won’t get you liquidated as easily as isolated margin, as long as you’re not too crazy with that leverage. This is also the leverage type that most professional traders use for that exact reason.
Tip: I recommend opening 2-3 Bitmex accounts, since all of them are anonymous (no KYC needed) and fairly easy to start up. Fund each account with $500 to $1000. This way, if you’re having a bad day and there’s a massive swing against you (like 8-15% in the opposite direction of your trade), your entire t uprading capital doesn’t get annihilated.
Unrealized and Realized PNL
Unrealized PNL is related to the Mark Price. The Mark Price is what determines your risk management of your position on Bitmex. This means that when you get liquidated due to the price going against you, it’s due to the fact that Mark Price has crossed the liquidation price threshold. This will prevent you from getting liquidated from a sudden price swing on Bitmex’s local platform as the Mark Price is comprised of several other exchange values.
Bitmex has a reasonably complex way of calculating the Mark Price which can be found here. It uses a combination of Bitcoin to USD Spot Index (which is 50% Bitstamp and 50% GDAX) as well as the depth of the order book.
Realized PNL is simply what your current profit and loss is according to Bitmex. You’ll receive this figure by hovering your mouse over the Mark Price. This is the real price that showcases your real profit and loss.
Fee Calculations and Funding Rates
Bitmex calculates these much differently than any other cryptocurrency exchange. When looking at the Contract Details box, if the fee is displayed in red, long positions will have to pay the fee. This means that there are more long positions than short at that moment.
On the other side, if the fee is displayed in green then Long positions receive the fee. When you hover your mouse over the “funding rate” you’ll see a predicted rate for the next eight hour period.
This rate is in regards to the funding rate and does not take into account the maker or taker fees for placing the trade. If you exit your trade within this eight hour period, you will not have to pay the funding fee.
Tip: keep an eye out when this fee is about to go into effect. Many traders will exit the market (thus shorting) around 30 minutes or so before the fee hits their account. This would be a great opportunity to buy in and take advantage of a long trade as soon as the fee period ends. When time properly, this can be easy money.
Bitmex Advanced Trading Strategies
1. Scaling In and Out of Your Position – no matter if you’re going long or short with your trade, scaling in and out of position is highly recommended and utilized by most advanced traders.
In order to get the very best possible position for your entry and exit positions, you need to layer them (aka scaling in and out). Let’s say you’re trading with $1000 and want to take a long position at $7500 on Bitcoin. The current position is at $7800.
Instead of watching the chart all day and trying to time that five minute window in order to get the closest price to that $7500, you would simply set 3-4 entries on the way down.
This would look something like: $250 at $7700, $250 at $7600, $250 at $7500 and $250 at $7400 in case you catch a long wick down. Now, all the entry points may not get filled as the price may only reach $7600, however you’ll be at an advantageous entry point with capital in the trade.
The opposite goes for your exit positions. Let’s say your ideal exit position is at $8000. You currently have $1000 in the trade at an entry position of $7500. You can scale out of your position by setting exit points at $7700 exiting with $500, $7850 with $300 and then $800 with $200. Again, this will allow you to both enter and exit the market at the most advantageous price points as well as accumulating the most profit along the way.
Note:this is not only a margin trading strategy, but a typical advanced trading strategy that you can use for any cryptocurrency exchange.
2. Use stop losses when trading top and bottom ranges – this essentially means that if your trading at a top or bottom of a particular price range, you want to ensure that you have a stop loss in place in case your strategy is not fulfilled.
To put this into perspective…
Let’s say you spot an inverse head and shoulders, however it’s located near the top of a 3 day price range. You want to set a stop loss at a key level to where you don’t get stopped out before a major rally, however still within range to exit you out of the trade if the market turns against you.
Using the stop loss will allow you to take advantage of the charting patterns while still giving you a safety net in case the strategy doesn’t end up going the way you had planned.
The same goes for entering a trade with a short when you’re at the bottom of a 3 to 7 day average. Make sure you place a stop loss above your short, but at a price level that you know won’t get prematurely stopped out before a major dip ensues.
This is best illustrated with a chart…
3. When to Use Market & Limit Orders– for an overwhelming majority of your trades, you’re going to want to use limit orders with the “post only” feature checked. However, there are occasions where you’re going to want to use market orders.
For example, utilizing “stock market” stop losses are highly recommended when using one of the strategies above, but especially when you’re not close to your computer or watching the market.
For everything else, stick to limit orders and keep those fees to a minimum.
4. Using Inverse Trades– the beauty behind margin trading on Bitmex is that you can immediately cash out of a long with an immediate inverse short trade.
For example: let’s say the current 3 day price range for Bitcoin is between $6200 and $6800. You’re currently exiting a long trade with $1000 at $6800 from an entry of $6600. Instead of exiting the trade with a short of $1000, you can input $2000 into the quantity box and immediately start a short trade upon exiting your long.
I only recommend doing this when you’re at the bottom or top of a 3 to 5 day price range. The chances of your trade reaching a peak and reversing is much more likely than creating a new ATH (all-time high). This is best outlined with an illustration below.
5. Playing Both Long and Short Trades Simultaneously– A strategy that some of the more advanced traders use on certain occasions is to set both a short and long limit. This can be used in times where you’re unsure which direction the market is about to break out to. It’s also good to use for trading patterns like a symmetrical triangle.
In these cases, you’ll need to have 2 Bitmex accounts available. On one account, you’ll set up a long entry point above the potential breakout. On the other account, you’ll set up a short entry point below the potential breakout. This way you’re setting yourself up to take advantage of the breakout in either direction.
Another similar scenario you could use this strategy is…
If the price movement reaches a high from a 3 day moving period (like the $6800 price point covered in the example above). You can place an inverse trade to short at this peak as well as set a limit order to go long on the trade in case of a major breakout. Again, you’re covered on both sides of the spectrum.
Great Job! We’re Done Here…
I hope you enjoyed my advanced Bitmex trading guide. Using just a few of the strategies I covered above will allow you to create an incredible income for yourself in a much shorter time frame than it would typically take trading on any other cryptocurrency exchange. This is due to the fact that you’ll not only be able to multiply your trading capital with leverage, but also have access to both long and short trades as well.
Remember, initially trade with small amounts until you get acclimated to the platform. Print this guide out and keep it close by for when you need it.
Warning: margin trading is not suited for beginners. You should have at least several months of trading experience before attempting to margin trade. Note that using the information below is done at your own risk. This is not financial advice blah blah blah….
Ok, now that we got that out of the way…
Let’s get you started making some of that Bitmex “short trade with 100X leverage” money you’ve heard so many people talking about (btw, never do that…and if you do, you’re an idiot).
Whether you love em or hate em, Bitmex has the potential to take you from zero to hero faster than any other trading method out there. This is potentially the biggest draw to the Bitmex trading platform.
If you have a solid understanding of technical analysis, a trading strategy with a proven track record, and lots of trading experience under your belt, Bitmex may be your “go to” cryptocurrency exchange for some of that quick crypto cashflow.
However, if you’ve only traded for a few weeks and don’t have a solid understanding and proven game-winning trading strategy, Bitmex will wreck you faster than Mike Tyson on acid.
This is for heavyweights only. If you haven’t been through a few battles yet, don’t step inside the ring.
How to Get Started Trading on Bitmex
I highly recommend you open up your Bitmex trading account by using the link here in order to register. You receive a 10% discount on all your transaction fees for the first six months at no additional cost to you. Now do it!
For US Residents…
If you’re a US resident, you need to make sure that you’re either using a UK VPN or private proxy when signing up. I recommend you use BuyProxies.org and purchase their lowest tier package which is $10 per month.
Once you’ve completed your registration, you no longer need the proxies (or VPN if you decide to go that route). You can sign in with your standard US IP (no proxy or VPN) from there on out.
Ok, now that we got that out of the way, let’s get you started with the fundamentals…
Bitmex Margin Trading In Plain English
I’ll start off by defining a few terms that you’ll need to be familiar with in your early stages ….
Margin trading – this is the method of conducting a purchase using cash that is provided to you (the trader) as a loan. In reality, you’re not really “borrowing funds” from any centralized entity, you’re merely swapping out “contracts” with others utilizing the platform.
If you’re shorting, you’re swapping out with someone going long. If you’re going long, you’re swapping out with someone that is shorting.
That’s the gist behind it all. For the sake of this guide, I’ll loosely use the term borrowing.
Leverage – the amount of funds that you decide to borrow. The higher the leverage, the more funds you borrow, and the more risk you take at getting liquidated.
Example: $1000 with 5X leverage = $5000 your trading with. Your liquidation price is given to you before and during your transaction, so you should never be surprised at where it’s at.
<image: the power of leverage.png>
Liquidation price – this is the price at which your account balance (or amounts of funds you’re using) is completely wiped out.
Example: $100 with 25% leverage at BTC entry price of $7500 = $6002 liquidation price.
Don’t worry about calculating all this stuff by yourself. Bitmex was nice enough to provide you with a calculator. You’ll never be left in the dark when it comes to your profit, loss, or liquidation price.
Long position – betting that price movement will increase.
Short position – betting that price movement will decrease.
Limit order – (aka market maker) set a price and have it filled once the market reaches your set price. 9 times out of 10, you should be using this for all your trades to prevent paying high fees.
Market order – (making you the market taker) this is where you’ll immediately exit your trade. For having this convenience, you pay 3X the fee (%0.0075 as opposed to %0.0025).
Take Profit – like the name implies, this is where you start taking profits as the price value increases. The opposite applies for shorts. You want to start taking profit below your entry price.
Stop Loss Limit – this is to prevent you from completely losing all your capital from a sudden drop (for longs) or sudden spike (for shorts) in price action. Once a stop loss trigger has been reached your trade initiates your stop loss limit price. Once this limit price has been reached, you’re exited out of the trade. This will ensure that your loss is minimized.
Stop Loss Market – the same as stop loss limit, however your trade will be “immediately exited” at the market price. I highly recommend using this over the stop limit when you’re not close to your computer (or on any occasion for that matter).
When price drops, it drops fast. There’s a good chance that your stop limit price will not activate and you’ll be left holding the bags (debt). Using the stop loss market, ensures you that during a strong dip, you keep your losses to a minimum. You’re guaranteed an exit out of the trade, which again, is not always likely with stop loss limits.
Trailing Stop – think of this as a “moving stop loss” that follows the current price by a set value.
Example: $1000 at BTC entry price of $6500 with a trailing stop loss of $250 would mean that if the price action decreases to $6250, you would be stopped out (exit the trade).
However, if your price increases to $7000 and then drops $250, it would be stopped out at $6750. This is a great feature to use when you’re trade is already in profit. Trailing stops will ensure that you take advantage of quick spikes in price if you’re not by your computer.
Bitmex not only allows you to trade with borrowed money, but enables you to make a profit on both an uptrend or downtrend. No longer will you be confined to bull markets once your familiar with this trading platform. Hell, you might actually look forward to bear markets. You can make just as much during these periods of margin trading than you can within bull markets, if you play your cards right.
Now let’s look at the various ways to leverage your trades on Bitmex…
Leverage Trading on Bitmex
The cryptocurrency exchange allows you to create anonymous accounts without giving your real name or information. In order to start trading on Bitmex, all you really need to do it is deposit Bitcoin into your account. No other currency is accepted as a deposit, so don’t send you’re Ethereum, Litecoin, Ripple, or any other altcoin for that matter. Deposits are fairly quick, but this is highly dependent upon how busy Bitcoin miners are. I typically receive my deposited funds within 15 to 30 minutes.
Be aware that Bitmex doesn’t actually trade in Bitcoin, it trades in contracts. Contracts are an agreement to buy or sell an asset (in this instance cryptocurrency) without actually owning the actual currency. Once you withdrawal your funds, your contract for those funds are awarded to you and therefore “real Bitcoin” is sent to your destination address.
Bitmex offers two types of contracts…
Created specifically by the Bitmex team, this type of contract is also known as a “perpetual swap”. This is the type of contract you’ll be primarily trading when you’re first starting out, especially when you’re day or swing trading on a shorter timeframe (like 4 hour and below).
These contracts don’t have a specific date at which they will expire, so they are great for short term trading. They have a variable interest rate where cash flow is added or subtracted from your current equity. For more detailed information, click here.
As the name suggests, these contracts are continuously renewed. Perpetual contracts are also known supposed to be less volatile; however you wouldn’t think that’s the case when looking over their charts.
For having the ability to use these contracts, you’ll pay a fee every 8 hours of 0.0015% for longs and you’ll actually get a rebate of 0.0015% for shorts. Ethereum fees are much higher at 0.1562% for longs, but you receive a much larger rebate at 0.1562% every 8 hours.
For more detailed explanation of fees, click here.
This is basically an agreement between a buyer and seller to exchange a currency at a defined date in the future for an agreed upon price. Futures contracts tend to have a fixed interest rate which makes them great for longer term trading, like swing trading (using the 4 hour charts) or shorter term investing.
The great thing about these contracts is that they have a fixed interest rate which doesn’t fluctuate over time.
Now that you have a basic concept of margin trading terms, let’s move on to the next step and cover short trades.
How to Short Cryptocurrency on Bitmex
Bitmex offers quite a few cryptocurrencies to short as of the release of this guide. The altcoins they include within their platform change constantly. At the present moment you can short these altcoins with the corresponding leverage.
Ethereum (ETH) up to 50X leverage
Litecoin (LTC) up to 33.3X leverage
Ripple (XRP) up to 20X leverage
Cardano (ADA) up to 20X leverage
Bitcoin Cash (BCH) up to 20X leverage
EOS (EOS) up to 20X leverage
Tron (TRX) up to 20X leverage
Bitcoin (BTC) is the only crypto that you can leverage up to 100X leverage, which I would not recommend. When you’re leveraging past 50X, you’re essentially gambling. With that being said, if you have spare change laying around and are feeling lucky, go ahead and roll the dice. Just know, the odds aren’t in your favor. With $100 at 100X leverage, you can make $1000 in less than a few minutes (or lose it). You obviously don’t want to do this with rent money!
Back to short trading…
Shorting works in the same way as a long position except you’re placing trades on the decrease in value of a particular currency. This would’ve been the ideal way of taking advantage of the extended bear market this year (2018 and still continuing).
As an example, if you kept $2000 in a longer term short with Bitcoin on January 6th where the price of BTC was ~$17,000, till today,, without touching it, you would have $3280 (64% gain + a rebate on your fees) during this period. Remember, that doesn’t account for all the times you might have cashed out of the short due to intermittent bullish trends, which would have potentially left you with 2-5X your profit…easy. A few of my friends made over 700% during this period, shorting BTC and made 3X as much shorting altcoins.
So just remember the wise old saying…. “The trend is your friend till the end”.
As a general rule of thumb, if Bitcoin moves up, then altcoins move down. If Bitcoin moves down, altcoins move down. If Bitcoin consolidates (moves sideways) then altcoins move up. If you can follow the simple rule, you’ll have no problem knowing when to short or go a long with margin trading altcoins.
Tip:TradingView will show you the altcoins that are moving with or against Bitcoin under the comparisons feature.
You can use this highly useful feature in order to view which altcoins are about to drop or rally before it happens. Bitcoin typically leads the way as far the trend so, for example, if you see Bitcoin starting to quickly drop and know which altcoin(s) move in the opposite direction, you can set up a long trade for those altcoins before it happens.
However, make sure to always keep a tight stop loss in case the altcoin decides to move in the same direction as Bitcoin.
How Much to Leverage: A Warning to All Newcomers
One of the more significant facets to margin trading with Bitmex is that you can leverage your trades with as much capital as you want. With that said, I highly recommend you keep the leverage to around 3X-10X to start. Anything above this and you’re risking liquidation. One false, call with a bit too much leverage, and your account can be wiped out in no time. If you’re trading with 20X and over on a longer term trade, you’re just looking for trouble.
If you do decide to leverage more than 20X, make sure you do it with a small amount. Experienced traders who scalp trade with 20X-40x are typically watching the charts like a hawk for any dramatic movements. If or when the trade moves against the trader, with strong full-bodied candles, stop losses are typically put in place. Never try this unless you have at least several months of Bitmex trading experience.
No matter what, remember to…
Always plan your trades out ahead of time and never trade in a rush. Typically, when you try to “catch a falling knife” or “catch a moving rocket”, things don’t end up going very well for you. The more adrenaline coursing through your body, the more idiotic your decisions become.
The Difference Between Isolated and Cross Leverage
You have two types of leverages with Bitmex, Isolated and Cross. You can switch between one or the other by simply adjusting the leverage slider on the “Your Position” box located on the left hand side of your trading panel. Use Cross leverage by moving the slider all the way to the left (obviously where it says “Cross”). Use isolated leverage for the remaining numbers (2x,3x,5x,10x,etc)
Now bear in mind….Isolated leverage does not automatically multiply your position. No one on YouTube seems to be explaining this properly. Once you move the leverage slider, this merely adjusts how much margin you can use. You still need to manually change the quantity yourself.
For example: if your account contains $1000 and you move the leverage slider to 3X, then you’re capable of trading with $3000. You need to manually input $3000 into the quantity box.
Regarding cross margin…
You no longer need to worry about moving the leverage slider. Cross will simply use all the funds available in your Bitmex account for the margin. Just think of it as an automated way of Bitmex calculating the margin for you.
Now, read this sentence carefully… your profit is determined by the quantity and not the leverage itself. Leverage has nothing to do with profit. The amount of profit that you make is dictated by the size of your position. The leverage simply sets a limit on how much you can borrow for the quantity of your position.
Here are a few examples of Cross margin…
Your account contains $1000 and you want to use 3X leverage. All you need to do is input $3000 into the quantity box and your account is automatically at 3X leverage. If you wanted to 10X your leverage, you would simply input $10,000 into the quantity box.
By using cross margin, you’re eliminating one step from the process of manually inputting the leverage (moving the slider). The only thing you need to worry about is inputting the amount into the quantity box. However, if you don’t want to utilize your entire Bitmex balance, isolated margin may be the right choice for you.
I personally recommend using cross margin and only deposit a limited amount of funds into my account so I’m not tempted to lose it all in one trade.
Beginner Bitmex Quick Tips & Trading Strategies
Trading on Bitmex can be extremely fun or depressing depending on what strategy you decide to use. Here are a few tips I picked up along the way to help maximize my gains and lower the chances of losing a trade.
Be the Market Maker, Not the Taker – don’t waste so much money on fees. If you’re using “Market” with most of your trades, you’re getting killed here.
If you’re not familiar with the terms market maker and market taker, simply put… a market maker creates limit orders within the order book (thus waiting for his trade to execute). A market taker uses the “Market” button when buying or selling into a position (thus executes a trade immediately at market price).
Always use limit orders (you’re the market maker) for your trades. The fees are 1/3 the price of a taker fee (market taker). Also make sure to click on the “post only” tick box so you’ll only be able to use limit orders.
Many times, depending on the market, you’ll receive a rebate on your fees. While the fees seem small at first glance (0.0075% taker fee), this adds up to a lot when considering that this fee includes your leveraged amount and not the actual funds in your account. For example, if you’re on cross margin at 100X, then you would be paying 7.5% on the total amount.
The only time I recommend using market is during stop losses. Use the stop market feature when setting your stop losses. The market moves so fast that most of the time, if you set a stop limit, it won’t get filled. You’ll be left holding the bags or worse, getting liquidated.
Use Cross Leverage – I covered this above, but it’s worth repeating. Most of the professional traders use this leverage type because it helps guard against those crazy Bitmex fluctuations where you might have the right call, however you get liquidated right before that major pump.
For example: If you have 1 BTC and you open a position worth .1 BTC, on normal 100x leverage, your liquidation would be ~$60 away from your entry price. With Cross, you have .9 BTC as margin, meaning your liquidation would be about $600 away from your entry.
You’re risking your entire account balance with this margin type, however it’s well worth it considering all the major fluctuations (most notably Bitcoin). I recommend using a stop loss or better yet, only funding your Bitmex account with amounts that your willing to lose ($200 – $1000).
Pay Attention to Contract Details: Funding Rate – you notice of the bottom left-hand corner Bitmex, there is a contract details box. Inside that box is your “funding rate”. This plays a massive part with the trading landscape. This fee will get to be extremely high if everyone is longing and very few are shorting.
If this fee is positive and you have a long open, you’ll pay for that fee every eight hours on a perpetual swap. If you have a short opening that situation, you would receive that fee.
Beyond the fee aspect to this, there’s a pump and dump associated with it as well. Roughly around 30 minutes before the funding time, everyone will be closing their longs in order to avoid the fee. Once the funding has completed, the price will skyrocket. Position your trades around this time and you can make a quick daily profit.
Be Patient with Entry. Setup Limit Orders – never ever try to catch you can. By the time your order is filled, too late and you’re likely to get stuck with a horrible entry.
Set up various limit orders at key positions before a rally (or short) begins. The best way of doing this is scaling in and out of the position. I cover more on this within my swing trading guide located here.
In short, if you want to take a position at $7500 with $1000, then you want to scale in your orders at $7200 with $250, $7300 with $250, $7400 with $250, and $7500 with $250. This is the easiest and most effective way of gaining a good entry and exit positions up. Even outside of larger pumps, jumping into a massive rally is almost always a bad idea.
If you miss an entry, just be patient as another one is around the corner. It’s a lot better to miss an entry than lose money.
Stop Losses or Scaling In/Out – use one of these 2 strategies for protecting your capital. Here is my recommendation.
a) If you plan on using higher leverage (20X+ riskier approach) then use tight stop losses. This will prevent you from losing all your Bitfinex funds in one bad trade.
b) If you plan on using lower leverage (20X and below – less risky) then you can afford to scale out of a bad trade. I would highly advise initially testing this strategy with smaller amounts until you get a feel for it. Scaling out of a trade takes experience, but one where, if you master it, will allow you to walk away from most trades without a loss.
Neither one of these strategies is right or wrong. It’s a matter of personal preference and which one suites certain situations over others. If you’re more of a risk taker, you may prefer scaling. If you like to keep things conservative, then stop losses may be your “bread and butter”. Each one has their pros and cons.
Let’s Wrap This Up..
Bitmex allows traders to make money on bull and bear markets. This is why I highly experienced traders love it so much. The exchange has gained a ton of popularity this year due to its enormous volumes and rich array of features
This is a great exchange when you don’t want to risk too much of your own money trading, however would like to utilize the trading leverage (thus more capital) for higher profits.
Personally speaking, I like to fail fast. Time is too precious of a commodity to waste away trading $100 at a time for possible $5-$10 profits.
If you’re looking for reliable, secure exchange, look no further than Bitmex. It offers large leverage positions as well as a ton of functionality that other cryptocurrency exchanges don’t offer.
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