TLDR: You will NEVER have perfect hedge on BitMEX

I must admit that Bitmex is the best exchange from technological viewpoint out there.

However, you must understand what is https://www.bitmex.com/app/dynamicProfitEqualisation and how you will suffer from it.

When BTC jumped from 585 to 632 I was long and made some $$$ after rebalance in the afternoon exchange took away 19.97% of my profit.

Why? because somebody was using sky high leverage and exchange could not liquidate his position.

20% was the rate when price went up - imagine how big adjustment will be during price decline - my estimate 30-50%

For example, you have 5 BTC and price is 600. Your USD holdings are 3000 USD. You go and sell 3000 contracts XBTUSD.

Next morning BTC is 400 USD and you think you are hedged. But if there is 50% adjustment to profits - you have only $2500 in you account.

My question was to BitMEX - "Why do you allow such big leverage? 5x is enough". They told it attracts liquidity.

IMO it only attracts kamikaze traders who want to blow up account and pushes other traders away.