Ive had a ridiculous experience with Bitmex, both fun and depressing, but I think Im finally getting a grip on it, so I wanted to share some things Ive learned. For clarity, when I first started using Bitmex, I lost about 3 BTC over the course of a month because I had no idea what I was doing and Im an idiot. Since then however, Ive taken .06 BTC and Im currently at 2.7 BTC from Bitmex alone in a few weeks. It has the potential to make you rich, but also super broke. Do not take it lightly.
If you've never used Bitmex before, you can read my original newbie guide on how to start using Bitmex here:
https://www.reddit.com/r/CryptoCurrency/comments/84stai/bitmex_for_dummies_leveraged_trading_longshorts/Also a reminder, you get 10% off fees if you sign up with a referral code. If you already signed up and didnt use one, email support and ask them to apply one, it's pretty quick and definitely worth the 2 minute hassle. Would appreciate if you use mine, but just make sure you use something to get the 10% off: "
http://bitmex.com/register/BCCNeF"
1.
Maker vs Taker: I wasted SO much money on fees originally before I knew about this. Market buying/selling means you pay a fee and based on the last point that is very expensive. If you set limit orders and choose the "post-only" option, you will only place an order if it doesn't execute immediately. If the price hits your mark, you'll actually receive fees rather than paying them. While that seems super small, as mentioned when working with high leverages it adds up a LOT. Fees are based on leverage, so if youre cross or 100x, youd literally pay 7.5% just to open an order. At 100k contracts, this is nearly .01 BTC.
2.
Cross Leverage: Far left on the leverage slider. This is 100x leverage, but it uses your entire wallet balance as margin. 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. Nearly everybody uses this because it helps guard against those fluctuations where you have the right call, but you got liquidated right before. It does mean you can lose 300% or 700% of your money though, so be warned, use stop losses.
3.
Funding: In the bottom left of Bitmex, theres a Funding Rate. Every now and then, this will get ridiculously high (i.e. if everyone is longing, and no one is shorting) and play a massive part in the landscape. If the fee is positive and you have a long open, you will pay that fee every 8 hours. If you have a short open in that situation, you get paid that fee. On 100k contracts and a .2 fee, this is .02 BTC, which isnt bad at all. More importantly beyond the fee though is the pump/dump around it. In the case of a positive .2 fee, the price on Bitmex will tank ~30 minutes before funding (because everyone is closing their longs to avoid the fee) and the second that funding goes through it will skyrocket. Often times its worth it to pay the fee just for the price bump afterwards, but Id honestly recommend just having no position if theres a massive funding fee coming up.
4.
DCA and Small loss vs Big one: Theres two schools of thought to a losing trade. You can dollar cost average, meaning, if I enter long at $9500 and it goes down, I can add more at $9400 to get my entry to $9450. This sometimes works beautifully if you truly believe it goes up. However, the flipside to that is that you add at $9400 and it then goes to $9200. Thats nearly a 300% loss. Adding at stoploss at lets say $9430 would have lost you 80% instead. But there are times where your stop loss triggers and it shoots up right after. You need to make a decision in these situations how youre going to handle it. Ive done days where I make .2 BTC four days in a row and feel great, but then lose 1 BTC all because of one bad trade I refused to get out of and its all nullified.
5.
Wait for entry and pre-set orders: Bitmex swings HARD. If Bitfinex has a $100 candle, Bitmex may have a $200 candle, solely because of overloaded blocking people from new orders meaning only orders on the books before the big candle are counted. Never, ever, ever, try to catch a candle. By the time your order goes through, its too late and youll likely be stuck with a terrible entry as its about to retrace. Additionally, use this to your advantage. If you expect a $100 pump, put your take profit close at $170 above, or a take profit earlier and then open a short at $170 above with expectations for a retrace. Even outside these large pumps, jumping into a wave is almost always a bad idea. If you miss an entry, just be patient. Missed profit is better than losing money.
6.
Signals: You should learn how to do your own TA, but theres also lots of Twitter guys/Discord groups that provide signals. One thing youll find is they never agree on anything. Dont trust any single person because every single one will brag about how much money theyre making, but they can and will be wrong. Use them as guidelines, but not gospel
Hi! Nice post! Very useful.
In Bitmex you should always have BTC for any kind of investment, right? What if I have Ethereum only?