Bitmex is an acronym for (Bitcoin Mercantile Exchange) and is a one of the most popular leverage trading platform based on Hongkong and launched in 2014, The platform helps its users speculate on the future values of digital currencies. It also operates in Europe, South Korea, and Japan. Bitmex charges a varying rate as commission on each trading transaction. The exchange offers margin trading with the highest leverage on the market.
BitMex Trades In Following Currencies:
Bitcoin (Symbol: XBT )
Cardano (Symbol: ADA )
Bitcoin Cash (Symbol: BCH)
EOS Token (Symbol: EOS)
Ethereum ( Symbol: ETH)
Litecoin ( Symbol: LTC)
Ripple ( Symbol: XRP)
One thing for sure with this platform is that This platform is for advanced traders only who somehow can predict market movements. They can earn huge money with this platform. But small and novice traders can loose there all hard earned money in just one minute if their prediction goes wrong.
Advantages of BitMex:
- Funds can only be deposited or withdrawn from bitmex only in Bitcoins.
- Bitmex provides up to 100X Leverage.
- Very convenient and functional interface, understandable to those who are familiar with trading.
- Users can trade futures absolutely anonymous, which is a huge advantage for those who don’t want to leave their personal data on the exchange for confirmation.
- No hot wallets, bitcoin withdrawals can be paid out two times a day after manual verification.
- High-profit percentage.
- Bitmex has good support for web services and webhooks for integration with there websites.
Disadvantages of BitMex:
- There are not many cons, The only thing tricky about bitmex is Risk, You can lose all of your money in minutes if you are not a good trader.
- Because of security issues you cannot stay logged in for long times after inactivity, Bitmex logs the user out after some time of inactivity.
- There is no mobile app for bitmex, It only has a website which is mobile friendly.
Get Started With BitMex World
In order to trade in bitmex user have to create an account on their website. Just follow simple method of registering to there website.
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https://www.bitmex.com/register/1x0eoA
After opening URL, you will be presented with Registration Form, Just fill info like first name, last name, email, password, and country, check the checkbox which says “I accept the Terms of Service” and press Register.
After submitting, BitMex will send you a verification email at your provided email id, just open your mailbox and click “Verify My Email”.
After clicking, you will be automatically logged into BitMex with your username.
To understand Bitmex we need to break this into multiple parts, Please see image to understand it better:
Currencies which can be traded in BitMex.
Trading Strategies Limit, Market, Stop Market.
Limit: A Limit order is an order to buy or sell at a given price or better.
For example:
The current rate of bitcoin is 7614 USD, I want to Buy 400 USD worth of Bitcoin when price reach 7000 USD. Then, in that case, you use limit option.
Market: The market option is very straightforward, this means that you are buying in current market rate.
Stop Market: A stop order is an order which does not enter the orderbook until the market reaches certain trigger price.
Traders use this strategy for following reasons:
To limit losses which can occur overnight if the price of bitcoin goes suddenly high or low
As an automatic tool to enter the market without waiting for the certain price to reach its value.
Buy Market: This will be used when we have the market to buy some contracts at given price or in simple language when we predict bitcoin will go up , we will select this option, This is called as BUY LONG.
Sell Market: This will be used when we have the market to sell some contracts at given price or in simple language when we predict that bitcoin will go down. We select this option , This is called as SELL SHORT.
Leverage: This is the most intresting part of Bitmex, Well this is a facility given to trader to buy or sell with the amount of bitcoin which they don’t have in there wallet, simply saying this is kind of a multiplier.
For Example: If you have 0.1 BTC and you select 10X Leverage , that means you are playing with 1 BTC and now profit will be as per 1 BTC not 0.1 BTC.
In a same way if you opt for 100X that means you now trade with 10 BTC, But remember one more important thing, More the Leverage More the Risk.
Now, this is the point where comes the Liquidation Price. This is the price of bitcoin which once reaches , you loose all your money. So lets take an example:
SCENARIO:
Lets say you have 40 USD in your wallet and current bitcoin price is 7200 USD, Now you predicted that bitcoin will go up and you BUY LONG, 300 USD at 7200 USD (Market Order) at 10X leverage. Now, what this means is:
You predicted Bitcoin will go up.
You Bought 300 Contracts @ 7200 USD @ 10X, which means, if liquidation happens you loose 30 USD from your account (Yes you hear right, You only have 40 USD and you can buy BTC worth 300 USD because of 10X leverage).
Liquidation price is calculated as 6500 USD. Which means if BTC reaches 6500 USD you loose all your 30 USD.
Interesting fact is that liquidation price is calculated on basis of leverage, so if you choose 100X for above scenario , your liquidation price may come to 7000 USD. Which is far more risky then 10X leverage.
Sell Order: Sell order placed by traders across the world.
Buy Orders: Buy order placed by traders all over the world.
Current Bitcoin Price: Latest and current bitcoin price.
This was basic about bitmex, You can learn more about bitmex in my next post.