Bitcoin Forum

Hey everyone. I'm working on a small research paper about crypto trading. I need your help to collect some insights of what both engaged and not so active cryptocurrency traders look for when selecting on which derivatives crypto exchange to trade.

What do you expect from the ideal crypto derivatives exchange?
Name 3-5 most important things ranged by importance.

E.g.:
1. low fees
2. high leverage
3. wide range of assets
4. long exchange history & reputation

I will post the research here when ready with it. The more answers I get the better representation of each group. Thanks!

I don't think you will get a large enough sample to conduct an accurate study relying only on the posts in this topic, however, I will help you by stating the most important factors I consider when choosing an exchange.

1-Reputation
2-Volume
3-Ease of withdrawal
4-Fees
5-Ease of use

Number 1 outweighs all other 4 factors for me.

Thanks for your input! I know I likely won't get a very accurate one, but it's worth the effort. I'm hoping to get more opinions from all kinds of sources.

for miner exchange

1-reputation
2-wide range of assets
3-speed of withdrawal

I'd expect

1. Good volume/liquidity - the page should be responsive too so orders trigger on time and can be cancelled quickly
2. A good reputation - reasonable care is put into how users funds are stored (I. E its not all in a hot wallet).
3. Fast and cheap withdrawals with just 2fa (password plus authenticator/sms)
4. Honest fee descriptions for leverage - how much you pay the market for your position every day and reasonable fees
5. If it has a good api and external charting software (like bybit and bitmex use trading view) its a lot faster and a lot more responsive that way. It makes it easier to cancel a trade if the site gets ddosed if they stillnallow trusted premium bots through... Or bots can keep pinging a request.
6. Compatibility with other platforms, can I access it on my mobile or do I have to be near a desktop pc?

Thank you for the feedback! You put liquidity on top and order control/execution. Most of the derivative platforms have time-based withdrawals 1 to 2 times per day in batches. I would like to see a derivative platform with available withdrawals on demand.

What about instruments and trading options? What would you like to see besides the six things that you pointed out?

1.Low fees
2.Volume
3.Good UI/UX
4.Reputation
5.Instant Withdrawals

These are the major things

I concur, with the order as well. OP, can you share the result once you are done with your research paper? I'd like to know the results as well. Thanks :)

I quite like binance margin, if they had higher margin more than 4x avaliable it'd be better though.

Yeah bybit and bitmex have time based withdrawals and they're a bit annoying. Bitmex is also hard to withdraw afaik because they send a confirmation email but don't mention it on their site anywhere once you withdraw.

Coindcx is an Indian startup one of my contacts suggested and if they had higher leverage and had been going longer (and weren't in India) they'd be pretty good... But they're alright now with small amounts.

I'd like a good choice of trading pairs per se but realistically as long as they have btc usd and a few well known alts then they're pretty good... Ltc and eth and btc are all pretty good pairs I'd expect on a lot of these exchanges.

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A friendly, proactive and fast support would be pretty good too.

Also a system that is pretty robust and manipulation proof. I think coinbase has tried to adopt a system like this to make arbitrage less possible however I think things like liquidation price and some sells are better off following a market average. A second layer on a high volume market is better than a first layer on a low volume one imo...

Yes, I will release the research here but don't expect it to be something extraordinary, otherwise thank you for the answer. From what I see for now security, liquidity, order control, and withdrawals are on the top. I need more answers to evaluate more correctly and correctly sort it by importance.


What kind of security practices and options do you want to see?

Btw it would be very useful if answers here input security practices and what kind of security options do you want to see for an account, withdrawal protection?

Would people would like to have a layer 2 protection a.k.a different passwords for trading and withdrawal besides account password?

And on top of that - do you want to see an SMS, 2FA, e-mail code confirmation requirement when withdrawing?


Binance now has leverage trading with 125x which is very impressive. Thank you for your answer!
Let's evaluate what kind of protection system would matter a lot for your decision when choosing between derivatives trading platforms?

Sorry for the long post, but to end it with one more question to leave more room for thought:

What kind of innovative instruments would you like to see? (Not only trading pairs, but also interface options, order control etc... everything is welcomed)

 

I guess we are already having lots of crypto exchanges which are serving us with wide range of features. Still, I guess the following things are missing out when I personally look for "preferred exchange".

1. Active support on bitcointalk.
2. Mobile app for on the go trading
3. No KYC for crypto only traders
4. Ease and attractive interface
5. Speedy processing of deposit/withdraw

My list of importance goes something like this:

1. Good liquidity
2. Good platform speed- I don't like trading on Bitmex especially when things are moving fast and their platform occasionally overloads, which can result in high slippage or losses.
3. Good reputation- This could be tied with #2, but I am always wary of very new sites offering derivatives as some of them could just run off with your funds with no warning.
4. Easy-to-use interface- You trade best when you're familiar with an interface, so it's important on newer sites that the interface is similar to existing ones on more popular sites (like Deribit and Bitmex), or it's just designed to be quick to learn with proper documentation.

I don't ever use high leverage, and mathematically it just doesn't make sense to use insanely high leverage like 100x or 200x, so the availability of very high leverage is just clickbait to reel in newbie traders IMO.

I value the security of funds more than quick withdrawals, which is why I trust Bitmex more than some exchanges with my funds, but at the end of the day there's no way to tell how an exchange is keeping user funds, and any exchange could potentially have a serious security breach involving the loss of funds at any time.

The importance to me lies within

1) transparency
2) adjustable leverage with convinient SL/TP
3) security
4) liquidity
5) fast withdrawals

Interesting thread. Will keep an eye on it.

There are people who want to risk it from time to time and try with the max leverage. In the end, it all comes down to how people handle the instruments. I see many people list Reputation, but what if the exchange is new? Reputation is built with time.

Best customer support in the appropriate time should be there if we have to call an exchange as ideal exchange to trade assets.This is mostly lacking even in most reputed exchanges because they don't care about issues with their customers.Even if they are charging little bit more fee for having best support is appreciated.

Volume, volume, volume. When I am looking at a new place I would like to trade at, it could be a regular exchange fiat-btc vice versa, it could be big altcoin exchange, it could be derivative exchange, it could be futures exchange ALL of them reach to same level for me. The more real volume it has, the bigger interest I have in them but I do not mean volume that is fake and basically does it between itself to make it look higher, those are still horrible and I wouldn't use them if I realize something like that is going on.

I only use places that have real high volume and honest to god if I figure out another place that has higher volume that is more real I will definitely switch and not stay at the same place. So volume is definitely the most important thing for an exchange, hands down.

NO KYC today imight be too much to ask from a market, I'll ask anyway but the most important for right now is to have more volume. If p2pb2b or latoken can earn trust from the traders, there might be chance that people will not just trade in Binance but also to p2pb2b and latoken as well. TRUST may not be considered a feature to the exchange but lets just add it after all we want to them to be trusted. Security and low withdrawal fees.

NO KYC
TRUST
SECURITY
LOW FEES
and least of all all of us uses it.

I use high leverage on medium and long term positions, it just makes sense sometimes...

For example, at 9500 i bought 1BTC@10x lev (with a sl around 9400), we then went up to 9800 where I releveraged up to 25x and put the same funds back in buying 2.5BTC - making my average buy in price 9680 (think my sl was around 9700 or something)... and I followed the chart up to 10300 and my sl triggered at 10120 afauj,,, Was decent profit since I'd started. Sometimes it's nice to use 10x until you get your profits after an increase in actual price of 10-30% and then 100x some of your profits (keeping the original entry price) without risk of losing any of your original capital - especially if we're in a parabolic move and you can look back at it every 5 or 10 minutes...

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Someone mentioned an app above too which is pretty good to have if the exchange offers it, I just noticed bybit do.

Also, not sure if I mentioned but I prefer perpetual contracts to the time limiting ones...

OP, I don't trade derivatives and never have, but mikeywith is probably right with his top two criteria--reputation is extremely important in the world of cryptocurrency, because there have been so many exchanges that have turned out to either be outright scams or have gotten their customers' funds hacked.  I think it would be critical that the site be secure and have whatever protections are in place at other derivatives exchanges--like the CME and anywhere else you can trade stock/commodity futures.

Volume is also important as well.  I think one of the reasons why Bakkt hasn't succeeded like many thought it would is because there aren't many people using it as of yet, and the market needs to be liquid in order for traders to have confidence in it.

Anyway, good luck on your report, OP.  I don't think this is the best place to get answers, but I'm sure you'll at least get some.

Thank you for the answer! Reputation comes with strong security, this is why I am all in for strong withdrawal protections put in place.

Thank you all for the answers!

From what I have seen until now the most important factor seems to be reputation therefore strong security etc..

Not exactly, even the most reputable crypto exchange out there can have be hacked so there is really no way of relating reputability and security all at the same time. If you want to be reputable though you must not only prove yourself of being a secure exchange you must also prove that your service is reliable meaning your site is up and running all the time with zero down times and that is including unnecessary maintenance and lags from your UI. From a perspective the users with you being reliable and secure I know that you can be trusted with our money and then you can see your reputation grow naturally.

Most people will stay focus with coin list and volume because the can't doing transaction without that. Reputation also came from both and if the exchanges want new member to get fresh fund they can release give away/ payment program in their sites. The crucial part is about speed transactions and security program, exchanges is the first place hacker will take action, that's why KYC program ( ID, 2fa ) really needed. Many factor can become good sign to join exchanges but safety is always become member focus and priority.

I agree with you, but my point was different. I meant that in order for an exchange to be reputable it needs strong security to prove itself resistant against bad actors or platform downtimes and lag.


Transparency is very important and we see some exchanges without faces and names behind them which is bumper for many people in my eyes. What do you think about KYC (not mandatory) but to have it as an option?

I think people will say volume, value and speed transaction but I must say low fees is not our priority anymore because alternative to reduce it already exist. We only need to switch into altcoin than start withdraw process and all trade fees ( mostly ) below 1%. This time have many coin list is the ideal exchanges, market will created by enthusiast and exchanges only need to promote it.

Low fee may not seem like a prioritized one as we do see almost all the exchanges are following same type of fee structure and in same level of percentage. For a skilled trader, fees is not a concern always. But, if exchanges start charging fees out of trend means that would be a problem. For example, if they do more than 3% or 5% then traders who target 2% yield per trading may start facing problems.This is the reason we need to confirm where the fees are sitting and only the traders who already encountered such problem might want to confirm these things before start using a new exchange. Overall, I mean to say, confirming low fee still a prioritized one.

What I expect from a new derivative exchange, it should have more volume.

I think three is enough for me.

Reputation since there are a lot of exchanges nowadays and it is hard to find one that has a great reputation. Low fees since if you really wanted to trade, this is important. And last but not least, the volume.

Yeah and you can't really prove that without having a clean record against hacks, threats, and data leaks. Having this kind of problem early on will just hinder your growth and maybe even be the cause of your early downfall. Building a new crypto exchange is no joke and in order to get some market share from the big fishes you needed to be reliable and secure so you really don't have any room for any errors early on. So if you are asking for this kinds of questions I'm afraid to tell you that you are still not ready to create your own exchange, you still need to plan more particularly on your website's U.I. and security because this will be the foundation for your crypto exchange.

My top five must-have features of a perfect exchange are:
1). Good reputation
2). Strong security means
3). Convenient interface
4). Margin trading
5). High leverage
CEX broker seems to have it all, but I am hesitating because the exchange is new. What do you think, guys? You can check it here – https://cexbro.com/