To Trade on Bitmex or Not to Trade on Bitmex That is the Question

[butka]

In this thread I would like to share with you my initial experiences with Bitmex. I hope that some members of this forum might find them useful.

I didn't plan to try Bitmex at all (it looked to me too risky), but then I decided to give it a chance.

What I found out is that many people treat Bitmex like a casino, but in reality, you don't have to do that. Nobody is forcing you.

The good thing is that if you choose a reasonable leverage (10x or below), you are risking less money from your account compared to no leverage at all. But at the same time this is a bad thing in case you decide to push your leverage too high. The trade off is that the higher the leverage the higher the danger of your position being liquidated.

What people typically do is choose to go Short or Long and then, like a roulette, wait for the outcome, which can either be a win, or a liquidation. Even if you are extremely lucky and have a winning streak, just one liquidation is enough to ruin your account.

The solution to this is really easy. Always set a Stop Loss. If you go Long, go to the Stop Market tab



and set a Sell Stop somewhere bellow the Entry price. And the other way around when you go Short.

It is also important not to risk a substantial portion of your account. You can do that by adjusting your Position Size. Your stop loss should enable you to lose only a few percent at a time (in case the trade goes in the opposite direction).

Depending on your balance, your risk can be set as a percentage of your total balance. Then you can determine your desired stop price, and calculate the number of contract you should trade so that in the case of your stop loss being triggered, you lose just the risk percentage. I always risk 2% or less of my account.

Here is a good online calculator where you can do that:

https://blockchainwhispers.com/bitmex-position-calculator/

Fill out the left form where it says Enter Data. Then you can check the Results. It can give you your Position Size, Risk Amount in BTC and USD, Stop Loss Price in case of Short or Long Position, Take Profit Price, and other info.

This calculator can also tell you what you maximum leverage should be so that you are stopped out, rather than liquidated. However, it may suggest too high a leverage. Rather than accepting that, I still suggest to go with a smaller leverage (up to 10).

Never ever get liquidated. Stop your trade before that happens.  I know that you might still have hope of reversal, but that's pure gambling. And that's not the way to trade if you want to make consistent profit.

Go with low to moderate leverages. Never go beyond 10, unless you are very experienced trader.

Now what happens when the trade goes as planned?

- Don't be greedy. Take profit, at least some percentage of it.

- For example, take 50% profit at some point. Your trade is now officially a winning trade. And leave the rest of it to go as far as possible.

Remember out of 4 possible outcomes, 3 are acceptable, the fourth is not:

1. Small losses - Acceptable

2. Small wins - Acceptable

3. Huge wins - Acceptable

4. Huge losses - Not acceptable

Protect your account against Huge Losses.

I would appreciate your input, especially if you are an experienced Bitmex trader, and especially if you think that I've said something inaccurate.

Good luck!

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[Gloverwrt]

You seem to be discussing trading in general and nothing directly perculiar to Bitmex exchange.
Day trading is a gamble, but you can bank in your analysis to know where the dice would land, it's risk makes it unpredictable, and there is no certainty to where it would actually land, nor can there be.
Lesser risks, manageable investments, controlled trading are some keys to succeed.

[taki183]

There are always decision. You have to chose your own exchange. I always try for a new ones. From the last ones it's Velvet Exchange. Very interesting, workng on a demo on this moment. So wathing it.

[butka]

You seem to be discussing trading in general and nothing directly perculiar to Bitmex exchange.

In a way you are right, you should manage your risks no matter what exchange you are trading on. However, what is peculiar to Bitmex is margin trading. Margin trading can devastate your account more quickly than any other typical exchange out there. Especially if you think you can get rich quickly with 100x leverage.

[Bitcoin_Arena]

As i always believe, The higher the gains might seem, the higher the risk and loosing all you have put in.
i usually prefer small gains in the normal exchanges say between 2 to 10% is enough at least every 48 hours . Greed is what make people to get into serious losses.

[rodskee]

That is choice the decision is yours
There have many more exchange for trading job you choose
There is nothing argue using bitmex or not people can choose exchange easy and convenient to use for them

[gentlemand]

No mention of system overload? It's happened a few times and totally ravaged a significant number of accounts. It can also happen when other sites go down and send Bitmex's operation haywire.

Bitmex aren't regulated, or have years of faultless performance or appear to offer much in the way of reassurance if they crap out. It's pure wild west and everyone on there are the lab rats. That should be kept in mind.

[BitHodler]

No mention of system overload? It's happened a few times and totally ravaged a significant number of accounts. It can also happen when other sites go down and send Bitmex's operation haywire.

It's his initial experience, so he hasn't yet encountered any of that what you are referring to. It very likely happens on every derivative platform since they all have similar incentives.

BitMEX is by far the largest platform, so when something happens over there, you'll definitely get to know something happened, which isn't always the case with other (much smaller) platforms.

The danger of these platforms is that people easily overestimate themselves after a few profitable trades with smaller amounts. Just like in gambling, if people win and gain confidence, they usually up their amount and rekt themselves.

It's definitely a good thing that you mention how important it is to use the stop loss feature, because beginners tend to overlook the importance of that and wipe our their entire position in the process.

[butka]

No mention of system overload?

Thanks for bringing this up.

It's his initial experience, so he hasn't yet encountered any of that what you are referring to.

You are completely right. I haven't experienced one yet. Now that I have looked into it, it seems that not even stop losses can save you from disaster in case of system overload. That's a huge no-no for Bitmex then. If you can't protect your account from such events, why would you go there in the first place.

My account is small so they can't really hurt me, but there are people who are willing to put huge amounts of money. I've no idea how they deal with this problem. Any comment on that?

Bitmex aren't regulated, or have years of faultless performance or appear to offer much in the way of reassurance if they crap out.

Yet another great point. They indeed seem not to be accountable to any jurisdiction.

Thanks for your comments. There are at least two big problems everyone should know about before even thinking about trading on this platform, or trading with substantial amounts of money.

[gtcms]

nothing directly perculiar to Bitmex exchange.

I agree with Gloverwrt.

I have accounts in some different exchanges, including platforms with high leverage (bitmex and bitseven).

And if you think about trading on bitmex or not, it is better to read this article:
https://medium.com/swlh/a-storm-is-brewing-over-the-largest-bitcoin-exchange-f956324b449f

Anyway Bitmex is one of the biggest exchanges now, and if they will solve overload problems they could be the best.

And trading with leverage 25x and higher is very similar to gambling, I think everybody understand it.

[nicster551]

In this thread I would like to share with you my initial experiences with Bitmex. I hope that some members of this forum might find them useful.

I didn't plan to try Bitmex at all (it looked to me too risky), but then I decided to give it a chance.

What I found out is that many people treat Bitmex like a casino, but in reality, you don't have to do that. Nobody is forcing you.

The good thing is that if you choose a reasonable leverage (10x or below), you are risking less money from your account compared to no leverage at all. But at the same time this is a bad thing in case you decide to push your leverage too high. The trade off is that the higher the leverage the higher the danger of your position being liquidated.

What people typically do is choose to go Short or Long and then, like a roulette, wait for the outcome, which can either be a win, or a liquidation. Even if you are extremely lucky and have a winning streak, just one liquidation is enough to ruin your account.

The solution to this is really easy. Always set a Stop Loss. If you go Long, go to the Stop Market tab



and set a Sell Stop somewhere bellow the Entry price. And the other way around when you go Short.

It is also important not to risk a substantial portion of your account. You can do that by adjusting your Position Size. Your stop loss should enable you to lose only a few percent at a time (in case the trade goes in the opposite direction).

Depending on your balance, your risk can be set as a percentage of your total balance. Then you can determine your desired stop price, and calculate the number of contract you should trade so that in the case of your stop loss being triggered, you lose just the risk percentage. I always risk 2% or less of my account.

Here is a good online calculator where you can do that:

https://blockchainwhispers.com/bitmex-position-calculator/

Fill out the left form where it says Enter Data. Then you can check the Results. It can give you your Position Size, Risk Amount in BTC and USD, Stop Loss Price in case of Short or Long Position, Take Profit Price, and other info.

This calculator can also tell you what you maximum leverage should be so that you are stopped out, rather than liquidated. However, it may suggest too high a leverage. Rather than accepting that, I still suggest to go with a smaller leverage (up to 10).

Never ever get liquidated. Stop your trade before that happens.  I know that you might still have hope of reversal, but that's pure gambling. And that's not the way to trade if you want to make consistent profit.

Go with low to moderate leverages. Never go beyond 10, unless you are very experienced trader.

Now what happens when the trade goes as planned?

- Don't be greedy. Take profit, at least some percentage of it.

- For example, take 50% profit at some point. Your trade is now officially a winning trade. And leave the rest of it to go as far as possible.

Remember out of 4 possible outcomes, 3 are acceptable, the fourth is not:

1. Small losses - Acceptable

2. Small wins - Acceptable

3. Huge wins - Acceptable

4. Huge losses - Not acceptable

Protect your account against Huge Losses.

I would appreciate your input, especially if you are an experienced Bitmex trader, and especially if you think that I've said something inaccurate.

Good luck!

Trading in Bitmex is kind of frustrating because you can be deceive by how many margins you can have and the same time it is more risky to be liquidated.

[butka]

And if you think about trading on bitmex or not, it is better to read this article:
https://medium.com/swlh/a-storm-is-brewing-over-the-largest-bitcoin-exchange-f956324b449f

Thanks for the link. The article is really great. I'll quickly quote the main conclusions here:

1. BitMEX trades against their customers
2. BitMEX weaponizes their server problems
3. BitMEX monetizes customer liquidations through their insurance fund

so that everyone can have a quick look at them and keep these problems in mind while trading. The article also suggests several ways Bitmex could use to eventually fix these problems.

[outsidertrader]

BITMEX is good for daytrade, no good for swingtrade or longertrades.

But There are some problems, sometimes the system gets overloaded, it doesnt let you place the order, even stoploss orders.

So you better be right on the trade direction.

 You sould play by leverages using a % of your margin, do not transfer big amounts to their accounts.

[Yaddady]

I've always dreaded leveraged trading especially the feedback I've gotten from those who have ventured into it have not been heartwarming. But reading this post, I'm motivated to give it a shot, probably researching more about it and then going in. I guess it's a case of nothing gained, if there's nothing ventured.

[butka]

But reading this post, I'm motivated to give it a shot, probably researching more about it and then going in.

Yes, please do your own diligence and enough research.

I'm glad this post motivated you to give it a shot, but please note this post should NOT be understood as my endorsing of Bitmex in any way.

I personally was willing to risk a very small amount of money and was very well aware it could all be gone in a blink of an eye.

[1Referee]

BITMEX is good for daytrade, no good for swingtrade or longertrades.

Bitmex is perfectly suitable for longer term trades, especially if you don't force yourself to be active when you shouldn't be. Day trading is more like gambling, regardless of where you place your stop loss. It's just you speculating on a positive outcome and swallow the loss in case there is no positive outcome. Everyone can do that. It involves no skill at all.

If you stick to lower leverage counts, you don't have to choke the crap out of your positions by placing tight stop losses. The crypto market organically bounces up and down 2-3-5%, which means that there is high probability that you lose more than you make if you work against the market. 2-3x leverage is quite high already, but still allow your trades stay up longer and let the market do its thing.

[figmentofmyass]

that's a good overview, thanks for sharing. i definitely agree with using 10x or less leverage. using much more than that is gambling. i cap short term trades at 10x and long term trades at 5x (so i can keep wider stops).

i definitely agree with this bit:

Remember out of 4 possible outcomes, 3 are acceptable, the fourth is not:

1. Small losses - Acceptable

2. Small wins - Acceptable

3. Huge wins - Acceptable

4. Huge losses - Not acceptable

i've experienced server problems a handful of times to be sure. it fortunately hasn't caused any huge losses for me.

[wuvdoll]

If you want to do leverage trading I highly suggest trying their beta version first. They have this testnet type of thing where you can have free money there and test it for free, it is fake money and you can't withdraw it and neither would it make any sense since its fake but basically you are trying to learn how to do leverage trading while spending no money at all.

I really enjoy doing it time to time, there is basically like a "faucet" type of deal where it gives you money whenever you run out of money and you can test it as much as you want. It is great for them as well since people get hooked on there and get money and than go do the real thing and make them money however I never went into the real thing because I lose even during the test parts of it .

[nl247]

Maybe you should actually be placing the topic as Margin trading and your experience. We all know when you are going the leverage way, you are basically in a more risk than when you are trading the spot market, and the same experience you will get with bitmex in that case, is the same experience you will get with any other margin market.

It is one thing to be trading and it is another thing to be trading with knowledge and good experience. After a trading mistake in a spot market, you can decide to just be patient until you recover your loss no matter how long it takes, but for trading the leverage way, once you are out, you are out, when it comes to getting liquidated and that makes it a different ball game entirely

[eaglewhite80]

Monkeys can use BitMEX
Pigs can get slaughtered
Bears can get liquidated
Bulls can get liquidated
Whales can get liquidated
Order could not be submitted: The system is currently overloaded. Please try again later.
People can also get liquidated
But that's about it.

That is basically the thing with leverage trading, we can all get liquidated, and there is no exception. This to me is more or less like gambling, and in this scenario, you really want to be careful which is why I always tell people that if you do not want to get burned easily, never trade margin without a stop loss and with nothing more than 10x to always be on the safer side due to the market volatility. A lot of people who approach trading as complete gambling without plan and strategy, met their fate in the real gambling that comes with margin trading. No escape from it when it comes to getting liquidated for not knowing what you are doing.