I want to daytrade on bitmex with leverage

[makvo]

As title says. Basically I've been daytrading mostly tiny accounts for practice for past 3 years. (don't have patience for paper trading )

I want to start building up my portfolio/balance at bitmex, I traded on bittrex, binance and few others but I just love bitmex for some reason. So I have few main questions I want to get opinions on.

One more thing, I know all these questions depend a lot on the trader but I still want to know opinions, to explain context with me, I like very small timeframe trades (20-120 minutes per open trade) I use stop loss and trailing stop mostly pretty tightly.

1) I want to use leverage which I know is dangerous, but is x5 profitable? is it good balance of risk and reward probability? I am also considering x10, or is it too much? Take in considerating my mentioned trading style

2) What are good indicators for daytrading in 5 min charts?

3) Is it possible to compound the gains? I know traders have minus days and they just try to go in plus at average of week/month, but is it realistic to compound it monthly or so? And raise your trading budget with it?

4) What is realistic percentage or dollar/btc gains? I don't plan on opening huge account with all of my savings or something, so I hope I can raise it from trading and grow it.

Thankies

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[N0sferatu]

Good thing you already have some experience in trading before starting with Bitmex! 

1) x5 is more than enough at the beginning. You may even start with x2 or x3 to get a feeling for this (highly recommended). A x10 leverage will wipe your balance away in minutes, especially with tight stop-losses (think again if you want to do this as spikes are usually bigger on bitmex).

2) None. The time frame is too short for any indicator. Look for candlestick patterns instead and use RSI & moving averages on a daily time frame.

3) I don't really get that question. 
To my personal experience, setting a goal for a week/ month or so isn't advisable. It will make you feel uncomfortable in some situations. But, it is definitely possible to grow your balance exponentially.

4) The most realistic to say is: "90% of traders lose money." See point 3 instead. 
If you're able to make recurring profits, you're ahead already.

[makvo]

Good thing you already have some experience in trading before starting with Bitmex! 

1) x5 is more than enough at the beginning. You may even start with x2 or x3 to get a feeling for this (highly recommended). A x10 leverage will wipe your balance away in minutes, especially with tight stop-losses (think again if you want to do this as spikes are usually bigger on bitmex).

2) None. The time frame is too short for any indicator. Look for candlestick patterns instead and use RSI & moving averages on a daily time frame.

3) I don't really get that question. 
To my personal experience, setting a goal for a week/ month or so isn't advisable. It will make you feel uncomfortable in some situations. But, it is definitely possible to grow your balance exponentially.

4) The most realistic to say is: "90% of traders lose money." See point 3 instead. 
If you're able to make recurring profits, you're ahead already.

Thanks! yeah well. I heard a lot that setting specific money goals is bad, guess I'll have to deal with it, I am happy if my balance will grow faster than a bank deposit interest after all

[leowonderful]

Bitmex's UI is great and very customizeable compared to that of a lot of other exchanges; might be part of the reason why you like the site. That's one of the main reasons why I use it myself.

As for leverage, I would suggest using leverage under 5x and rarely 10x if you really must. If you're setting market stops and using a tool like http://antiliquidation.com/ to calculate your stops and R/R, you can use leverage under whatever amount the site suggests (anything over means liquidation price > stop). Here's a good Medium guide on how to use the tool; pretty basic, but a very good read especially if you're new to Bitmex and leveraged trading.

I typically use just MAs and RSI for LTF trading, though I usually trade 15M in such a circumstance and not 5M.

For % gains, don't worry about that and rather just focus on executing trades with good setups at the right time. If a market is untradeable for you, don't force a trade and just wait 'till a good setup comes and use it. Don't force yourself to make a percentage gain per week or month or whatever your goal is too much.

[maxreish]

I am a bitmex trader for so many months now and great thing you are part of a leverage trading now.

1. I usually use 5x-10x leverage only and do not exceed to that level. It is still profitable if you execute big entry amount, then you can see that you are gaining even in that small leverage. Remember that small leverage is better safe than to use higher ones.

2. Been using MA, Stoch RSI and RSI only but I usually confirms it in 4hr and 1d tf since I am more comfortable and used to that tineframes as a scalper.

3. As for the budget, whenever i do gains i added up to my funds and also cash some and stick to my goal fund. It is your choice whatever your goal profits in a month, as long as you are gaining, then that is more important.

4. Realistic percentage gain of dollar/btc? Im not sure about it as I usually focus on my profits percentage and not with the pairing of usd/btc. Lol

[BQ]

If you want to margin trade, CoinMetro offers currently 3:1 leverage with 0 risk to end up with negative balance,
within a few weeks, margin posting is live which allows people to lend assets to margin traders (thus a way to earn passive income also!) - anyway this should also enable higher leverage.

The benefit of using CoinMetro for this is that the fees are calculated per minute, and the margin trading fees are the lowest in the market. Daily fee is 0.08% of negative exposure (30% annually).
So using CoinMetro might be much wiser if you, as you said, keep your orders open for smaller amounts of time, as you only pay as long as your order is open.

Also a fully regulated exchange so there's no risk for any shady stuff.

You can check out the margin platform and try paper-trading, just go to "Try Our Margin-Platform"  

[exstasie]

1) I want to use leverage which I know is dangerous, but is x5 profitable? is it good balance of risk and reward probability? I am also considering x10, or is it too much?

I use 10x very rarely.....it's really only for those "perfect setup" situations. 3-5x is my sweet spot. It gives you some cushion for wider stops.

2) What are good indicators for daytrading in 5 min charts?

ConnorsRSI is great for low time frame scalping. Combined with Bollinger Bands and either RSI or Chande Momentum, you'll have a good scalping arsenal.

3) Is it possible to compound the gains? I know traders have minus days and they just try to go in plus at average of week/month, but is it realistic to compound it monthly or so? And raise your trading budget with it?

Yes but the psychology of trading a larger account and short/mid term downswings in profitability (variance) will slow you down.

[Mark_R]

Hey
Leverage is a good idea
But the result depends on your strategy
5x is considered to be not an extremely risky leverage... 12x-20x are maximum recommended basically on Bitmex.

Good luck

[makvo]

Thanks for great answers everyone! I have a different small question and I see no sense in opening a new thread:

So I've been trading on bitmex as I wanted past few weeks and I am having great time but I have question on choosing leverage. I usually do 3x-10x depending on situation. But I want to ask about realizing the situation. First of all I do very short timeframe scalps, like literally making 0.5%-1% profit of my balance per trade. Lets say I do technical analysis and do some price action analysis and I believe lets say.. support is going to hold, and I buy support, and I believe resistance is pretty close in short timeframe so I analyze and say to myself: In coming 20-60 minutes (which is average length of my trades and where I feel most comfortable) I will have potential to see price go up (in this case) by only... 0.20%, as an example. Yes I usually aim for more price changes before closing position, but still.

So lets say price change I estimate will be 0.20-0.25 and my goal is to make 1%-1.5% of my balance (the more the better of course but dont wanna get greedy), does this thought process work?:

1) I do analysis and I estimate in next 10-30 minutes price will change by 0.20 percent if not more. I estimate most optimal exit would be lets say 0.25% move in my favour regardless if i short or long, which is yes, very low, but this is really what I like doing, tiny scalps.
2) Now, this is part I am wondering the most about: I CHOOSE LEVERAGE DEPENDING ON MY GOAL IN RELEVANCE WITH MY PLANNED EXIT. Which will still stay roughly x5-x10 because I don't like close liquidation. So lets say I want to make 1% of my balance and lets say I have 100 dollars of XBT on my account, I put in 50 dollars margin and use x10 leverage to make it 500 contracts. now if I understand right disregarding the fees, Doesn't this mean I will make 0.20 x 10 = 2% (2 USD profit for risking 50 usd margin) excluding fees if my trade is successful?
3) I usually never risk slightly more than 1% of my whole account, so I'll set SL to slightly below 2% / 10 (0.20%) against my trade, which makes it a 0.75% risk in case of half account margin. This is very tight from my understanding so I sometimes play around and pull around the stop loss to avoid getting stopped out for brief fluctuations in price that dont usually last.


Do I have this planned out well? anything wrong with my approach? any tips and advices? Thanks!!

[GreatArkansas]

So lets say price change I estimate will be 0.20-0.25 and my goal is to make 1%-1.5% of my balance (the more the better of course but dont wanna get greedy), does this thought process work?:
~.....
3) I usually never risk slightly more than 1% of my whole account, so I'll set SL to slightly below 2% / 10 (0.20%) against my trade, which makes it a 0.75% risk in case of half account margin.
~...

I'm a little bit confused, if you are targeting to make a 1%-1.5% of your balance, so on your every trade, you are trading you all entire balance, right?
If this so, as long as you have your always stop loss or you don't trade with multiple open positions at the time, it's still good and found out you do some scalping with lower time frames.

I like your risk management, it seems that you are not so greedy with every trade you do, just keep it up. My piece advice is much better if you will allocate some percentage(%) of your available balance for your every trade because what if you found some much better and smooth trade setup with other pairs? Since you already have an open position and your balance on that pair.

And about your stop loss, it is the stop market or stop limit? Just remember if you do stop-limit, it is prone to stop-slippage and when yo do stop-market, the fee is quite huge 

[makvo]

So lets say price change I estimate will be 0.20-0.25 and my goal is to make 1%-1.5% of my balance (the more the better of course but dont wanna get greedy), does this thought process work?:
~.....
3) I usually never risk slightly more than 1% of my whole account, so I'll set SL to slightly below 2% / 10 (0.20%) against my trade, which makes it a 0.75% risk in case of half account margin.
~...

I'm a little bit confused, if you are targeting to make a 1%-1.5% of your balance, so on your every trade, you are trading you all entire balance, right?
If this so, as long as you have your always stop loss or you don't trade with multiple open positions at the time, it's still good and found out you do some scalping with lower time frames.

I like your risk management, it seems that you are not so greedy with every trade you do, just keep it up. My piece advice is much better if you will allocate some percentage(%) of your available balance for your every trade because what if you found some much better and smooth trade setup with other pairs? Since you already have an open position and your balance on that pair.

And about your stop loss, it is the stop market or stop limit? Just remember if you do stop-limit, it is prone to stop-slippage and when yo do stop-market, the fee is quite huge 

It is stop market yes. I am scared of unreliability for stop limit.

And yes in my particular example provided in post I was talking about using 50% of balance

[beerlover]

I think more than these you gotta realize that leverages makes it very quick to liquidate and lose if you make x100 leverage and whatever you go down (ie; x50, x10) more chance for you to not lose all of your money all at once.

People look at margin trading and think that they can make x100 of what they normally can but they are forgetting that they can also lose all of their money in return as well. Lets say you wanna buy 1 bitcoin at 11 thousand dollars, if you normally buy and it goes up to 13 thousand you make 2 thousand profit and if it goes down to 9 thousand you lose 2 thousand, if you do leverage you either win 20 thousand dollars or you lose all your 11 thousand dollars, that is a huge risk to take and I don't know if anyone realizes this enough to risk all their money.

[leowonderful]

I think more than these you gotta realize that leverages makes it very quick to liquidate and lose if you make x100 leverage and whatever you go down (ie; x50, x10) more chance for you to not lose all of your money all at once.

People look at margin trading and think that they can make x100 of what they normally can but they are forgetting that they can also lose all of their money in return as well. Lets say you wanna buy 1 bitcoin at 11 thousand dollars, if you normally buy and it goes up to 13 thousand you make 2 thousand profit and if it goes down to 9 thousand you lose 2 thousand, if you do leverage you either win 20 thousand dollars or you lose all your 11 thousand dollars, that is a huge risk to take and I don't know if anyone realizes this enough to risk all their money.

100x is just gambling and you should never seriously consider using 100x if you're legitimately trying to trade. Even 25x leverage is pretty risky because your liquidation price is so close to your entry point, same goes for 10x, though if you're correctly sizing trades and setting stoplosses you should never be liquidated. Make sure your stops are market stops on Bitmex because the price can and will skip right over your limit stop, especially when the price action is strongly in one direction or another.

[Lanatsa]

1. Any of them, neither using leverage or just standard trading.All is profitable. and talking about probability? It does depend on how you do trade.
The only difference with higher leverage is that you do put up the risk on blowing your entire capital on faster phase than on traditional trade set ups.

2. I'm using MA,RSI and S&R.

3.You can do as you like if you do tend to compound or do put up fix positions.

4. Depends on your goal yet each of us do have targets either accumulating btc or fiat gains.

[GreatArkansas]

~....
And about your stop loss, it is the stop market or stop limit? Just remember if you do stop-limit, it is prone to stop-slippage and when yo do stop-market, the fee is quite huge 

It is stop market yes. I am scared of unreliability for stop limit.
And yes in my particular example provided in post I was talking about using 50% of balance

Good to hear that you are using stop market since it is much better especially for the flash dump or flash pump and to avoid liquidation too.
I'm not just fan of scalping but if you have time and patience, it's good to use 50% of your entire balance for every scalp trade.
In your experience, how many maximum trades you can do daily since you are doing scalp trading?

[The Cryptovator]

I am not fan of leverage trading and I have not tried to use it. That's why I will not encourage you for leverage trading if you are not enough experience. Few days back one of my online friend have tried leverage trade and he lost eventually. But interesting thing is I was tried to prevent him from leverage trade but he denied me. Because I know he had not enough knowledge of leverage trading and he just tried for greedy behaviour.

[jostorres]

I believe that you are aware that leverage trading is a very high risk trade and you have to ensure you trade with care and trade at minimal risk, if you are to start leveraging, never start with a high leverage, because to me, 5x or 10 x is still a little high for those that are just starting leveraging like yours because you should not expect not to make some losses, and if you leverage high before you become perfect with your trade, your losses could really be a terrible one, so best to trade is 2x for a start.

I think 30 minutes chart would be great to use, and also, there is no bad in compounding your interest to trade again, that is how you increase the quantity of your coin and make more profit. How can you know the realistic percentage gain when you did not give a clue to the amount you intend to invest with.

[davinchi]

First of all you should definitely test out the bitmex testnet, https://testnet.bitmex.com/ here.

They are literally giving you a chance to test how you would fair in a regular trading environment with leverage trading and see if you can actually do it or not. This doesn't mean that if you fail here you will fail in real trades or if you succeed here you will succeed in real but at least its much better than just hoping into real thing right away, if you do that there is a big chance you end up losing all your money hence this is where you sharpen your skills and see if you can understand it well enough to do it for real.

After that which leverage you will use is depending on how much money you have, x5 leverage of 100 dollars is not same as x5 leverage of 10k hence if you have less money to lose but want to make more money than higher leverage is better but if you have a lot of money then lower leverage is better.

[omonuyak]

I am not fan of leverage trading and I have not tried to use it. That's why I will not encourage you for leverage trading if you are not enough experience. Few days back one of my online friend have tried leverage trade and he lost eventually. But interesting thing is I was tried to prevent him from leverage trade but he denied me. Because I know he had not enough knowledge of leverage trading and he just tried for greedy behaviour.

leverage trading is the same as gambling and you should know that it is possible to have your entire account wipe out if you have no understand on how it work. I have been there before and lose all my investment in just a single order.

[Wind_FURY]

OP, I believe there is a high probability that everyone who replied to your questions, don't actually know themselves.

There's also a high probability you will lose 50% of the money that you started with by trading 5x leverage, day trading 5 minute charts.