Bitmex/Derebit Tips - How to not lose your house and maybe even make some money

I’ve had a ridiculous experience with Bitmex/leveraged trading, both fun and depressing, but I think I’m finally getting a grip on it, so I wanted to share some things I’ve 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 I’m an idiot. Since then however, I’ve taken .06 BTC and I’m 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.

Note, with Bitmex's crackdown on US users, I've begun using Deribit primarily. It has lower fees and doesn't have the system overload issues. If you're outside the US, I'd still probably use Bitmex, but Derebit is a bit more lax if you just use a VPN it seems.

If you've never used Bitmex before, you can read my original newbie guide on how to start using Bitmex here: https://bitcointalk.org/index.php?topic=4319995.0

Also a reminder, you get 10% off fees if you sign up with a referral code on either site. If you already signed up and didn’t 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: https://www.bitmex.com/register/astVxa and https://www.deribit.com/reg-4025.4455

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 you’re cross or 100x, you’d 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, there’s 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 isn’t 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 it’s worth it to pay the fee just for the price bump afterwards, but I’d honestly recommend just having no position if there’s a massive funding fee coming up. Note, on Derebit, funding is continuously calculated rather than in 8 hour windows, so the idea of a pump/dump for funding is minimized, but you still need to be aware of it.
4. DCA and Small loss vs Big one: There’s 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. That’s nearly a 300% loss. Adding at stoploss at let’s 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 you’re going to handle it. I’ve 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 it’s 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, it’s too late and you’ll likely be stuck with a terrible entry as it’s 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. On Derebit, this is much less of an issue.
6.Signals: You should learn how to do your own TA, but there’s also lots of Twitter guys/Discord groups that provide signals. One thing you’ll find is they never agree on anything. Don’t trust any single person because every single one will brag about how much money they’re making, but they can and will be wrong. Use them as guidelines, but not gospel