Bitmex Leverage trading. Grow your profits to 10x, 100x and even 1000x. I am not talking about trading shitcoins you can do all of this leverage trading. How to do leverage trading? What is leverage trading? Should we do leverage trading? How to find good entries in Bitcoin leverage trading? Answer of all these questions you will find in the post.
Bitmex Leverage Trading – A Quick Guide
- 1 What is Leverage trading?
- 2 How to Start Bitmex Leverage Trading on Bitcoin?
- 3 How Does Bitmex Leverage Works?
- 4 How to Trade on Leverage – A Quick Guide
- 5 My Idea on Leverage Trading
What is Leverage trading?
Leverage trading is the trade by which you can increase the size of your trade by a credit from broker. This would get be more simplified by this example.
Let’s start with a simple example There are two friends Adam and Ben who were searching house in New York. Both had a budget of 10,000$. Both Adam and Ben did house hunting.
Adam found a house worth 100,000$. He apply a loan from bank for this purpose. Bank takes 10% of it as security amount, which is 10,000$ and granted loan for it. Adam bought the house. Whereas Ben did not want to take Bank loan and he did found a small house for 10,000$.
After one year the real estate market went up by 50%, Adam sold his house and get 150,000$. He gave back 100,000$ to bank and get a profit of 50,000$. Whereas Ben also did sell his house for 15,000$ and took 5,000$ profit on his initial investment.
What Adam does was leverage, He did get a loan of 100,000$ with his 10,000$ and get a profit of 50,000$ after one year. and Ben did go with his initial investment of 10,000$ and get a profit of 5,000$ only.
So, leverage helps you to trade with more capital than you have. In Trading the leverage is given by brokers like Bitmex Exchange. So, think if you had bought Bitcoin at 1,000$ at a leverage of 10x from a broker and sold it at 1500$. Then you would be getting around 50,000$ profit instead of 500$. But why would Bitmex or any other broker would risk his money? You would find it here.
Why does Brokers or Bitmex Exchange Risk Their Money in Leverage?
So, you would be thinking that with 10x leverage broker is giving you opportunity to trade for 10x of your investment. So, if you had 1000$ you can now trade with 10,000$ with 10x leverage from broker. Isn’t they are taking all the risk by giving you extra 9000$ for your trading. Why would they give you such money for trading. Here is the answer.
The answer is No, They are at no risk with leverage or giving you their money, But How? Brokers or exchanges did earn by trading commissions which they get from your buy and sell orders. So, by giving you 10x leverage on your trades they are also making their trading commissions going up by 10x. e.g. If they are taking 1$ for your 1000$ trade now they would take 10$ for the same trade with 10x leverage. It’s a Win-Win situation for both. You get higher profits for your trades and they took higher commissions.
And why would they risk their money. They didn’t risk their money instead they did give you margin calls when your losses are about 90% of your investment (around 900$ here). Whenever your losses hit this limit they would close your order and take their money back. So, You need to take extra care, where are you investing. Leverage rate is always based on the volatility of the market. Generally, forex markets does allow you to get 10x of leverage and in currency markets you can get at about 100x leverage. Bitmex Exchange is one the cryptocurrency exchanges which offers you leverage in Bitcoin and other cryptocurrency leverage trading.
How to Start Bitmex Leverage Trading on Bitcoin?
How to Open Trading Account at Bitmex
1. You can join Bitmex by register through this link Click here
2. I would always recommend you to check and exchange URL before registering or login. There are lots of imposters nowadays which would steal your credentials and can misuse them.
3. Enter your email, full name, country of residence and password.
4. Slide the CAPTCHA to right for verification and mark the terms and condition box.
5. Click on register and now you had signed up an account at Bitmex.
6. You would get and email in your registered email-id, Click on it to verify your account and now you can trade on Bitmex.
How to Add Google Authenticator to Bitmex Account
7. For extra protection I would recommend you to turn on Google Authenticator.
8. You could find this under account tab, Click on security option and choose Google authenticator as security option.
9. Open google authenticator app and scan the QR code. enter your one time password in the place and click on verify.
10. Click on validate and submit and now your google authenticator is added to your account as an extra layer of security.
How Does Bitmex Leverage Works?
You can do leverage trading on Bitmex. The Leverage on Bitcoin is upto 100x, This mean if you deposit 0.01 BTC you can trade for 1 BTC. You can also trade on other cryptocurrencies these are Neo, Bitcoin Cash, Cardano, Litecoin, Ethereum Classic, Dash, Monero, Ripple, Ethereum, Stellar, Zcash. Although the leverage rates and trading fees are different for each of the cryptocurrency. These are given Below as
|Cryptocurrency||Leverage||Maker Fee||Taker Fee||Settlement Fee|
Settlement fee would be charged at the time of settlement. When either there is a margin call or your leverage period ends. In above chart negative fee indicates trader would get a rebate for his trade. and then the settlement fee would be charged. There is also a perpetual leverage on Bitcoin which you can use. As the leverage is perpetual so in this case no settlement fee would be charged for this.
How to Trade on Leverage – A Quick Guide
Make Deposit to Bitmex
1. Login into your Bitmex account Click here
2. Make your deposit.
3. To do this go to account section and click on deposit.
4. You would get your deposit address, use this address for your deposits.
5. Deposit would be done after one confirmation by the blockchain.
Make Leverage Order on Bitmex
6. Once your deposit get confirmed you can start making your leverage order.
7. Go to Trade section, In the left hand side.
8. Put quantity, Limit price (At price you want to buy) and click on Buy to make your order.
💡 you can always follow the order charts for limit price
9. Then choose leverage rate and confirm your order.
10. When your order gets confirmed you can see it under positions and you can take a look at your unrealized profit and loss.
How to Close Position on Your Order at Bitmex Leverage Trade
11. Just enter quantity, Limit price and click on sell to close your position at current trade.
12. Click on confirm and then your order for close your trade would be done.
13. Once it gets filled you can see your realised profit or loss under closed position tab.
My Idea on Leverage Trading
Leverage trading does sound astonishing, You can trade with 100x leverage. Which means 100x the capital than you had. But there is also a downside, there are also chances of liquidation of all of your funds. Whereas an experience trader can get his profit multiplied by several times. But also the losses on the same is multiplied by several times. I would recommend to start with low volatile currencies at first and choose only adequate leverage rate for your trades. Anyhow it’s purely your choice. New traders may be get excited by leverage trading and can liquidate their whole money. Be extra cautious whenever you are doing leverage trading. Whereas the profit get increased but the risk profile also gets increased on the leverage. So, Be cautious and happy trading.
There are some rules you can apply to get maximized profits
- Follow top and great traders (You can follow them on twitter, telegram, tradingview)
- Buy The Dip, Trade when it’s in the dip
- Make semi permanent long positions
- Close position fast after taking profits
- Follow Mayer multiple buy when mayer multiple is less than it’s mean <1.5 and short when it’s >3.6
You can write your ideas and questions on leverage trading in this post.