Review

Category: CryptoCurrency

BitMEX: Complete Guide

Bitcoin Merchant Exchange, Bitmex, is one of the largest Bitcoin trading platforms registered in Seychelles.

With the daily trading volume that regularly exceeds $1 billion worth of Bitcoin, it’s in the top 3 crypto exchanges.

It’s currently unregulated in any jurisdiction which may be the reason why Bitmex doesn’t allow US citizens to register and use their platform.

As this article tends to encompass everything and give you a complete guide on how to start and trade on Bitmex, I suggest you use the table of content section below.

It helps you navigate easier through this article and get quicker the information you’re searching for.

Table of contents:

How to register on Bitmex?

The registration process doesn’t stand out from the others. 

It requires from you a valid e-mail address, password, country of residence, your first and last name. 

 

Make sure to choose a strong e-mail address and password.

You do not want to expose your money at risk using a password such as 12345678 or FirstName123. 

If you do not have a strong password, I suggest you generate one using Secure Password Generator.

To sign up, you need to be at least 18.

If you want to get a 10% discount on Bitmex trading fees for the first 6 months, register by clicking here.

Once the registration form is filled out, make sure to check your e-mail address.

There will be confirmation e-mail waiting for you to activate your Bitmex account.

If you do not have the Bitmex account, I advise you opening an account.

I’ll be putting a lot of direct links to certain features that are available only to the registered members.

How to secure your Bitmex account?

Once you’ve registered, it’s still too early to think of trading on Bitmex. 

You need to properly secure your Bitmex account so the funds will be as safe as possible. 

The first step to securing your Bitmex account is making sure that an e-mail you’ve used to register on Bitmex is secured. 

Even if your Bitmex account gets hacked, but you still have access to the e-mail, you can suspect any activity done by the hacker. 

Here is the link to the short guide on how to secure your e-mail address. 

Once you’ve secured the e-mail address, it’s time to secure your Bitmex account. 

The one thing that is more than enough to do is enabling Two-Factor authentication.

To enable Two-Factor authentication, login into your account, and go to Account section and then to My Account or click here.

 

 

Scroll down, and you will find option Enable Two-Factor authentication. (You will need Google Authentication App on your mobile phone)

This is what you can do to protect your account, but you may be wondering…

Is Bitmex exchange safe?

Since its opening back in 2014, Bitmex was never hacked. 

Employees individually check all withdrawals. 

Deposit addresses are externally verified to make sure they contain matching keys.

Bitmex never stores private keys in the cloud.

Bitmex has a system for risk checks, which requires the sum of all account holdings must be zero. 

If that’s not the case, trading is immediately stopped.

Considering all of this, Bitmex is a pretty safe exchange and your holdings shouldn’t be endangered. 

How to make a deposit to Bitmex?

You’ve successfully opened your Bitmex account, enabled Two-Factor authentication to secure your funds.

It’s time to learn how to deposit your first funds to Bitmex exchange.

Bitmex accepts Bitcoin deposits only.

It means all your results (winning/losing trades) will be expressed in Bitcoin regardless of whether or not the trade involves Bitcoin.

Bitmex exchange does not charge fees on deposits.

However, you will have to pay fees to the other exchange or wallet from where you are sending Bitcoin.

The minimum deposit is 0.0001 BTC, and it’s opened 24/7.

To make a deposit, login to your account, go to the Account section.

On the left top, you will find the Wallet section.

Click on the deposit in the wallet section or click here to get a direct link (you have to be logged in).

 

 

Next thing to do is to copy the Bitcoin address.

Make sure that you did it correctly otherwise if sent to the wrong address, you’re Bitcoins are lost forever.

The next step to do is to go to another exchange or the wallet where you have your Bitcoins and send them to Bitmex.

Usually, in 15-30 minutes, your coins will arrive in your Bitmex account from the time they are sent from exchange or wallet.

How to make a withdrawal from Bitmex?

Bitmex does not charge withdrawal fees.

But, you will pay certain fees for broadcasting your transaction to the Bitcoin network. 

While you can deposit to Bitmex 24/7, withdrawals are processed once per day. 

In our opinion, it’s worth waiting up to a day to get a withdrawal, considering all the checks they are doing to keep the funds safe.

At the moment of writing, all withdrawals are sent at 13:00 UTC.

What are the steps to request a withdrawal from Bitmex?

First thing you need to do is log in to your account and go to the Account section.

In the left top, you will notice the Wallet section.

Click on the Withdraw in the Wallet section or click here to get the direct link (you have to be logged in)

 

 

In the first field, you need to paste the Bitcoin wallet where you want to get withdrawal.

I suggest you requesting payment to the Bitcoin addresses of your online/offline wallets.

I don’t advise using the Bitcoin address from the other exchanges because some of them have a time limit.

In the second field type in the amount of Bitcoin you want to withdraw from your Bitmex account.

In the third field, select the fees for your transaction.

It’s not the fees you pay to Bitmex but the fees that will be deducted from your withdrawal amount for the transaction to be broadcasted to Bitcoin network.

It’s not fixed and depends on the current network conditions.

In the times it’s less crowded with the transactions, the fees will be lower.

On the other side, while the network is covered with a lot of unconfirmed transactions, the fees will be higher.

The higher fees you set, the faster you will get your payment because Bitcoin miners pick the transactions with higher fees first.

From the personal experience, it doesn’t take more than 12 hours to get a withdrawal from the time it was sent (13:00 UTC).

Since I’m requesting a lot of withdrawals, usually it was between 30 minutes up to 2 hours.

But as I said, it depends on the network conditions and saturation.

In the fourth field, you have an option to write a note for the transaction.

I’m usually not using this option if I do not have a reason for that.

The next thing for you to do is to click on the Submit button.

At that moment, there will be a pop-up that will ask from you 2FA code as the first layer of security.

This is the reason why your Two-Factor authentication MUST BE enabled.

The next layer of security is e-mail confirmation.

Make sure all the data (especially Bitcoin address) are correct and then if everything is alright, confirm the transaction.

Which cryptocurrency pairs are available on Bitmex?

Bitmex exchange is not like the other cryptocurrency exchanges that offer hundreds of cryptocurrency pairs and crosses.

At the moment of writing, there are “only” 10 pairs that are available on Bitmex:

  • XBTUSD ( Bitcoin Perpetual Contract)
  • XBTUSD ( XBTU19 – Bitcoin Futures Contract)
  • ETHUSD (Ethereum Perpetual Contract)
  • ETHBTC (ETHU19 – Ethereum Futures Contract)
  • LTCBTC (LTCU19 – Litecoin Futures Contract)
  • ADABTC (ADAU19 – Cardano Futures Contract)
  • BCHBTC (BCHU19 – Bitcoin Cash Futures Contract)
  • EOSBTC (EOSU19 – EOS Futures Contract)
  • TRXBTC (TRXU19 – Tron Futures Contract)
  • XRPBTC (XRPU19 – Ripple Futures Contract)

You may notice two groups of contracts, perpetual and futures

What is the difference between perpetual and futures contracts?

The main difference is in the duration of the contracts.

Futures contracts are limited to the specific time period (6 months).

Every six months, the old contract will be closed, and a new one will begin.

The current futures contracts on Bitmex ends on 27th September 2019.

What happens when futures contracts on Bitmex expire?

Your position will be closed, and you will get the PnL (Profit & Loss) at the time of expiration.

At the time of expiration, large price movements are possible because people are closing their positions.

It’s suggested to close your trades before expiration to avoid potential market volatility that may happen.

The perpetual contracts are not time-limited like futures contracts.

But, while that is an advantage, traders will be paying/receiving funding fees every 8 hours for holding perpetual contracts.

What are the funding fees on Bitmex?

The funding fees are the fees exchanged between longs and shorts over discrete intervals.

Since those fees are exchanged between longs and shorts, sometimes you will pay the funding, but sometimes you will receive funding.

It depends on the market conditions, and it changes as the market changes.

The fees are not fixed, and they may vary from 0.001% up to 0.20-0.30% at the times of high market volatility.

You will be paying/receiving funding fees for holding positions on XBTUSD and ETHUSD perpetual contracts.

Click on these two contracts if you want to check the funding fees for the current interval (you have to be logged in).

Which contract should you choose?

It all depends on your personal preferences.

Just make sure to avoid paying high funding fees when trading perpetual contracts and holding futures contracts that are close to expiration. 

More information on contact details you can find by clicking here.

(The link leads you to XBTUSD contracts details and if you want to check for other contracts, just change the contracts name in the link)

What are the trading fees on Bitmex?

While the majority of cryptocurrency exchanges have the same fees for the all cryptocurrency pairs and crosses, Bitmex is a little bit different.

Not only that there are different fees between different type of contracts (perpetual and futures), but fees differ on the types of orders as well (maker and taker).

One thing that is specific to Bitmex is the ability actually to make a profit from using particular order types.

What are the fees for perpetual contracts?

There are two perpetual contracts on Bitmex, XBTUSD and ETHUSD. 

There are two different fees you may pay, maker and taker fees. 

What are maker fees on Bitmex for perpetual contacts?

Maker fees are the ones you receive for adding liquidity in the market.

You add liquidity by placing an order in the order book below the current market price for long(buy) positions and above the current market price for short(sell) positions.  

You will receive 0.025% as a market maker. 

 

 

What are taker fees on Bitmex for perpetual contracts?

Taker fees are the ones you pay for taking the liquidity from the market.

There are two ways you can take liquidity from the market.

The first way is by using market orders that will be filled automatically at the current market price, and by doing that you will take the liquidity from the market.

The second way is by placing a limit order above the current market price for long positions or below market price for short positions.

It will have the same effect as the market order.

It takes liquidity from the market, and because of that, you will be paying taker fees.

You will pay 0.075% for being a market taker and taking the liquidity from the market.

What are the fees for futures contracts?

Same as for perpetual contracts, there are two types of fees you may pay, maker fees and taker fees. 

What are the maker fees on Bitmex for futures contacts?

For adding liquidity in the market and being a market maker, you will receive maker fees that are 0.05%. 

 

What are the taker fees on Bitmex for futures contracts?

For taking the liquidity from the market, you will pay 0.25% taker fees.

 

 

To get all details about the fees on Bitmex, click here.

What are the order types on Bitmex?

There are several order types on Bitmex that give you various ways of entering or exiting a trade. 

  • Limit order – A limit order is an order to buy or sell at the desired market price. If you place a limit order below the current market price for long positions or above the current market price for sell positions, you will be a market maker and receive fees.
  • Market order – A market order is the fastest way to enter or exit the market, which will be filled automatically at the current or worse market price. By using a market order, you will take the liquidity from the market and pay the taker fees.
  • Stop Market Order – A stop order doesn’t enter the order book until a market reaches a specific price. There are two reasons we use a stop order:
    1) To limit our losses on open trades
    2) As a self-executing order to enter the market at the desired point.
    A stop order will become a market order when the stop price is reached.
  • Stop Limit – A stop limit order is similar to stop order but allows you to set the price of the order once stop price is reached. In the times of high volatility, a stop limit order may be missed and your position may remain open. That’s the reason I do not suggest using stop limit order. Even though you will pay taker fees using stop market order, it’s way better compared to what may happen if your stop limit order doesn’t trigger.
  • Trailing Stop – A trailing stop it’s similar to a Stop Market order, but here users set a trailing value that is used to place the market order.
  • Take Profit Limit Order – A take profit limit order is similar to a Stop Order and can be used to set a target price on a position. In this case, it’s in respect to making gains, rather than cutting losses.
  • Take Profit Market Order – A take profit market order is the same as the previous type, but in this case, the order triggered will be a market order, and not a limit one.

Which one of these should you use?

They all have pros and cons, but it’s suggested to use limit order for entering the market, stop market order for setting up a stop loss.

For taking up the profit, you can choose between limit order, market order, take profit limit order or take profit market order.

How to open a trade on Bitmex?

Now when the account is secured, funds are deposited, you learned all you need to know about all the types of orders and fees, you will learn how to open a trade.

This guide helps you learn the right way of opening a trade.

It does not give you tips on which strategy to use.

It’s up to you which trades are you going to take.

But, if you want to learn how to build a trading strategy, you can check our guide on How to build a trading strategy.

It also contains two trading strategies as a bonus.

I assume you found the setup, everything is ready, and you need to open a trade.

Before opening a trade, you need to predefine your stop loss price, target price, and entry price.

You also need to calculate the position size on your trade, potential win, potential loss, risk reward, required leverage.

If you fail to plan, you plan to fail.

If you need help calculating any of these above, feel free to use our position size calculator that does all of that for you.

As I mentioned above in the guide, it’s suggested to enter the trades with a limit order.

There are two reasons for that:

  • You will enter a trade at the desired price
  • You will receive a maker fees

Paying high taker fees can seriously affect your trading results, especially if you are day trader that trades a lot.

Try to avoid using market orders as much as you can, and the entry point is a situation you can do because your money is not in danger.

How to place an entry order on Bitmex?

  1. Select Limit order in the top left corner. 
  2. Type in the quantity 
  3. Type in the entry price
  4. Place an order

For long(buy) positions, entry price has to be below the current market price. If you are opening a long position, to place an order, you have to click on Buy/Long.

For short(sell) positions, entry price has to be above the current market price. If you are opening a short position, to place an order, you have to click on Sell/Short.

Once you do that, you wait for the market price to fill out your order.

Even though I’m not suggesting opening with a market order, you can do it by selecting Market order, typing in quantity, and selecting the desired type of trade (long or short).

Once you place an order, it will be filled out automatically at the current market price.

The cons of using this type of order are because you will be paying taker fees and having an entry point that is usually worse than the one you typed in.

The advantage of using market order is that you will enter the trade while when using a limit order, you need to wait for the price to come and fill out your order.

In some cases, it won’t happen, and you’ll miss the trade.

Once you are in the trade, place a stop loss immediately.

There is an old saying that says: Those who trade without stops, eventually stop trading.

Don’t be one of them and always use a stop loss that will protect your capital for further loss once your trade setup was invalidated.

Which type of order to use as a stop loss order?

One and only, stop market order.

When your setup is proven to be wrong, the only thing you want is to exit your trade.

You don’t care if you will pay taker fees.

You want to be out of the trade and that’s why you need to use stop market order that will close your position once it’s triggered.

How to place stop market order on Bitmex?

  1. Select Stop Market order in the top left corner. 
  2. Type in the quantity
  3. Type in the stop loss price
  4. Place an order

For example, you have 1000 contracts long on XBTUSD perpetual contract. You can place stop loss order at a certain price for 500 contracts and another price for the other 500 contracts.

For long(buy) positions, your stop loss price has to be below the entry price. To place a stop loss order for a long position, you need to click on Set Sell Stop.

If stop loss price gets reached, it will sell your long position and your long trade will be closed.

For short(sell) positions, your stop loss price has to be above the entry price. To place a stop loss order for a short position, you need to click on Set Buy Stop.

If stop loss price gets reached, it will buy your short position and your short position will be closed.

You stop loss order has to be active as long as your trade is active.

Once the trade is closed, you can delete your stop loss orders.

How to book profit on your trade on Bitmex?

While I gave you a suggestion for entry and stop loss order, I’ll let you decide which order to use to book or close your trade if it goes in profit.

You can choose between limit order, market order, take profit limit order or take profit market order.

I would suggest you choose between the first two with the suggestion to select limit order.

If you are in a long position, you need to open a short position with equal position size to close that long position.

Same goes around for short position which required from you opening long position of equal size for it to be closed.

Is Bitmex for beginners?

No, it’s not for beginners.

To be qualified to trade on Bitmex you need one of these two things:

  • Experience from the non-leverage exchanges (Binance, Kraken, Bitfinex…)
  • Experience from the Forex market

If you do not have one of these two, trading on Bitmex may be too risky for you.

If you have either decent success on exchanges such as Binance, Kraken, Bitfinex or from the Forex market, you are “qualified” to trade on Bitmex.

Why is it suggested not to trade on Bitmex if you are a beginner?

Because trading in leverage market is not a joke and it requires knowledge and experience.

Otherwise, you can vanish from the market very quickly.

What is leverage trading?

This can be explained using finance language that would barely anyone understand.

That’s why I’m going to do it using as fewer jargons as possible.

The leverage trading allows you trading with borrowed money.

You are not actually borrowing money because it’s done automatically, but you are trading with the money that belongs to investors.

Bitmex offers leverage up to 100x. 

You can borrow up to 100 times the amount you have on the exchange.

If you have 1 BTC, you can open a trade with as many as 100 Bitcoins.

The more you borrow, the bigger leverage you use, the smaller move is required to liquidate your entire account.

You can calculate the required leverage on your trade using leverage calculator.

If you follow all the risk management rules, your leverage shouldn’t exceed more than 10x.

Even that is considered extremely risky.

If the trade goes in the wrong direction and your entire account is liquidated, do not deposit money to that account again.

You will have extra fees unpaid, and because of that you shouldn’t deposit new money to that account but make the new one.

How to set leverage on Bitmex?

Go to Trade section on your account and on the left, you will see a section where you can set the leverage for your trade.

 

 

As shown in the photo, click on the small icon and type in any leverage you want.

After that, click on the green tick, and your leverage will be set.

Conclusion

Bitmex offers a lot of opportunities that are followed by the risk.

Be wise and utilize the given opportunities but always keep in mind that protecting your capital is your number one goal.

If you need complete trading, you can check guide on How to build a trading plan that should help you build one for yourself.

If you need the calculator to calculate position size for your trade, potential win or loss, risk reward, required leverage, and much more, feel free to use our position size calculator.

Check out amazing article on How to become a successful trader if you want a more in-depth guide.

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