If you’ve been thinking of Bitmex trading and need help with optimizing and getting the most out of your trades, this article is going to help you do just that.
Bitmex trading is often high risk and requires the ability to be both patient and swift when there’s need for it. Traders who enjoy consistent wins often have strategies and techniques that help and keep them winning.
Of course, there may be the occasional loss –after all, nothing is perfect. But, if you have the right strategies, losses will be minimal and profits, more frequent.
6 Smart Strategy Bitmex Trading Tips
That said, let’s jump right in to the tips that can help you win big and make a lot of money from this.
Be A Market Maker
While Bitmex can be a great trading platform, we have observed that there are price and market movements that are only unique to the platform. This means that unlike other platforms that tend to have relatively uniform price movements, Bitmex doesn’t.
This means that there’s a slight chance that you might be at risk of falling victim to frequent episodes of false breakouts and exaggerated wicks. You need to be careful about this. Therefore, avoid getting into an unplanned trade using a market order.
This can cost you a sizable chunk of your capital if you’re not careful. Take advantage of previous trades and study their patterns. This will give you an insight into how the market performs on the platform. Avoid being subject to the market’s price.
Many traders make the mistake of seeing an “opportunity” only to jump in and find that the price point has shifted and they are in at a price that’s higher than their intended price.
As much as possible, determine your entry price and become a market maker in the process. This will not only keep you going during those dips, but will put you in an even keeled state of mind while trading.
Check Out Price Charts From Other Exchanges
Don’t buy or sell in a vacuum, using just Bitmex’s prices as an indicator. Depending on Bitmex’s price charts can cost you a lot of money. This is why we recommend that you always compare the prices of trading pairs on Bitmex, with that of at least one more exchange.
While there are many, we think Bitfinex still has one of the more reliable market prices. Oh, and they tend to have a lot of whales, market makers and high volume traders. So, whatever prices you find there, chances are they are the standard market prices.
Take Advantage Of Leverages
Smart traders understand the importance of leverages. Bitmex allows traders the benefit of leveraging up to 100x of their capital, which means you can easily make your trading capital multiple times over if you get in at the right time.
But, this is not without its risks too. Losses of that magnitude can easily wipe out your capital if you’re not careful. If you’re a beginner traders, you might want to avoid leverages that high. Settle for something more suited to your psychological and emotional tolerance.
To be honest, leverages of a 100x are more for seasoned and pro traders who know what they’re doing and are capable of tolerating losses. And if you’re thinking that a stop-loss order can prevent you from taking huge losses, think again.
The internet is awash with claims of people who say Bitmex’s stop-loss doesn’t work sometimes. Whatever the case, only use leverages when you’re sure the market will be in your favor. Remember that Bitmex’s wicks and prices can be different from the going market rates. Used correctly, you can easily multiple your capital.
Avoid Loss Chasing
While this may not be unique to Bitmex alone, it is just as important. One of the fastest ways to lose your capital when trading cryptos on the Bitmex platform is by chasing your losses. This is dangerous because it puts you in an emotionally vulnerable place.
You’ll end up making bad emotional decisions that will further result in more losses in the bid to recoup your lost capital. Understand that when it comes to crypto trading, profits and losses are a common phenomenon.
Your trades should be executed from a place of calm logic and analysis. If you trade emotionally, you are bound to make poor judgment calls and lose more capital. What we recommend is that you close your trades and walk away after two consecutive losses.
Go do something else, clear your head, take a long walk, maybe even take a break for the rest of the day, and come back when you’re calm, focused and rational.
No matter how attractive the market or price movements are, never chase your losses. You will end up compounding your losses. If you need to learn how to manage your emotions in crypto trading, go read the book Axioms of Zurich as well as other emotional management books for traders. You’ll find a lot of practical tips that will help you stay sane and maintain an even keel while trading.
Take Advantage Of Staggered Or Split Orders
While the Bitmex candles can have inaccurate wicks, these same wicks can make you decent money if you know how to use them to your advantage. Many traders have used this tactic on the platform with good success rates.
To do this, you would need to split your capital into multiple parts before entering the trade. For instance, instead of just entering the market at $6,500 for 1 BTC, you can easily split the bitcoin into three parts of 0.33 BTC and then place the orders at $6,500, $6,450 and $6,400. This guarantees you a better entry opportunity and can prove highly effective in giving you even better returns.
Utilize Stop Loss
Stop loss can often be effective if your leverage isn’t too high. All smart crypto traders understand the importance of stop loss and frequently utilize it to help them prevent unnecessary losses. No matter how smart or seasoned you are, a stop loss can often be the difference between staying afloat and losing all your capital.
So, pay attention to it and learn how to set it up correctly. The good news is you can always set it before entering any trade, just make sure to use the “Close on Trigger” option next to the stop loss.
There’s also another feature that you can use to further curtail your losses. This is called the Trailing Stop. This is usually represented by setting a gap between your current trading position and the stop loss that you’ve set up. This is great for whenever you expect quick price fluctuations and can be handy for scalping.
Bitmex Trading Tips Conclusion
While these tips are by no means exhaustive, they will get you started on the path to experiencing incredible trading success on the Bitmex platform.