A quick beginners guide to leverage trading Bitcoin on BitMEX.
Maybe you’re here reading about Bitcoin and how to make money with it because you heard someone talk about it, or keep seeing it in the news. You’re doing the right thing by researching what it’s all about and how you might profit from trading Bitcoin.
The most popular cryptocurrency trading exchange is BitMEX,
First off though, let’s start with a warning. You can lose all your money trading Bitcoin, especially using high leverage margin trading with little knowledge or guidance.
There may be some terms here that you do not understand, so be sure to check out the common terminology here.
So, how do people make money trading Bitcoin on BitMEX?
In this article, we will be referencing to Bitcoin Perpetual Contracts, as this is the most popular cryptocurrency traded on BitMEX. It is important to note that you are not actually buying or selling Bitcoin, rather you are entering a speculative trade (long or short), betting that the price of Bitcoin will go up or down.
The primary holding on BitMEX is XBT, which correlates to BTC (Bitcoin) Perpetual Swaps Contract. Your account in XBT is equal to the same value in BTC. Each contract that you buy or sell is equal to USD$1.
So, why not just buy or sell Bitcoin?
Why are we using BitMEX leverage trading?
Leverage trading Bitcoin allows you to buy/sell a larger contract value than you have available in your account. What’s the catch? It’s risky, you may lose some or all of your account balance. That’s why you could consider it gambling if you do not practice proper risk management and trading discipline, and not risking any more than you are comfortable to lose.
However, with technical analysis, fundamental analysis, and market knowledge it is possible to increase your crypto account balance significantly. The amount of your Bitcoin account and the leverage you use should be calculated in your risk management.
We’ll go through this more, with examples later.
If you don’t know what you stand to lose (risk) and how to minimise this,
you should not enter that trade.
Find out what the most common mistakes are when trading Bitcoin with leverage on BitMEX.