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How Does Margin Trading on BitMEX Work?

Depending on which market, BitMEX offers a flexible leverage of up to 100x for Bitcoin markets and up to 33x for Altcoin markets. But that doesn’t mean that you should use the maximum available leverage, and in fact, you shouldn’t unless you really know what you are doing!

For BitMEX, like most Bitcoin and cryptocurrency exchanges, there is no need to go through KYC/AML document submission and approval process, and you can start trading immediately just by signing up and funding your account!

After you set up your account, the first thing you should do is to keep Kour Account Secure.

Right at the top, you can find the ticker symbols of all the available markets. Clicking on the symbols on the left will toggle between showing the market data of the relevant market, namely current trading price and 24h % gain/loss.

You can find a row of markets and their associated tickers in this section. Clicking on each of the markets will load the relevant market information as below.

Here you will be able to see information about the contract

Trade, Account, Contracts, References, API

You can view your balance at the top right.

You may access your account information by clicking on your username at the top right, where you can change your currency denomination display, color theme, dashboard layout, and access other account/security and site preference settings.

Alternatively, you can also click on “Account” in the dashboard tabs section to access your account settings.

This is where you place your orders by inputting the quantity, price, and other parameters where required.

Here you can see the overview of your open positions, including the number of contracts, entry price, Return on Equity (ROE), liquidation price, and leverage used. You are also able to adjust the leverage used in your open position.

Active orders and open positions will appear in this section. It also shows a history of your orders and fills.

Now that you are familiar with how to navigate BitMEX’s platform, let’s move on to the various order types, placing an order, and get to the actual trading proper! Click on the image below to view it in full size.

Again, for easy reference, We split the 7 available order types into 3 Groups:
A) Market & Limit Orders
B) Stop Orders
C) Take Profit Orders

Let’s go into more detail for each order type below.

Market and Limit orders are the most common types of orders used by traders to enter into a trade/position. These orders are immediately entered into the order book once opened.

Straightforward. Buys/sells at the nearest available price.

After clicking Buy or Sell, there will be a confirmation page, where you can adjust your desired leverage for the trade.

Next most commonly used order would be the Limit Order, which basically allows you to place a buy/sell at your desired price.

Similarly, there is a confirmation page where you adjust your desired leverage for the trade.

Stop orders, unlike market or limit orders, do not appear on the order book immediately upon opening. These orders are associated with a trigger price, or “Stop Price” in the case of BitMEX, whereby your order is only entered into the order book after the stop price is hit. Stop orders are usually used as “Stop Losses” to get out of a bad trade, but are also extremely effective in buying into breakouts.

A Stop Market Order is a market order that is triggered (opens) when your stop price is hit.

For example, if today’s BTC price is $7000, and you place a stop market buy order at $7500, your position will not trigger if price trades anywhere below $7499. Once a trade occurs on the market at $7500, your stop market buy order will trigger and a market buy is made.

In the same way that a market order differs from a limit order, a Stop Limit Order works in the same way as a Stop Market Order, except with an additional “Limit Price” parameter that is triggered only when your stop price is hit.

Further to the example above, if you enter $7000 as the stop price, and $6500 as the limit price, and when a trade occurs on the market at $7000, a limit order at $6500 will be placed.

Alternatively, if you enter $7000 as the stop price, and $7050 as the limit price, this will act almost like a market buy when your trade is triggered (unless there are not enough sells for your purchase quantity up to the limit price — in which case you need to increase the limit price or simply use a stop market order).

Instead of setting a stop price, a Trailing Stop Order makes use of a “Trail Value” parameter to determine when a market order gets triggered. This “Trail Value” is calculated against the market’s price at which you entered the position.

For example, if BTC price is $7050 and we have an active buy position, and we open a Trailing Stop Order by entering a “Trail Value” of $5, our active buy position will close when price goes to $7000. Whereas if BTC price is $7000, opening the same trailing stop order will close ouractive buy position when price goes to $6995.

Take Profit Orders, as the name suggests, enables you to set a target price on an existing open position to close it and “take profit”. This can be done in the form of a market order or limit order.

It simply works in the same way as placing a limit order in the opposite direction of your active position (i.e. placing a limit sell order if you have an active buy position).

See below for a closer look at the Take Profit Market Order and Take Profit Limit Orde

Upon placing your order or if you have any open positions, you can view and manage them in the middle bottom section of the trading dashboard. You can also view your order history, fills, and closed positions in this section.

Once you place a limit order (and it doesn’t immediately trigger), they will appear in this “Active Orders” tab. You can edit the quantity and price while the order is still open, although you can’t change a buy into a sell.

Stop orders and take profit orders will appear in the “Stops” tab.

Once your active order triggers, or when you place a market order, they will appear here in “Positions”. You are able to add/remove margin to your position, which changes the liquidation price of your position, as well as to easily place a limit or market order to close your position instead of having to place the order through the “Place Order” section.

If you want to change your leverage used on a particular position, you can adjust it with the slider on the left side of your dashboard, just below the “Place Order” section

Active stop orders and take profit orders will appear here in the “Stops” tab. You can also edit some parameters, including the quantity, stop price, and limit price, as well as cancel the order.

Lastly, you will be able to view all your order history, executed or not, in this “Order History” tab. You can then find all your filled order history in the “Fills” tab, and “Closed Positions” in the corresponding tab.

Bitmex has their own library of guides and tips on trading on their platform, which cover an extensive range of topics.

Take a look at these links to learn more about the BitMEX platform:

They also have in-depth information about how their platform differs from competitors, for various parameters including liquidation events, contract loss mechanisms, max leverage, initial margin, maintenance margin, settlement mechanisms, minimum contract sizes, and many more!

Hope that this post gives you a good overview of how to use BitMEX trading exchange platform to view markets, open orders, enter into positions, as well as teach you how to use each of the different order types.

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