BitMex Leverage Trading — Using Time Indicators & Moving Averages

This is high risk, high reward game and I do not recommend this kind of trading for the fainted heart. You can lose all your holdings trading on BitMEX

To start off Register on BitMEX — Direct Link (Referral Link, support me)

Basics at BitMex

You need to understand that the primary holding on BitMex is Bitcoin which is called at XBT on BitMex. You will not be using any Fiat currency and all deposit and withdrawals will be XBT

Why XBT? — To differentiate between BTC & XBT, because most of the trades on BitMex are 100% speculative hoping for a gain/loss in the coming time frames.

You are not actually buying or selling bitcoin, you are betting on it with your capital deposited.

Terminology

• Long — Buying now hoping to sell in the future at a greater price
• Short — Selling now hoping to buy in the future at a lower Price
• Stop-Limit — Setting a break-out point for your Long/Short
• Contracts — An agreement between trader & BitMex
• Position — If a Long / Short is opened its considered as a position
• Quantity — Amount to be opened in USD against the XBT Price
• Leverage — It’s more than 1 line to continue to read below
• ROE — Return On Equity i.e. BTC

FAQ - BitMEX

Long/Short

Long/Short are the most common term used when we are thinking the price will move up or down and you buy/sell accordingly. Now how do you open a long/short? If you have checked my previous article on how to use Tradeview.com and Indicators for free Account using TBX Indicators

Before we open a Long/Short you have to make a decision which Chart you are going to trade based upon. Usually the rule is 2 Time frames less of the Chart you are going to trade. Below are few Examples

1. 1D Chart — Need to study 4Hr, 1Hr Charts
2. 4Hr Chart — Need to study 1Hr, 15Min Charts
3. 1Hr Chart — Need to study 15Min, 5Min Charts

After choosing the Chart to trade you need to study using the indicators. Please note that do not take it for granted that what ever these Indicators show you are still responsible for the trades you make and make them carefully.

Moving Average [MA]

The most simplest and basic trading guide is by using the Moving average lines to open a Long/Short trade using the MA Crossover Strategy where

— Bullish Trade if a smaller time frame line crosses upwards a bigger time frame line (e.g) 20MA cross upwards breaking 100MA.

— Bearish Trade if a bigger time frame line cross upwards a smaller time frame line (e.g) 200MA cross upwards breaking 20MA.

If you are using one of ThaiSignal TBX Indicators the cross-overs will be clearly marked with a background line in Red(Short) or Green(Long) like in the image below

• Green Line — 20 Day Moving Average
• Yellow Line — 50 Day Moving Average
• Red Line — 100 Day Moving Average
• Blue Line — 200 Day Moving Average

4HR BTCUSD — Green dots represent Bullish trade & Red dots Bearish Trade

Demark Time Indicator [TD]

This is a method you would have seen used by famous Youtuber and Crypto Analyst Tone Vays. In fact this Indicator is worth 0.01BTC if you get it from Tone.

This indicator is made up of

— Buy/Sell Setup Countdown [9] Top of the candles

This is the setup countdown to make a speculative entry into a long/short trade. Red marks Short(Sell) and Green marks Long(Buy). This Countdown will run from 1–9 which is called a Perfect Countdown, if not completed its called a Pre-Mature Countdown. To enter this trades we need to have the 2 candle to trade above/below the 1 candle accordingly to make our trade entry. This is highly speculative and you need to study the charts time frames corresponding to the chart you are going to trade. Most 5Min charts will not have a Perfect Countdown. Below are example of entries mentioned with a Black Line

Long (Buy) Entry Setup Countdown

Short (Sell) Entry Setup Countdown

If you have noticed the Pre-Mature and Failed Countdowns have some thing in common.

• There will be resistance/support by the Moving Average Lines. That is why you will need both of this indicators to trade correctly.
• You would have made a wrong entry into the 1Hr Chart without checking the 15Min Chart.
• Did not take The Buy/Sell Countdown [13] into account

— Buy/Sell Countdown [13] Bottom of the candles

This countdown will be quite difficult to understand, as the numbers will show up at odd times. They run from 1–13 below the chart in smaller size and will be prominent with their showcase of 13 🢃 🢁 which are classified into A13 (Agressive) and C13 (Combo)

Sometimes the 13 Countdown will not always run in every candles and some might have 4–5 candles apart before the next number shows. This bottom numbers are long term numbers showing you a bigger picture what the market is actually going through currently and will not flip color as frequent as 9 Countdowns.

• A13 🢁🢃 will show up before the bottom countdown reached 13 as a warning to the trader that there is an upcoming price drop is coming and we need to be cautious and exit our longs(Buy)

A perfect 13 in action.

• C13 🢁🢃 will show up only when there is a 9–13–9 Combo trade that you have entered earlier in the trade. (Need High level Trading Experience) For easy understanding if the arrow points up/down the price will move accordingly.

First Red Down is Perfected 1–9 Sell Countdown , Middle is Pre-Mature stop at 7 because of 50MA resistance & 3 complete 1–9 Buy Countdown

Stop-Limit

Stop-loss is extremely important for leverage trading to it can help you cover you if you have made a wrong entry with minimal loss. A simple-Limit can be determined using the Average True Range [ATR] Indicator in TradingView.com. When selected it will give another smaller chart frame in your tradingview Chart Sheet in the bottom or top. Move the cursor to the current time and you will be give the value. Note that you should use the ATR as per the chart you are going to trade on and I recommend adding another 10–30% more due to high fluctuation in Crypto markets.

• There is also Dynamic Stop-Limit [DynSL] which is for experienced traders.
• At entry of trade Stop-Limit will be above/below your entry but as you have made the correct entry I will recommend you to move your stop-limit into a profitable stop so you will not loose a winning trade.
• Limit/Stop Price — Is used when you are trading in huge amounts where you can set a range of price to protect your stop-loss value without being fullfilled. Limit Price is the entry Price which the Stop-Loss will be triggered. Stop Price is the last price which you are ready to close your Positions at.

ATR Value will be shown in the top left corner of the chart.

Contracts

A pop-up giving contract details before a trade is confirmed on BitMex

When you are placing a Long/Short you will be shown the above Pop-up which will give you the details about your contract with BitMex and I recommend you NOT TO TICK “Don’t Show Again” Here you will be shown your liquidation price of your Long/Short Position which is a price when you will lose your money if you didn’t have a stop-limit.

Leverage

Leverage Meter in the Dashboard

This small box lets you choose on how much Leverage you want to take from the Exchange (Borrowing Limit)

For Beginners I recommend 1x-5x is more than enough as when you change your leverage and check your contract above, you will notice that your Liquidation price will automatically change as well. So I would recommend you to stick to 1–5

Common Newbie Mistakes

1. Fund Management — Remember to open a position only 50% or less of your total available balance, so that you can use the balance 50% to set Stop-Limit. This is the most common mistake done by new traders
2. High Leverage — Do not use high leverage even if you are just going to play around and use open 10 Contracts of Long and if price starts to fall and you did not have a Stop-Limit you might loose everything in your balance
3. Opening Bigger Positions — This mistake will cost you everything if something goes unfavorable. Leverage at 5x will let you open Longs of 5BTC if you have 1BTC, so don’t make a mistake.
4. Closing a trade — Make sure to check the XBTUSD price and BTCUSD price when you see your PNL as sometimes the different might be too high due to insider manipulation

R.O.E (Return on Equity)

The sole goal like I mentioned in the start of this long post is that, All the Longs/Shorts you open are all for 1 main purpose is to get more Bitcoin [BTC] which is how your PNL (Profit & Loss) is measured on Bitmex

If you are not confident to trade on BitMex there is nothing wrong with it as it is very risky. You can still use the 2 indicators to trade longs in normal exchanges.

Lastly don’t forget to join us & ask your questions if you have any doubts at

ThaiBX [ENG]