Exchange Reviews

BitMEX exchange review: 5 things you should know before you start trading

BitMEX cryptocurrency exchange is not a typical virtual currency exchange in terms of services offered. The exchange requires that you have at least an understanding of cryptocurrencies and how the derivatives market functions.

Below we shall look at 5 things that you need to know before you start trading on BitMEX it will also help you understand why you have problems making head or tail of how the exchange works.

1. It’s a derivative exchange

BitMEX is a shortened form of Bitcoin Mercantile Exchange. Unlike other exchanges such as Binance and Coinbase, BitMEX specializes in trading derivatives. On this exchange, there two very important terms:

Derivatives:

An instrument the value of which is derived from the value of one or more underlying, which can be commodities, precious metals, currency, bonds, stocks, indices, among others

Margin trading:

An act of borrowing additional money or cryptocurrency by leveraging the number of cryptocurrencies that you already own to buy additional cryptocurrencies.

Simply put, margin trading is used in cryptocurrency circles to mean borrowing more cryptocurrencies to close the deficit gap that is preventing you from conducting a trade.

For instance, a trade needs you to have 500 BTC and you only have 300 BTC. So, you close the gap by borrowing the remaining 200 BTC. To be able to profit from margin trading, you need to have an in-depth understanding of the process. Additionally, take caution when margin trading; it’s very risky.

2. The signup process on BitMEX

The registration process on BitMEX is simple and straight forward. You only need a valid email address to be able to trade.

The exchange does not impose trading limits and neither does it require you to provide intimate personal details; Just an email, password, country of residence, 18 years of age, and a name.

With such few details being required, the exchange fails to appease regulators in countries such as the United States of America. The exchange, therefore, avoids providing services to U.S residents.

However, with the presence of virtual private networks (VPNs) U.S residents have been able to cross over.

3. The trading experience on BitMEX

As earlier stated, beginners need to get some classes before they start trading. But if you are familiar with options and futures, then you are good to go.

BitMEX offers support for a number of crypto and fiat currencies. They include, but not limited to, Bitcoin (BTC), Litecoin (LTC), Ripple (XRP), Ethereum (ETH), etc. supported fiat currencies include the Yuan (Chinese), Yen (Japanese), and the U.S dollar.

BitMEX

Traders on the exchange are presented with an order book which comprises details such as the quantity of the order, the bid value of the digital asset you want to trade, and the total value of all orders in U.S dollars.

BitMEX uses customizable widgets to let users choose what they want to be displayed.  Additionally, to enhance the user experience, the exchange provides advanced charting tools such as TradingView charts.

Popular types of orders available to BitMEX users include those that are fulfilled when the set price is achieved (limit orders) and those that are settled on the current market price (market order).

Others include stop market order, stop limit order, trailing stop order, take profit market order, take profit limit order.

4. The security and customer aspects of BitMEX

So far so good. BitMEX has not suffered a hack. This can be attributed to a dedicated team that ensures high-level security through multi-sig procedures.

BitMEX

The exchange takes security to a different level by ensuring withdrawals are not automated but must include human intervention.

The exchange is set to automatically halt activities if deposit addresses do not have a matching external key. BitMEX uses similar database and security tools like the ones employed by major banks and financial institutions.

Compared to other exchanges, BitMEX is very active in answering customer questions. The exchange uses tickets, email, among other channels to attend to customer queries.

Its frequently asked questions’ section provides a great resource in helping new and veteran users find answers to their troubles.

5. Trading fees, deposits, and withdrawals on BitMEX

Bitmex

BitMEX does not have any hidden fees and everything is documented. However, the fees charged depends on the products.

The exchange has a uniform maker, taker, and settlement fee. For example, the maker fee is -0.025 percent, a 0.075 percent taker fee, and 0.05 percent settlement fee across BTC, BCH, ETH, DASH, ETC, LTC, XMR, and XRP.

The exchange does not charge deposit or withdrawal fees.

Final words

BitMEX is not your traditional exchange. Therefore, it should be approached with caution so as to avoid making losses when trading. As a new trader on the platform, committing to small trades will be helpful in understanding how the platform works. However, the exchange is a great place for those experienced in margin trading.

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coinmag

Philip is an experienced blogger keen on staying updated with trends and news surrounding the blockchain and Bitcoin space. With several years of freelance experience in various industries, Philip brings his knowledge and experience into the crypto space.

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