Turn bear markets into profitable trading strategy with BitMEX margin trading

by Trailing Crypto cryptocurrency experts

Do you wish to trade cryptocurrencies, but are worried about the limited capital? Well! Stop worrying! There is a perfect approach which allows you to effectively leverage both short and long positions in crypto trading. What’s that?

Yes! It’s margin trading which allows the traders to leverage their positions on Bitcoin or other cryptocurrencies by 2x, 5x, 10x, or 100x and you don’t need to maintain the capital value which is required to open long or short positions.

Let’s understand what is margin trading in the crypto sphere?

Margin trading

Margin trading is an extremely profitable strategy that works well for beginners, intermediate, as well as advanced traders. Crypto trading with leverage enables its traders to trade with power by borrowing funds from the top exchange platforms.

Let’s understand this with an example:

Imagine you are trading cryptocurrencies online and you are confident about one of the assets which is about to take off. Now you wish that you could increase your holdings, and you want to enter or exit any position. With margin trading, you can increase your holding without having to liquidate other assets. While margin trading multiplies your profit, it can also multiply your losses at the same time if the trade doesn’t go well.

Trading with leverage or margin trading multiplies the amount of money you have to invest in any trade. So, if you have $10,000, then margin trading with 2x leverage will allow you to trade worth $20,000 of assets. BitMEX margin trading is gaining huge popularity among crypto traders these days that allows 20x to 100x of leverage, depending on the asset.

Over recent years, margin trading has become exponentially popular and many established exchanges like Binance and Huobi have started margin trading of perpetual swap contracts and cryptocurrency futures, replicating the BitMEX business model effectively.

How BitMEX trading with leverage works?

As we all know, BitMEX is the most popular crypto exchange platform that allows its traders to trade with the leverage of up to 100x on Bitcoin. BitMEX is providing traders’ with an opportunity to increase their potential gains while trading with leverage. However, the amount of leverage that you can access also depends on your initial margin, and the maintenance margin.

With margin trading, the traders may have two options:

·         Going long involves buying a contract as you believe that its value will increase in the future.

·         Going short involves selling a contract as you think that its price will move down in near future, and then you will buy it back at the reduced prices.

How does BitMEX margin trading work?

Let’s say, the value of Bitcoin (BTC) is 20K USDT and you are using a 10x margin on the BitMEX margin trading tab. And, if you have 1 BTC, then with margin trading, you can buy 10 BTC for the cost of 1 BTC. Here the exchange will lend you the remaining amount by using your 20K USDT as collateral.

So, if the price of BTC increases by 10%, then you will secure a profit of 10% on 10 BTC. Doesn’t it seem quite catchy and profitable? But, it’s true.

However, it can also multiply your losses. Like, if the price of BTC slips down by 10%, you will lose all your collateral.

Downside of margin trading

If you are planning to trade with leverage, it’s important to emphasize that this kind of trading is very risky. A drop in the underlying asset price may result in significant losses.

Let’s imagine that instead of the price of an asset A increasing by 25%, it decreases by an additional 25% in a few weeks following your initial margin trade. Here, it will multiply your losses.

Use BitMEX trading bots via the crypto trading terminal

If you are new to BitMEX platform, choosing BitMEX trading bots is the right option. Through third-party crypto trading terminals like TrailingCrypto, the beginners or the advanced traders can effortlessly create and set up a trading bot for BitMEX. The services offered by these platforms serve as an intermediary that makes the buying, selling, or investing multiple cryptocurrencies on different exchanges.

The best part about the BitMEX exchange platform is its advanced functions and tools. And, because of its advanced options, it could be tough for the crypto traders to develop a winning strategy to place trades at times. And, luckily, you may consider using BitMEX trading bots offered at the different crypto exchange platforms. 

BitMEX allows the crypto trading bots to be used on its markets which means that you can buy or sell crypto assets here automatically.  The best crypto trading terminals provide crypto trading signals to the traders allowing them to trade smartly. These signals are provided by the experts after proper calculations and allow traders to improve their trading strategy.

BitMEX is one of the best crypto exchanges that you can consider when you don’t need to risk too much money. However, you may try your hands on trading with leverage to earn higher profits. There are many crypto trading terminals like TrailingCrypto, Cryptohopper, etc. which offer BitMEX trading bots to its traders that allow them to trade with leverage automatically. However, it is essential to follow a disciplined or restricted approach to the whole trading process in the highly volatile crypto market. Choosing BitMEX trading combined with trading bots and margin trading can be perfect and safer in all ways.

For experienced traders looking for a margin trading platform, BitMEX margin trading is the most obvious choice. This exchange allows traders to earn money from the uptrends and downtrends in the crypto trading market.

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Created on May 16th 2022 12:19. Viewed 280 times.

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