Leveraged Derivatives Trading Crypto:
Not for the novice and no rest for the wicked.
Someone recommended that i check out BitMex and all I can say once I've gotten over the leverage and volatility, the risk, it's just wow.
Firstly, if you have never traded stock options or futures in your life, this is probably not for you. This is high stress, fast and dangerous. Sure you don't need to max out your leverage, and I don't recommend it, but there is a different level of complexity when you trade swaps and futures contracts. The gains can be greater, but the losses can be excessive.
The service provides full guides on their futures and swaps and I highly recommend that one reads and thoroughly understands the details of trading these crypto derivatives, especially if you will be adding leverage.
Traditional definitions of Swaps and Futures on investopedia where i recommend individuals also read up on derivatives trading, backwardation and contango as they pertain to futures. It's a lot of homework, I know, but studying the fundamentals of these devices as they are traditionally used will provide context on how BitMEX has modelled their platform.
So far the service is great, I haven't had any devastating hiccups or anything like that. They do have a trollbox and you should stay out of there unless you are in fact trolling (never trade anybodies advice from the trollbox).
"Pffft shut up satchmo I can do this!"
Start small. I did a couple trades using only five or so dollars with an account value of $30. Get the hang of it, decide if its something for you.
Stay small. Trading on BitMEX will require active participation if high risk, high leverage is what you seek. If you are good at this, you won't need to add more bitcoin to your wallet.
This was a planned trade, as precisely as possible, on the 5 minute chart of bitcoin, following the stochastic RSI cycle. I won't typically show off my trades at all, but as i was just fooling around, and maybe it's to abate a hater ;-)
The Kicker...
... I got greedy and busy in the troll box...
The chart turned on me as I wasn't focusing. Trading this kind of leverage requires focus, consistency and planning. So I closed out at market. Dollar gain on this short position is not so much, but its about percentage, leveraged 100X.
Information was redacted from the screenshots for my own protection and privacy.
Long story short BitMEX is floating around and its intense. You must study and be dedicated to your strategy and measured approach. Leverage is for trading only, these vehicles are not meant to be held for extended periods of time. No HODL'ing!!!
BitMEX Link if you are not deterred by any of the resources I have provided, but proceed with caution if you are a novice.
Follow at your own risk, Not a financial adviser, understand the risks associated with trading and investing. Manage your own Risk - in other words you could lose it all and I could give a fuck.
