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 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.

BitMEX

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