Bitmex is a CFD trading platform for Bitcoin and other cryptocurrencies. It’s a popular way to trade the price of cryptos. Unfortunately it also attracts a lot of new traders who have no idea what they’re doing and end up losing money. Here’s why you might have lost your money on Bitmex and what you can do to become a better trader.
You’re not a trader
Bitmex is for trading Bitcoin. Not for investing in Bitcoin. There’s a difference. Trading is where you profit from the price movement over a shorter period of time. Investing is buying an asset, holding it and profiting from gains over a longer period of time.
Investing is pretty easy because all you need to do is sit and hold. You can even employ tactics like dollar cost averaging to maximise your returns.
Trading on the other hand is really hard. Most retail traders end up losing money.
You’re trading with too much leverage
Leverage or margin trading, allows you to control a position much larger than the amount of capital you have. This can increase your profits but it’ll also increase your losses. Leverage can be a powerful tool for experienced traders. But for inexperienced traders is simply a great way to transfer your account capital to either your broker or another trader.
When you start trading I would recommend starting with as little leverage as possible.
You have an ego
Traders on Twitter like to have a big ego. They love to gloat about their wins and go off at their followers if they are criticized. The reality is these people aren’t making any money. Traders who have a big ego lose money. Ego is so important when it comes to trading that you can take courses in trading psychology. And a number of studies have found that over the long term, traders who have a meek, quieter personality perform way better over the long term compared to testosterone fueled angry types.
If your head is in the wrong place, you’ll end up opening trades to chase losses – aka trading with your heart and not your head.
You’re Trying to Short Bitcoin
Shorting is always inherently more risky and more difficult to trade. Shorting should be reserved for experienced traders. Even the best traders struggle with shorts.
Alternatives to Bitmex
So you’ve lost some money on Bitmex, what next? Well here are some alternatives ways to still make money in crypto or trade crypto without having to lose money.
What if you could copy the trades made by an actual profitable trader. You don’t need to sign up for a paid group. The social trading platform, eToro has thousands of crypto traders who share their every trade. And you can automatically copy these trades in realtime. It’s called copytrading, and I think it’s a great way to learn about trading and also make some money. I’ve been copytrading for the last 6 years. It’s a sustainable way to still trade but without having to do all the hard work.
Before you start trading on Bitmex you should try practice trading. You can do so with a free account on eToro. They’ll give you $100k to practice trading under real market conditions.
If you can’t make a profit in your practice trading account, there is a really good chance you’ll lose your money in your bitmex account. So start with a practice account, and trade like it is real money. Once you start making better trades there, you can move onto a real trading account.