[vc_row][vc_column][vc_column_text]In today’s article I will introduce you to cross leverage on Bitmex. How it works, why use it, and who should use it.
But the first question is where to find it? The cross margin is available on different trading platforms. In this article we will focus on Bitmex.
Note that from a fundamental point of view the principle and usage of cross margin will remain the same, regardless of the platform you use. From a technical point of view, this could change slightly.
But first of all, let me introduce you to Bitmex.
It is a platform created in 2014, allowing margin trading. It is known for its easy access (no KYC), its leverage effects up to x100 and its many derivative products. Please note that you can only put BTCs, no FIATs are accepted.
Bitmex’s success is based on 3 elements: very high liquidity, very low costs and very high leverage. This allows very good gains to be made with relatively small variations.
The easiest way to get started with this platform is to use TestNet! This is like opening a fake account. So you can practice on the different tools that Bitmex offers. To differentiate the real account from the false account. Just look at the color of the logo. In green it is the non-real version and in red it is the real version).
Let’s get to the heart of the matter, the cross margin.
Cross Margin, also known as “Spread Margin” is a margin method that utilises the full amount of funds in the Available Balance to avoid liquidations. Any Realised PNL from other positions can aid in adding margin on a losing position.
This margin method is useful for users who are hedging existing positions and also for arbitragers that do not wish to be exposed on one side of the trade in the event of a liquidation.
With cross margin, trades made with strong conviction that initially appear to be unsuccessful can be held until the market turns around in the trader’s favor. Here is a list of the advantages of cross margin :
- Decreased time spent monitoring orders
- Greater flexibility
- Additional account protection
Note that you should always, place a stop-loss to protect your position. We will not get in the details on how to trade and manage your risk since this was covered in previous articles.
In the end, cross margin is interesting for scalping and/or swing trading. It avoids the excessive fluctuations that crypto currencies are so familiar with, by using all of your capital to cover your position. But be careful, because without a stop loss, the cross can very quickly become your worst nightmare and considerably reduce your capital and in some cases make you lose everything. So the cross margin is reserved for experienced traders.
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