The strategy I’m about to share with you in this article is my personal strategy I found to bo very sucessfull if used correctly. It’s unlike anything else you’ve seen I can guarantee you that. Most people sharing BitMEX strategies tell you to never go above 10x leverage or you’ll end up losing your money. Most people sharing BitMEX calls public or private never share calls with over 10-25x leverage.
Why do you think that is? Because none of these people are confident in their strategies, none of them are confident in their technical analysis and the calls they share with you. And I’m here telling you I play 100x on BitMEX almost every single time, sometimes I use 50x too because my strategy works and I’m confident with it.
First I’ll talk about the strategy and how it works, then I’ll show you proof of how reliable it is and how you can implement it into your daily trading.
100x Leverage strategy for BitMEX
This is pretty much what my chart looks like when I am doing my analysis for Bitcoin on BitMEX. I only trade Bitcoin using this strategy and I have not tested it on other currencies so just stick with Bitcoin.
It’s a 5 minutes chart of Bitcoin contract on BitMEX. The inducators used are RSI, Stochastic RSI and MACD. This strategy mainly focuses on the Stochastic RSI indicator, the MACD and the RSI indicators are only there to show me a longer term trend where the Stochastic RSI shows me the very short trend which allows me to find good entry points to enter the market.
If you don’t know what the Stochastic RSI is here’s a quick explanation:
The Stochastic RSI indicator (Stoch RSI) is essentially an indicator of an indicator. It is used in technical analysis to provide a stochastic calculation to the RSI indicator. This means that it is a measure of RSI relative to its own high/low range over a user defined period of time.
It works pretty much just like the RSI indicator but in a much shorter time frame. That’s why if you look at it you see a lot of ups and downs in its chart.
How the strategy works?
This strategy is fairly simple. Go long when the StochRSI goes in the 0-20 range and go short when it goes in the 80-100 range. If you look at the above image only using this as our indicator you had an opporunity for a nice profit of 84%. The gain of 0.84% displayed in the chart shows a 1:1 rato, so if you’d use a 100x leverage it would equal to 84%. Not bad for a trade that lasted just a little over 2 hours.
But this isn’t the entire strategy, this is just the foundation. Because if you look to the right of the chart above and you went short when the StochRSI went above 95 you would have lost that trade. Although I did my math and using the StochRSI alone gave me about 70-80% win rate I don’t recommend only relying on this indicator alone and I’ll show you why below.
Always draw your lines!
There is a few things happening on this chart. The black lines are my short term support and resistance trend lines, which are a must in this strategy. Always draw your lines! The black dotted line shows where was the previous resistance line but I changed it later and I’ll tell you why in a second.
If you don’t know what support and resistance lines are go check out this article on Investopedia, Support and Resistance Basics.
I’ve drawn the first resitance line horizontal at the 6740 level because the price hit that level for the second time and I noticed it was forming a resistance at that price level. I have then draw the support line and it created an ascending triangle pattern which is a bullish pattern. That’s why I didn’t enter a short trade where you see the orange circles on the chart, I didn’t know the price would break out then but it clearly looked like it wanted to.
And as you can see it touched the resistance line for the third time and it closed above it following by a small red candle (which usually form after a breakout to retest the resistance line that was just broken), that’s where I entered my long position at $6746, it didn’t matter that the StochRSI was above 95, the price just broke through the resistance and it was about to move higher, that’s why you can’t rely on just one indicator. After the small red candle formed I moved my resistance line to a higher point so I could see it clearly if it breaks out higher or not, there’s was no need for this it’s just what I do sometimes.
And as you can see it easily broke through it again with a huge green candle reaching $6830, I managed to close my position at $6820 for a 100% profit.
I didn’t enter a short position here but once the price reached its high of $6830 you had an opportunity for a short position which would give you a profit of over 100% with a 100x leverage. The RSI and the MACD started to turn bearish too so it was actually a perfect spot to short Bitcoin.
To sum up this section:
- Use a 5 minute time frame on your chart.
- Always draw your lines!
- Follow the Sotchastic RSI.
- If you spot a trend wait for confirmation (breakout) before entering a trade.
- Use the RSI and the MACD to spot a longer pattern.
Proof that the Stochastic RSI works
I see a lot of people hate on the Stoch RSI and I rarely see anyone using it and I don’t get why, it’s a very good indicator and when used corrently with other idicators it can be very reliable and profitable for intraday trading.
I demonstrate how good it is below.
To show you how good the StochRSI indicator is for my strategy I chose a fairly stable range where Bitcoin didn’t have any huge price movements. The timefrme I chose is between the 18th of September 00:00 and 19th of September 15:00 UTC time, which around 39 hours.
Now if for some reason you chose not to sleep for 39 hours and you chose to take a trade every single time the StochRSI went below 20 or above 90 you could make a total of 33 trades. Only 6 of those trades would be losers and 27 would be winners giving a total return of 1169% profit during the 39 hours timeframe.
But let’s be honest, no body is able to stay up for almost 40 hours straight and stare at the charts the entire time and nobody is able to catch the bottom and the top every single time.
So let’s say that out of the 33 possible trades you could have made, you only did 8. (I chose the trades at random)
|Date||Time Opened / Closed||Position||Open Price / Close Price||Profit / Loss|
|18/09||02:15 / 05:20||Long||$6229.5 / $6274.5||72%|
|18/09||11:55 / 12:25||Short||$6279.5 / liquidated||-100%|
|18/09||17:10 / 18:10||Long||$6309 / $6338.5||46%|
|18/09||18:10 / 20:05||Short||$6337 / $6291.5||80%|
|18/09||23:30 / 00:50||Long||$6335 / liquidated||-100%|
|19/09||05:50 / 07:15||Short||$6341 / $6321||32%|
|19/09||09:15 / 10:35||Long||$6296 / $6326.6||64%|
|19/09||14:00 / 14:30||Long||$6280 / $6332.5||85%|
If you only did the 8 trades I show in the table above you would have made a total of 179% profit and only 2 loses, which gives a winning rate of 75%. Remember that this is only using the StochRSI idicator, if you were to implement support and resistance lines, trends, patterns and breakouts you would easily catch higher returns.
I wrote the dates and times so you can verify for yourself that these trades match the strategy and you could have really placed those trades yourself.
Stop loss and position sizes
This is a very high risk – high reward type of strategy so remeber, never invest more than you can afford to lose. This strategy uses a 100x leverage, which means that if your position goes against you more than 0.5% your position gets liquidated. In a different perspective, 0.5% is around $33 at the current Bitcoin price. So there is not much room for error, you either win the trade or you lose it entirely.
That’s why there is no place for stop losses in this strategy, you just have to deal with getting liquidated once in a while. If you’re lucky and you see that your trade is going to lose you might pull out of it early, but most of the time you won’t be able to do that due to high spikes and drops in Bitcoin.
When you get liquidated you lose all the money you invested in that position, that’s why you have to be smart with your position sizes, because in order to make up for that loss you’d have to get a 100% profit on your next trade of the same size, but it might only be 50% if you increase the size of the position.
Also remember (using the current Bitcoin price of $6000-$7000) if Bitcoin makes a move of only $20 in your direction, you make around 30% profit, $33 and you make around 50% profit, $66 and you double your money. As you can see using high leverage pays off if your smart about it.
So how big should your positions be? It all depends on your budget and how confident your are in your position. If you only have like $100, go for $20-30 for each position. If you have a $1000, use $100 for each position. If you feel very confident that your trade will end up in profit, open a bigger position than usual or add to it later.
Let me not show you an example of how you could have played out the scenario below.
Day trading example
Using the chart you’ve been seeing for the entire article, let me now show you how you could have taken 3 trades on that single day for a total of around 360% profit using this strategy.
- The price just bounced from the bottom and gave us a nice big green candle which might indicate at least a short term trend reversal.
- The price consolidates and starts to for a descending channel pattern. Stoch RSI goes down to 0, you enter a long position(green cirlce).
- Stoch RSI goes above 90 but it touched the top trendline of the channel(red cirlce), you don’t sell because a breakout might occur.
- A breakout just happend, you can add up to your position or be paitient and hold your current position.
- Sell at the top for a profit of around 84%.
- The price just had a decent spike in price, the Stoch RSI reach 100 (green cirlce), enter a short position or wait for a pattern to form.
- Ascending triangle pattern starts to form. Stoch RSI goes below 20. Don’t sell yet, wait for a breakout.
- Breakout occurs(red cirlce), add up to your position or just hodl.
- Sell at the bottom for a profit of around 103%.
- Bitcoin just had droped almost $100 within 10 minutes. Stoch RSI still below 20, a reversal might happen, enter a long position(green cirlce).
- Another ascending triangle pattern starts to form. Stoch RSI goes above 90. Don’t sell, wait for a breakout confirmation.
- The price breaks out(red cirlce), add up to your position or just hodl.
- Sell at the top for a total profit of around 175%.
As you can see it’s not that hard to day trade Bitcoin on BitMEX using a 100x leverage. You just need to put on your indicators, draw your lines and follow your chart analysis and you’ll be fine. I know this guide isn’t perfect and there is a lot of stuff I didn’t cover as to how to recognise patterns etc. so just leave a comment below or send me an email with your question and I’ll get back to you as soon as possible.