Monfex is a brand new crypto trading platform. It has a great UI/UX, and a very simple and easy to use interface. It could definitely become a significant factor among the top crypto margin platforms.
Click here to open a new window of Monfex.
The most significant advantage of margin trading is that you can leverage a regular position without holding the required Bitcoin amount in your balance. Even better than that – margin trading allows you to open trading positions in both ways; that way during bear markets you can profit by shorting Bitcoin and other cryptocurrencies.
Another advantage is for security: The storage of a large number of cryptocurrencies on an exchange is not recommended. Using leverage, you can trade on coins stored off the platform.
* Editor’s comment: It is important to note that margin or leveraged trading is considered highly risky and speculative, so you should trade with caution. Always trade amounts you can afford to lose completely.
After a quick registration process, you will be taken to the Monfex main display. On the left panel, you can select the desired trading pair from the currently supported cryptos. As of April 2019, Monfex supports trading of US dollar against the following cryptocurrencies: Bitcoin, Bitcoin Cash, Dash, EOS, Ethereum and Ethereum Classic, Litecoin, Neo, OmiseGo, Ripple, Monero, and Zcash.
The left upper panel presents account data, including your account balance, profit and loss for the open positions, and equity – which is the sum of the last two numbers. It also presents the current margin level, total funds on margin, and the rest of the funds, which is the ‘free margin’.
In the main display, there is a nicely presented chart of the selected pair. You can adjust the chart settings such as the timeframe and chart display options (candles, line, bars, and more). You can also draw support and resistance levels and even add built-in technical indicators such as moving average lines and oscillators such as the Stochastic RSI.
Conveniently the tabs are added when you press on each trading pair. Currently, there are only a few pairs, but once the list becomes richer, the tabs will become even more convenient.
Each pair has its own pre-defined leverage. Usually, it’s either 5x or 10x. You can see it by clicking on ‘Instrument Details’ in the top right corner.
Looking at the above table, you can clearly see the commission rate along with the financing rate, which varies for long and short positions.
Before you can trade, you need to make sure you have funds – to top up your balance you use the Deposit green button.
Monfex, like other crypto margin exchanges, only accepts Bitcoin as its base asset. Once you click on Deposit, you receive your account’s unique deposit address.
To open up a long or short position, you use the top bar to define the position’s settings:
Order type: The options are:
Market – means the position will be filled by the best available price on the market.
Limit – Setting an order price manually using the Order Price ticker
Stop – firing the position only when the Stop Loss price is reached
Size of your position: The units are in Bitcoin, so make sure you change it accordingly.
Stop loss and Take profit prices (not mandatory, you can add later): A nice thing about Monfex is the option to have a Stop loss and Take profit set together. This doesn’t work in a normal exchange. You can always add or edit them to the opened position – just right click on the position and select Set Stop loss or Take Profit.
Once order type and size are set up, all you need to do is just select Buy or Sell – for Long or Short the desired trading pair.
Then the platform will display a confirmation screen. After approving, the position will open and is displayed in the designated area in the lower section of the display, under the Positions tab.
There, you can see the details of the position: including the Financing rate and live profit or loss.
The other tabs are ‘orders’ – which show all the open or unfilled orders, an ‘activity log’ which keeps track of all account activities, and the ‘Account History’ which stores the completed positions.
As mentioned before, the fees are combined from the commissions and funding SWAP rates. Commissions are charged as the position opens, SWAP rates are charged daily.
If you think that the time has come and you want to close your position, you just click the CLOSE button next to the position.
Unlike other margin exchanges, keep in mind that if you open an inverted position – let’s say a short position for the same size – the platform will add it as a new position instead of reducing or closing the current position. Some might see that as an advantage.
Leverage means position cost divides by the same ratio. For example, if we see that the leverage is times 5, then we expect the cost of the position to be reduced by the same ratio – divided by 5. Which means it will be reduced by five times. This allows you to trade Bitcoins you borrow from the platform. Keep in mind – the higher the leverage, the more funds you have to borrow from the platform, and therefore the more the fees will increase.
The liquidation price is the price value at which Monfex will force close your position, or liquidate it. Monfex can’t afford to lose money it lent to you for your position. Therefore, the position will automatically close once you lose the amount of Bitcoins that belong to you.
For example, let’s say we have longed 1 Bitcoin at 10x leverage. This means that 10% of the position comes from our margin (0.1 BTC). Hence, if the position loses 10%, our position will be liquidated by Monfex at the best available price. Currently, the liquidation price is not presented by the platform.
Overall Monfex trading platform can be a perfect solution for hedging: Great UI/UX, simple and fast, and has the major cryptocurrencies listed on it. Remember to do your own research and always use caution when margin trading. Good luck!