Bybit Tutorial – Complete Guide To Leverage Trading On Bybit

In this Bybit tutorial, you will learn EXACTLY how to trade Bitcoin on Bybit and how to optimize your Bitcoin trading to be more profitable. Let’s dig in!

When searching for a Bitcoin trading exchange to trade Bitcoin on, it is important that you use an exchange with many users, high liquidity and great user experience. This is where Bybit exchange comes in, as it is at the forefront of the exchange technology and has taken the industry by storm.

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A Step-By-Step Bybit Exchange Tutorial

Bybit is one of the most popular Bitcoin futures trading platform to trade cryptocurrencies on. Trading Bitcoin and altcoins on Bybit is super easy compared to its competitors, and in this Bybit tutorial, we’ll go through the experience step-by-step. To start off with, you’ll need to create a Bybit account.

Bybit Vs. BitMEX

Bybit exchange has become one of the more prominent exchanges in terms of liquidity, and more Bitcoin traders are moving over to Bybit from BitMEX. Aside from a plethora of other reasons for Bybit’s superiority over Bitmex, there are two main two reasons traders choose the former. That is, Bybit does not get “system overload”, unlike Bitmex. The trading experience is seamless and Bybit can handle more trades per second than BitMEX. Another reason is that Bybit has outstanding customer service. You can check out our full BitMEX review here.

Make sure to read this whole tutorial for our best tips and tricks to maximize your profits when trading Bitcoin with leverage on Bybit.

Trade On Bybit From The US

If you are trading from the US, you’ll need to use a VPN. Trading from the US is currently blocked from Bybit. We recommend NordVPN, the most popular VPN out there. There are free VPN’s, but they are usually not very good. Please know that using a VPN is entirely at your own risk and in no way are we responsible if your funds are seized.

In this Bybit tutorial you will learn:

  • How to trade Bitcoin on Bybit
  • The basics of leverage trading
  • How to long and short Bitcoin with leverage
  • How to trade XRP, Ethereum & EOS
  • What a liquidation price is
  • How to set up a stop loss

Leverage Trading For Beginners

A common question is: can I lose more than I deposit into the exchange and then be in debt to Bybit? No, you can never lose more than you deposit into Bybit account. If you deposit 0.1 BTC into Bybit exchange, the maximum amount of funds you can lose is 0.1 BTC. Moreover, you can never lose more than the funds you use to open a position.

To understand this, you’ll need to know the basics trading on Bybit, which you’ll learn in these rapid fire info-graphics. If you want to know how to trade Bitcoin, you need to understand margin trading, also known as leveraged trading.

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A simple Explanation Of Leverage Trading & The Risk Involved

On Bybit exchange, you can trade Bitcoin with up to a 100x leverage. An easy way of understanding leverage trading is to think of it as being able to open a position worth more money than the initial margin you are risking to open the position. When leveraged trading, it’s important to know that margin trading offers both big opportunities as well as risks.

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A Margin Trading Example

For example, if you open a Bitcoin position on Bybit using $1000 worth of BTC on 10x leverage, your full position will be worth $10,000. This means that if the Bitcoin price moves up only 1%, you will actually make 10% on your initial margin. If you use 25x leverage and the Bitcoin price moves up 2%, your return on investment will be 50%, etc. Of course, the same can be said if the prices moves in the opposite direction, but with negative returns.

You are essentially “borrowing” Bitcoin from the exchange to maximize your profits. However, this comes with increased risk because of something called the “liquidation price”.

Risk – The Liquidation Price

In very simple terms, increased leverage means increased risk. For example, if we open a $1,000 Bitcoin position on Bybit with 10x leverage we will increase our profits by 10 times if the Bitcoin price moves up. However, if the price moves down 10% we will reach our liquidation price. If you use 100x leverage, which is the highest leverage possible on Bybit, it only takes a 1% drop in the Bitcoin price for us to reach the liquidation price. Simply put, higher leverage means that the liquidation price will be closer to your entry price, which is riskier. The liquidation price will always be met before the price reaches the “bankruptcy price”, as shown in the image below.

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When the Bitcoin price touches the liquidation price, our position on Bybit gets “liquidated”, which basically means that we lose our initial margin. In other words, if the position gets liquidated, we lose the position and the money we used to open the position. This is the risky part of margin trading Bitcoin.

Consequently, to prevent the leveraged position from getting liquidated you should always set up a stop loss, this is extremely important. Keep reading this Bybit tutorial, because further down below we will explain step by step how to set up a proper stop loss.

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How To Get A FREE Sign-Up Bonus

One thing that is very generous of Bybit is that they are giving their new users a free sign up bonus after registration. You can use this free bonus to make a free trade if you want to. More info about this below.

Register A Bybit Account

First of all, create a Bybit account using this link. If you use this specific link you will get a very valuable FREE bonus if you meet the deposit requirements. now, if you are registering from the United States, you will need a VPN. There are free VPNs out there, but they are usually really bad, so we recommend NordVPN.

How To Deposit On Bybit

To deposit funds into Bybit, click the “trade” tab in the upper left corner, and click “deposit”. On Bybit exchange you can deposit Bitcoin, Ethereum, XRP & EOS. This is a key difference between BitMEX vs. Bybit, because on BitMEX you can only deposit Bitcoin. Deposit 0.2 Bitcoin or 6 Ethereum into Bybit via this link to get the $60 deposit bonus.

How To Trade Bitcoin & Altcoins On Bybit

There is much more to trading Bitcoin than simply “buy” and “sell”. Now, if you want to learn how to trade Bitcoin successfully, you need to know the information below.

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Different Order Types

To make a market order on Bybit, click “market”, and click “limit” for a limit order. The difference between limit and market is the following: 

  • Market Order: When you open a market order, you are a market taker, because you take the best price available in the orderbook and the order executes immediately.  As a market taker, you will pay any fees in the transaction.
  • Limit Order: When you open a limit order, you are a market maker, because you are providing the order book with liquidity when your order ends up in the orderbook. Your order will stay in the orderbook until the price hits your limit order price level.  Here, you have the option of not paying transaction fees.
  • Conditional Order: If you want to go long when the price drops to a certain level, you can use the Conditional Order. For example, let’s say the Bitcoin price is $10,000 and you want to long Bitcoin if the Bitcoin price goes down to $9,000. In this case, you can put a conditional order at $9,000, because when this level is met, a market or limit order will be entered automatically, depending on what order type you choose.

Market Vs. Limit Summary

In other words, with a market order, you’re guaranteed to get the position opened immediately, but you won’t be able to control the entry price. With the limit order, you can guarantee your entry price, but you’ll have to wait for the price to reach your limit price for the position to open. When trading on low time frames, such knowledge is very important to be successful. In addition, Bybit fees are different for both market and limit orders. You’ll learn more about the fee structure further down in this Bybit tutorial.

Up To 100x Leverage On Bybit

Below is an image of the leverage slider on Bybit, and as you can see, you can trade on Bybit with up to 100x leverage. However, using 100x leverage comes with huge risk, and it is safer to begin with lower leverage when trading Bitcoin & altcoins on Bybit. To adjust the leverage, simply use the slider and put it at the amount of leverage that you are comfortable with. You can also manually enter the leverage by clicking the small “pen icon” in the lower right corner of the image below.

Register to Bybit to follow the rest of this tutorial. Use this link to get a FREE sign up bonus. You can use this free deposit bonus to trade on Bybit, instantly. There are several Bitcoin trading platforms offering leverage. Make sure to check our list of the top exchanges for leverage trading Bitcoin.

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Bybit Trading Fees

Bybit’s trading fees are similar to BitMEX. On Bybit exchange there is a 0.075% taker fee (market order), and a -0.025 maker fee (limit order). This means that there is a cost to enter a market order, and you actually get paid to use a limit order. This is why you should always use a limit order when trading Bitcoin on Bybit unless you are in a hurry and need to get filled immediately.

Important to note is that on Bybit, the trading fee is calculated on the value of the full position. In other words, the fee is drawn based on the sum on the initial margin and leverage combined. This means that the trading fee will be higher if you use higher leverage.

  • Market order fee 0.075%, on the whole position.
  • Limit order rebate -0.025%, on the whole position.

“Post Only” On Limit Order

A very important tip when using limit orders on Bybit is to click the “Post Only” box, under the Buy and Sell buttons. This ensures that your limit order will enter the order book as a limit order, and not execute as a market order. Further, this will guarantee that you get the maker rebate.

Perpetual Futures Contracts & The Funding Fee

Trading on Bybit is called Bitcoin futures trading. This is because the financial instrument being traded are futures contracts without an expiry date. Instead, they have something called a funding fee that is drawn every 8 hours. This means that the futures are what are commonly called perpetual futures, just like on BitMEX.

Now, there is one interesting fact to note here, and that is that the funding fee on Bybit is exchanged between the longs and shorts on Bybit, and not Bybit itself. This is done so the Bitcoin price on Bybit stays close to BTC spot price. Therefore, you can be paid to have a position opened every 8 hours if you trade against the majority of the market.

How To Enter A Bybit Trade

The best way to learn how to trade Bitcoin on Bybit is with a real-world example. Below is a step-by-step guide on how to enter a position with leverage on Bybit.

Choose An Order Type

To make a market order, simply press “market”, enter the preferred leverage and the quantity (Qty) in USD value and you’re ready to go. If you look at your Order Value, this number will represent the value of your initial margin plus the leverage you use to open the position.

The actual cost to open the position is visible further down in the image below the “Long” and “Short” buttons. The cost in this example is 1/10 of the Order Value, because we are using 10x leverage in this example. “Available Margin” simply shows you what you currently have in your account to trade with. 

Stop Loss & Take Profit

Remember that one very important thing in Bitcoin trading is a stop-loss. Now, if you click “Long” or “Short”, you will see a pop-up screen, as per the image below. Here, you can enter a take profit and a stop loss level, and when you press “Confirm” in the bottom right corner, your market order will be executed and your take profit and stop loss levels will enter the order book as conditional orders that will trigger automatically if price meets that level. This is very useful and this is another difference between Bybit vs. BitMEX, because on BitMEX you need to manually enter these orders separately. 

Before you press “Confirm”, review the order. Make sure that the leverage is correct and that the liquidation price is a level that you are comfortable with. Also, very important is to make sure that your stop loss will be hit before your liquidation price. If you agree to all the terms, press “Confirm”.

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View Your Open Position

Now you have an open leveraged position on Bybit. You will be able to view your current position at the bottom of your Bybit trading screen, as shown in the image below.

“Qty”, stands for the number of contracts that your position is worth at the time of opening it. Every contract represents 1 USD of value. “Value” is the same number but in BTC terms, and remember, it’s your initial margin + the leverage combined that sums up this number.

“Margin” shows you the funds that have been drawn from your Bitcoin trading account to open the position and “P&L” is your current profit or loss. “Daily realized P&L shows you how much realized profit or loss you have. This number is affected by fees and rebates.

Close Your Position

You can always close the position on Bybit, either by market or limit, and those buttons are seen towards the bottom right corner in the image. Your take profit and stop-loss orders will show up under the “Conditional” tap, above your position.

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How To Trade Altcoins On Bybit Exchange

Bitcoin trading is very popular due to Bitcoins volatility, but if you’re looking for even more risk & volatility you can look into altcoins.

If you want to become an altcoin trader, Bybit also offers smooth altcoin trading options. Compared to competitors in the space, apart from perhaps Phemex exchange, it’s easy to trade altcoins on Bybit. The platform currently supports trading for the following cryptocurrencies: XRP, Ethereum & EOS.

To change from Bitcoin trading into altcoin trading, simply click the little “B” logo, as shown by the green arrow in the image below. Interestingly, a big difference between Bybit vs. BitMEX is that you can, in fact, deposit altcoins into Bybit and then use those altcoins to trade with. This is not possible on BitMEX where you can only deposit Bitcoin and use Bitcoin as margin for altcoin trading. Bybit will add more cryptocurrencies in the future.

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Other Important Tips

Below you’ll find some other very valuable tips that will help your Bitcoin trading enormously. The tools listed below are the most popular ones among Bitcoin traders.

Tradingview – A Very Valuable Charting Tool

If you want to become a Bitcoin trader and are interested to trade BTC on Bybit, you should create a Tradingview account as your default charting program. It is the most used trading tool in the world, and most cryptocurrency traders on Bybit, BitMEX and Phemex are using it. 

Tradingview is completely free to use, but if you want to experience the full power of Tradingview, you can upgrade to the Pro version. It’s a small investment that you could quickly gain back by allowing Tradingview to enhance your crypto trading skills.

NordVPN – For Traders In The United States

Even if you don’t live in the US, you should still always use a VPN to protect your privacy online, especially if you are dealing with cryptocurrencies regularly. Further, to trade on Bybit as a US citizen you will need a VPN (Virtual Private Network). We strongly recommend NordVPN, it’s the most popular VPN in the world and it’s really cheap.

Buy Bitcoin & Altcoins With FIAT

If you still don’t own Bitcoin, you’ll have to buy Bitcoin before you can become a Bitcoin trader on Bybit. We have created a list of the best exchanges where you can buy Bitcoin.

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Other Bitcoin Exchanges

While we believe that Bybit is the best trading exchange there are several others that could be of interest. Make sure to read our list of the best Bitcoin margin exchanges in the world.