In this post we explain how to use Bitfinex, a serious website to make money. When you are already registered in Bitfinex (you can sign up by looking our post “Sign up for Bitfinex“), you are ready to learn how to use Bitfinex.
The first thing you need to do after creating your Bitfinex account is to optimise your security settings. Bitfinex provides an advanced range of security features that users can enable to increase their account security and further protect their funds. Believe us, it is something very necessary. As a bare minimum, they insist for all users to create a strong, unique password for their Bitfinex account, and to combine this with Two-Factor authentication.
- Email Encryption: Pretty Good Privacy (PGP) is a data encryption and decryption program that provides cryptographic privacy and authentication for data communication. You can encrypt mails that come from bitfinex.
- Two-Factor authentication: Every time you want to log in, they will ask for an authentication code from Google authenticator.
- Session: Choose several options. Keep Session Alive, Send Email on Login, Receive an email each time someone logs into your account, etc.
- Withdrawal Addresses Whitelist: For each currency you can limit crypto withdrawals to a specifically whitelisted address.
- Withdrawal Settings: You can monitor withdrawals by IP, lock withdrawals for 24 hours when a new IP address is used, etc.
You can access the verification section using the top menu. The verification process is a bit long, but it will speed up your deposits and withdrawals.
To get started with trading on Bitfinex, you will first need to deposit some funds. This can come in the form of any of their supported fiat currencies (USD, EUR, GBP, JPY) or using cryptocurrencies (BTC, ETH, …). You can use Payment Cards, Bank Wire or transfer cryptos directly to your exchange wallet. The first two deposit options have a small fee.
Note that if you wish to deposit and trade fiat currencies (USD, EUR, GBP, JPY), you will first need to verify your account. In addition to letting you deposit, trade and withdraw fiat currencies, a verified account can also work to speed up deposit and withdrawal times.
Please keep in mind that verification of your account can take up some days. Whilst waiting, however, keep in mind that you can still deposit, trade and withdraw cryptocurrencies tokens prior to completing the verification process.
Your Bitfinex account has three wallets – one for each of their core features. Exchange Trading uses funds from your Exchange wallet, Margin Trading uses funds from your Margin wallet, and Margin Funding uses funds from your Funding wallet.
Each of the three wallets is linked to one of the 3 specific functions on Bitfinex:
- Exchange wallet is used for exchanging funds between their supported currencies (Bitcoin, Ethereum,etc).
- Margin wallet is used for trading leveraged short and long positions (we will detail it later).
- Funding wallet is used for providing margin funding/financing to other traders (we will detail it later).
To place an offer or an order, make sure you have funds in the correct wallet. To buy or sell digital currencies like Bitcoin, you must use the excahnge wallet.
You can instantly transfer funds from one wallet to another for free on the wallet top menu.Through the wallets page, you will be able to view your various balances across all assets.
Steps to transfer funds between wallets:
- Type in the amount you would like to transfer in the “Amount” box.*
- In the second box, make sure the currency you wish to transfer is selected.
- In the third box, make sure the wallet you wish to transfer from is selected.
- In the fourth box, make sure the wallet you wish to transfer to is selected.
- Press the green “Transfer” button.
You can perform a shortcut by clicking on the “Available” balance under the wallet you’re wanting to transfer funds out of. This will automatically input the total available balance in the AMOUNT field and select the correct currency and wallet it’s in for you. You would then select the wallet you want to transfer funds to in the fourth box.
Transferring funds between your Bitfinex account wallets is free and performed instantly.
Note: Tokens which are not supported on margin trading or funding will be unable to move to those wallets.
Making Your First Trade
You are now ready to make your first trade.
Making your first trade on any exchange can be stressful as it often seems like there are many variables to keep in mind. We’ve put together another example below to help you make sense of it all.
Go to the panel on the left side (trading section). To make a trade, follow the steps below:
- Make sure your funds are on your Exchange wallet.
- Find to the Trading page and select the pair you wish to trade (e.g. BTC/USD – buying bitcoins using dollars)
- In the Order Form, select the Exchange tab.
- Specify the Order Type, Order Size, and Price. To make things simpler you can choose Market Order, resulting in your order being executed immediately at the current market price.
- When you have specified the type of order, size and price, simply click Exchange Buy or Exchange Sell to execute.
The picture above shows an Order Form for the BTC/USD pair. You can choose between Exchange (“normal” buying and selling) or Margin (trading on leverage.)
The first box, Limit, shows the type of order. A limit order allows you to specify the exact price and quantity you want (in contrast to e.g. a market order, which executes immediately against the best price available.).
The second box, Price USD, is the price you wish to pay/receive per BTC token. Keep in mind that this is not the total price you wish to pay, but the price per individual token.
The third box, Amount BTC, is the total amount of bitcoins you wish to buy or sell. To make a purchase, click exchange buy; to sell bitcoins, click exchange sell.
Using the BTC/USD example outlined above, pressing Exchange Buy would purchase Bitcoin using your existing USD dollars, whereas pressing Exchange Sell would sell your existing Bitcoins for dollars.
In the example above, you are interested in buying 0.5 Bitcoins when the price drops to 9,670 USD (note that the current Bitcoin price is 9,676.4 USD).
Your order should now appear in the Orders section, visible below the Chart. Once your order is executed, your funds will be credited to your Exchange wallet and the executed order will now move to the Order History tab.
In the example above, we see that 2 people want to buy a total of 0.7987 Bitcoins at the price of 9,670 USD (one of them is you)
I will soon explain how to use Bitfinex more deeply.