Getting Started With Phemex – A Beginner’s Guide
What is Phemex?
Phemex is a cryptocurrency exchange that allows you to trade over 230 cryptocurrencies. The process of using Phemex is similar to that of any other online trading platform; however, it does have some unique features that make it stand out.
Phemex also ensures your safety by using two-factor authentication, encrypting all data on their servers, deploying multi-signature confirmation, and storing user funds offline.
Phemex Sign Up
Follow these three steps to get started on Phemex:
- Go to Phemex.com and click “Sign Up.” Fill out the required information and click “Confirm Registration”
- Enter your email address and click “Send Code.”
- Enter your code when prompted, then hit “Submit” to complete the process and begin using Phemex!
Explore the Phemex Platform
Once you have confirmed your registration, you will be taken to the Phemex home page. Here, you can proceed to navigate the website, make your first deposit, and start trading.
Note: It is always recommended to explore a new platform thoroughly before making any financial commitment. Explore Phemex and become familiar with its main features as a first step.
How to Complete KYC on Phemex
Once you have completed all of the registration steps, click “Verify my identity”. Next, you will need to upload a government-issued ID (passport, driver’s license, or national ID). The ID must be valid and in colour. It also must be in focus and have an aspect ratio of at least 2:3 or 4:5.
As a final step, you will be asked to complete face verification. For this you will need to turn on your webcam and center your face in the frame while Phemex checks that your uploaded ID matches your face.
While KYC is not mandatory, Phemex highly recommends completing it in order to enjoy the full suite of services offered to its users.
How to Make Your First Deposit on Phemex
Phemex allows users to deposit crypto, make a bank transfer, or use a credit card to fund their account. Here’s the steps for each method:
Crypto
Navigate to the dropdown menu labeled Assets. This will appear next to your account icon. Select deposit. Select the coin and network you’d like to deposit, and make sure these settings match the ones on the wallet or exchange you’re sending the funds from (very important!).
The safest way to ensure you get the deposit address correct, is to copy it directly from the deposit page and paste it into required field on the location you’re sending it from or scan the QR code provided.
Note: Make sure Phemex supports the asset you’re trying to deposit AND the network you’re using. Also check if a tag/memo is required and copy/paste that as well. Failure to complete any of these steps could result in lost funds.
Credit Card
Choose “Credit Card” as your funding option and fill out the remaining fields on the screen. You’ll be asked for some basic information like the deposit amount, and frequency of deposit (one time vs. recurring) and then your card will be charged for the amount of currency that you’ve selected.
Note: Some foreign exchange fees may apply if you are converting funds into USD from other currencies such as EUR or GBP.
Bank Transfer
Choose this option from the dropdown menu near where it says “Transfer USD.” Next, enter in all of the required fields. These will include your bank name, routing number and Swift code (typically printed on checks or statements). Here’s a full list of the data you’ll need to input.
Source: Phemex.com
For the full Phemex guide on bank transfers, go here.
How to Make Your First Trade on Phemex
It’s time to make that first trade! Follow these steps:
- Navigate to Spot –> Spot Trading
- Select a currency pair to trade
- Choose trade type – buy or sell
- Enter position size and price limit
- Click the buy/sell button
- Scroll down to Active Orders
- Wait for the bid to fill
- Check order history/fills to verify
For this example, we’re trading on the spot market. To trade perpetual contracts, follow the same steps after navigating to contract –> USD-M Perpetual. In this case, buy will be stated as “long” and sell will be stated as “short”.
The screenshot illustrates our basic trade setup. We’ve placed a bid to buy $1000 of BTC at $16600. We could also choose to divide that $1k and set bids in $200 increments. This would be a dollar-cost-averaging strategy – something we highly recommend for beginners.
If you choose to trade with leverage on the perpetual market, don’t forget that leverage affects both risk and reward! Leverage increases risk but also increases rewards so it’s important to not only choose an appropriate level, but also to stick with it consistently.
If you normally trade with 2x leverage, do not suddenly raise it to 10x after a successful trade. This will lead to ruin very quickly.
An important caveat here: If you’re unfamiliar with exchange functions, take the time to learn them before you move on to this step.
Why Use Phemex Exchange Over Competitors?
Phemex has quickly risen in popularity since its inception in 2019. That’s not surprising when you consider all its useful features:
- Low fees: 0.01% on all maker trades
- Fast withdrawals & low minimums
- 240+ trading pairs
- Social trading (copy the experts)
- Real-time market depth view
- Dynamic order types
- Up to 100x leverage
- Beginner + expert friendly
Low Fees
Phemex boasts 0.1% maker and fees for spot trading, along with 0.01% (maker) and 0.06% (taker) for contracts. That’s extremely competitive and edges out most competitors.
Fast Withdrawals & Low Minimums
Some exchanges make you wait up to several hours or days for withdrawal processing, and apply cumbersome limits. Not so for Phemex verified members. Deposit and withdrawal limits are kept at the lowest feasible minimums, along with their associated fees. View the full schedule here.
240+ Trading Pairs
Phemex currently has 242 pairs on the spot market and 157 pairs on the derivatives market. It often ranks top-20 in derivatives volume among exchanges, and top-50 in terms of spot volume.
Social Trading
Phemex allows users to follow their favorite traders and copy their every move! There are currently around 180 traders to copy on the platform. These traders are free to copy, and they take a % of the profits from successful trades.
Real-time Market Deph View
A real-time market depth view allows you to see how much price movement can be expected in a given market. This is different than a simple price chart because it allows you to see the total number of orders waiting to be fulfilled at each price level. This can indicate how much your order would affect the current price.
Dynamic Order Types
Phemex exchange users get the benefit of being able to set conditional entries, stop losses, trailing stops, and profit-taking levels all at the same time. This makes for easy risk management without the need for third-party trade management tools.
Up to 100x Leverage
We do not recommend trading with 100x leverage! However if you love an adrenaline rush once in a while, you could give it a try with $5 or $10 just for fun. We prefer low leverage, low risk.
Beginner + Expert Friendly
Phemex recommends that beginners start with spot trading before moving on to derivative contracts with leverage. To swim with the big fish, you must first start in the shallow end. There are enough tradable assets to suit every level of trading – beginner to advanced.
Is Phemex Secure?
Phemex deposits are kept offline to ensure maximum security. Deposits are also segregated from users’ hot wallets and stored in their cold wallets. This ensures that if there is any breach of the server, user funds will be protected. Phemex deploys what is known as a Hierarchical Deterministic Cold Wallet System which assigns different cold wallet deposit addresses to each user. This offers extremely robust security and bolsters the safety and trustworthiness of the exchange.
To make sure withdrawals are safe and secure, Phemex uses a multi-signature withdrawal mechanism where two different signatures must be present for a transaction to take place.
If one person’s account gets compromised, the hacker won’t be able to steal any money because he or she will require another person’s signature as well. This system makes it practically impossible for hackers to withdraw money without permission.
Additional security measures include withdrawal whitelisting, two-factor authentication, and double-entry bookkeeping for quick detection of account tampering. If any fraud is suspected, the system will immediately freeze actions and operations within the compromised account.
Does Phemex Have Fast Trading Engines?
Phemex is powered by a proprietary matching engine that was developed specifically for HFT (high frequency trading), and it is one of the fastest in the world. Phemex CrossEngine is designed with a capacity to handle more than 300K orders per second, and multiple market data feeds.
The system has no downtime even for system maintenance or upgrades, which is a huge differentiating factor from most top-tier exchanges. During periods of heightened market volatility, it is imperative for traders to operate quickly.
Phemex claims that the response time between a market order entry and the corresponding fill is less than 0.2ms. That along with the high throughput, means the engine stands up against the most rigorous tests.
Speed, security, and continuous uptime are certainly desirable qualities that might draw one to Phemex over leading competitors like Binance or Bybit.
A Word of Warning on Derivatives Trading
Phemex is both a spot and a derivatives (perpetual futures) exchange. The most important thing to understand about derivative trading is that it can be a very risky endeavor. While you can make money, it’s not uncommon for people to lose everything they invest in leveraged trading instruments.
When you buy or sell a derivative contract, you are essentially gambling on whether the price of the underlying asset will rise or fall over a short period of time. Without a well-defined risk management strategy, things can go south quickly.
If you are interested in making money in cryptocurrency, then it may be best to avoid derivatives altogether. You should only trade derivatives if you have enough knowledge about how these instruments work, who is involved in them (including yourself), and what kinds of risks are associated with using them as an investment, diversification, or hedging tool.
Final Thoughts
Phemex consistently ranks in the top-20 for derivatives trading volume, and often cracks the top-10. They offer highly competitive trading fees, outstanding liquidity, great service and overall user experience. KYC is optional and most activities on the platform can be done without completing it.
We really appreciate that Phemex is built with layers of security without sacrificing any efficiency, and that the team maintains an ethic of transparency. The platform beats out many of its competitors based on these qualities alone.
The Phemex team has an innovative growth mindset, and seems to have unlimited upside potential. They’ve built a product that’s just as useful for beginners as it is for advanced traders. It’s easy to move money in and out of the exchange with minimal fees, and the team recently published proof of reserves.
We recently spoke to the head of Phemex busines relations, who confirmed that indeed user funds are 100% intact and accounted for. Just to be sure, you can check your account reserves here.
We sincerely hope that this Phemex beginner’s guide has been helpful, and if so, please feel free to share it with friends or quote any of the useful content you came across here.
