How to trade decentralized perpetuals on GMX or dYdX? (DEX tutorial)

Setting Up Your Wallet and Connecting to the Platform

1. Install MetaMask or another EVM-compatible wallet extension in your browser.

2. Ensure your wallet is configured for Arbitrum One if targeting GMX, or for Ethereum Mainnet or Starknet if using dYdX v4.

3. Deposit ETH or stablecoins like USDC into your wallet using a bridge or centralized exchange withdrawal.

4. Navigate to app.gmx.io or dydx.exchange and click “Connect Wallet” in the top-right corner.

5. Select your wallet from the list and approve the connection request through the wallet popup.

Selecting Markets and Understanding Leverage Options

1. On GMX, go to the “Perpetuals” tab and choose between BTC, ETH, LINK, UNI, and other supported assets denominated in USD.

2. dYdX displays markets under “Markets” with real-time funding rates, open interest, and 24-hour volume—prioritize those with tight spreads and deep order books.

3. Leverage on GMX ranges from 2x to 50x depending on asset volatility and pool capacity; higher leverage increases liquidation risk significantly.

4. dYdX v4 allows up to 25x leverage on major pairs, but margin requirements scale non-linearly—users must maintain minimum initial and maintenance margins.

5. Both platforms display position size, entry price, estimated liquidation price, and unrealized PnL before order submission.

Placing Entry and Exit Orders

1. For market entry on GMX, select “Long” or “Short”, input desired size in USD, choose leverage, and confirm the transaction.

2. dYdX supports limit, market, stop-market, and take-profit orders—set price triggers and execution parameters directly in the order form.

3. GMX executes trades against its GLP liquidity pool; slippage is displayed pre-confirmation and depends on pool depth and trade size.

4. On dYdX v4, orders are matched on-chain via the Starknet sequencer; order book depth and fee tiers influence fill speed and cost.

5. To close positions, users can click “Close Position” on GMX or submit an offsetting order on dYdX—partial closes are supported on both.

Managing Risk and Monitoring Positions

1. GMX shows real-time funding payments every eight hours; longs pay shorts when funding rate is positive, and vice versa.

2. dYdX calculates funding every hour; the rate derives from the difference between mark price and index price, adjusted by a cap.

3. Liquidation thresholds update dynamically as mark price moves; GMX uses a 1% buffer above the theoretical liquidation point.

4. dYdX applies partial liquidation: when margin falls below maintenance level, the system reduces position size until health factor recovers.

5. Both platforms offer position health indicators—users should monitor margin ratio, estimated liquidation price, and available margin constantly.

Troubleshooting Common Execution Issues

1. Transaction reverts on GMX often stem from insufficient gas, outdated token allowances, or GLP pool imbalance—recheck wallet balance and approve USDC/ETH again if needed.

2. dYdX v4 order failures may occur due to expired timestamps, incorrect stark key registration, or insufficient collateral in the subaccount.

3. Delayed fills on dYdX happen during network congestion on Starknet; increasing fee priority helps but does not guarantee immediate execution.

4. GMX position updates sometimes lag due to on-chain event indexing—refresh the UI or verify status via Arbiscan transaction hash.

5. If funding payments appear missing, confirm whether the position was held across funding intervals and check the platform’s funding history tab.

Frequently Asked Questions

Q: Do I need to hold native tokens like GMX or DYDX to trade?A: Holding GMX grants staking rewards and fee rebates but is not mandatory for trading. DYDX token is required for governance participation but not for opening perpetual positions.

Q: Can I use stop-loss orders on GMX?A: GMX does not support native stop-loss orders. Users rely on external tools or manually monitor price alerts to initiate closures.

Q: Is isolated margin available on dYdX v4?A: dYdX v4 operates exclusively with cross-margin per subaccount. Isolated margin is not implemented; all positions share the same collateral pool.

Q: Why does my GMX position show different PnL than the index price suggests?A: GMX calculates PnL against the Chainlink-derived index price, but slight deviations may occur due to feed latency or temporary oracle inconsistencies.