How to use the Bybit API for trading?

Getting Started with the Bybit API

1. To begin using the Bybit API, users must first create an account on the Bybit platform and enable API access through the security settings. This process requires two-factor authentication to ensure the safety of trading credentials.

2. After logging in, navigate to the API management section where you can generate a new API key and secret key. These keys are essential for authenticating requests sent from your application or script.

3. It is crucial to assign proper permissions when creating the API key. For trading purposes, ensure that both 'Order' and 'Account' permissions are enabled, while avoiding unnecessary privileges like withdrawal access unless absolutely required.

4. Once generated, store the API and secret keys securely. Never expose them in public repositories or client-side code, as this could lead to unauthorized access and financial loss.

5. Bybit supports multiple endpoints across Spot, Linear, Inverse, and USDC perpetual contracts. Choose the correct base URL depending on whether you're interacting with the mainnet or testnet environment.

Understanding Request Structure and Authentication

1. All private API endpoints require signed requests. The signature is generated using HMAC SHA256 encryption, combining the request parameters with your secret key.

2. Each request must include specific headers such as 'X-BAPI-API-KEY' for your public key and 'X-BAPI-SIGN' for the computed signature. Timestamps also need to be included to prevent replay attacks.

3. Parameters for GET requests are typically passed via query strings, while POST requests send data in JSON format within the body. Always refer to the official documentation for exact formatting requirements per endpoint.

4. Common mistakes include incorrect parameter ordering, missing required fields, or improper encoding of special characters. Debugging these issues often involves comparing raw request payloads against documented examples.

5. Use tools like Postman or cURL during development to simulate API calls before integrating into automated trading systems.

Executing Trades Programmatically

1. Place orders by sending a POST request to the appropriate order creation endpoint, providing essential details such as symbol, side (buy/sell), order type (limit/market), quantity, and price if applicable.

2. Market orders execute immediately at the best available price but may suffer slippage during volatile conditions. Limit orders allow setting a specific execution price but risk non-fill if market levels move away.

3. After submitting an order, always check the response payload for confirmation. A successful call returns an order ID and status, which can be used for tracking or cancellation later.

4. Retrieve open orders using the active order query endpoint. Filtering by symbol allows traders to monitor positions across different markets efficiently.

5. Cancel individual or bulk orders through dedicated endpoints. Batch cancellation helps streamline position management when adjusting strategies rapidly.

Managing Risk and Monitoring Performance

1. Regularly pull account wallet balance and position information to maintain awareness of current exposure and available margin.

2. Set up webhooks or use WebSocket streams to receive real-time updates on order fills, price movements, and liquidation risks instead of relying solely on polling REST APIs.

3. Implement circuit breakers in your trading logic to halt operations if drawdown thresholds are breached or connectivity issues arise.

4. Monitor rate limits enforced by Bybit; excessive requests may result in temporary IP bans. Distribute calls evenly and prioritize critical functions during high-frequency operations.

Frequently Asked Questions

What is the difference between linear and inverse contracts in Bybit API?Linear contracts are denominated in USDT, meaning profits and losses are calculated in stablecoin value. Inverse contracts use BTC or ETH as the settlement coin, leading to asymmetric P&L calculations based on cryptocurrency price fluctuations.

How often does Bybit refresh server time, and why does it matter?Bybit server time operates continuously in milliseconds. Accurate time alignment is vital because each signed request includes a timestamp. If the local system clock deviates beyond 5 seconds from the server, the request will be rejected for security reasons.

Can I use the same API key for both testnet and mainnet trading?No, API keys are environment-specific. Keys generated on the testnet cannot access live trading accounts and vice versa. Always create separate keys for testing and production environments to prevent accidental live trades during development.

Is WebSocket support available for all order types on Bybit?Yes, WebSocket feeds provide live updates for all order types including limit, market, stop-limit, and take-profit/stop-loss orders. Subscribing to relevant topics such as “order” or “position” enables instant notification of state changes without constant polling.