Trading futures is one of the popular ways to invest in the crypto market. Binance, as the largest crypto exchange in the world, provides a futures platform that allows users to trade with leverage. For those of you who are beginners, before starting trading in Futures, here is a guide and tips for you
1. Understand the concept of futures trading
Before starting, it is important to understand what futures trading is. Futures trading is a contract to buy or sell an asset at a certain price in the future. On Binance, you can trade various crypto pairs such as BTCUSDT, ETHUSDT, BNBUSDT and many more.
Types of Futures Contracts on Binance
- USDⓈ-M Futures (USDⓈ-Margined Futures)
- This contract uses stablecoins such as USDT (Tether) as margin.
- Profits and losses are calculated in USDT.
- Common trading pairs including BTC/USDT, ETH/USDT, and more.
- COIN-M Futures (Coin-Margined Futures)
- These contracts use cryptocurrencies such as BTC or ETH as margin.
- Profits and losses are calculated in cryptocurrency used as margin.
- Examples of trading pairs are BTC/USD, ETH/USD, etc.
2. Register and Activate a Futures Account on Binance
To start trading futures on Binance, you need to have a Binance account. If you don't have an account yet, you can register on the official Binance website or application. After registering, follow these steps to activate a futures account
1) Log in to your Binance Account using the email and password you have registered.
2) Futures Account Activation On the main page, navigate to the “Futures” menu and select “USDⓈ-M Futures”. You will be asked to read and agree to the terms and conditions before activating your futures account.
3. Deposit Funds to Futures Account
After activating your futures account, you need to deposit funds. Binance allows funds transfer from spot wallets to futures wallets. Follow the following method
1) Log into your Binance Wallet. Select “Wallet” in the main menu, then select “Futures”.
2) Click “Transfer” and select the token/coin and amount you want to move from your spot wallet to your futures wallet.
4. Understand the Trading Interface on Binance Future
The futures trading interface on Binance may seem complicated for beginners. Here are some important elements you need to know
- Order Book Displays buy and sell prices offered by other traders.
- Chart Price graph that shows asset price movements in various time intervals.
- Order Panel Where you enter order details, such as price and number of contracts.
- Positions Tab Displays your open positions, including profits or losses.
5. Create and Manage Orders
To trade, you need to place an order. There are several types of orders that can be used
- Market Order Buy or sell an asset immediately at the current market price.
- Limit Order Buying or selling an asset at a certain price.
- Stop Order Buy or sell an asset when the price reaches a certain level to limit losses or lock in profits.
6. Using Leverage Wisely
Leverage allows you to increase potential profits, but also increases the risk of loss. Binance offers up to 125x leverage, but it is recommended for beginners to use lower leverage, until you are more experienced.
7. Risk Management
Risk management is the key to success in futures trading. Here are some risk management tips
1) Use Stop-Loss Determine a stop-loss level to limit losses.
2) Don't invest all your capital, use a small portion of your capital for each trade.
3) Diversification Don't put all your funds in one position.
8. Continuous Education and Learning
Continuing to learn and keep up with market developments is important. Take advantage of educational resources provided by Binance, such as Binance Academy, webinars and market analysis articles.
NOTES
Trading futures on Binance can be a profitable way to invest in the crypto market, but it also carries significant risks. By understanding the basics, using leverage wisely, and implementing good risk management, you can increase your chances of success. Always do ongoing research and education to become a better trader.
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Hopefully this article helps you start your futures trading journey on Binance. Happy trading!