What is Futures Trading?
Futures trading allows traders to participate in market movements and potentially profit by taking a long or short position on a futures contract. At Binance Futures we can use various levels of leverage to increase potential profits in the market.
Steps to Start Trading Futures on Binance
1. Create an account and complete the survey
Filling out a survey will appear when opening the futures feature to ensure eligibility for opening the futures feature, make sure to fill out the survey correctly to open this feature
2. Deposit Funds to Binance Account
After signing up, deposit funds into your Binance account. You can use USDT or other coins as collateral for futures trading.
3. Choosing the Right Futures Contract
You can choose USD-M or COIN-M to make a trading position. USDM ensures that the collateral uses USD and the contract is settled in the form of USD stable coins, while COINM allows positions to be placed using COIN collateral. COIN-M has a higher profit potential but can be confusing to calculate profits because the contract is settled in the form of COIN.
4. Using Leverage
Choose leverage that suits your trading strategy. High leverage allows you to enlarge your trading position with smaller capital, but also increases the risk of large losses.
5. Order Placement
Select the type of order you want to use (e.g. market order, limit order). Customize the order details and click [Buy/Long] or [Sell/Short] to place your order. You will profit from a long position if the price goes up and profit from a short position if the price goes down.
Futures Trading Tips For Beginners
1. Start with a Demo Account
Use a demo account to practice trading in a safe environment without the risk of losing real money.
2. Learn Technical Analysis
Learn the basics of technical analysis to help you make better trading decisions.
3. Set a Trading Strategy
Determine a trading strategy that suits your goals and risk tolerance. Trust your strategy and avoid making impulsive decisions.
4. Manage Risk Well
Never invest more than you can afford to lose. Use stop loss and take profit to manage risk.
Example of Futures Trading Calculation
You have $10 and open a 10x position on token A. then you have a position of $100. If you profit by 1% then your profit becomes 10% (multiplied by 10) and vice versa if you experience a loss. In order to avoid liquidation I recommend having more collateral when placing a position on cross margin, to allow the position to continue running even at -100%.