Beginner's Guide to Futures Trading
Start Small-Initial Capital: Begin with a modest amount, such as $100.
Select Coins Wisely
- Lower Volatility: Choose coins with lower volatility to minimize risk.
Leverage Caution
- Maximum Leverage: Use leverage up to 10x but avoid exceeding 50% of your capital. For example, with $100, your leverage should not surpass $150, meaning $15 x 10.
Avoid Uniform Trades
- Diverse Entries: Don’t place long or short trades on a coin using your entire margin at the same price.
Manage Margin Effectively
- Split Your Margin: Divide your margin into four parts. For example, $15/4 = $3.75. Open positions with $3.75 x 10 = $37.50 USDT.
Apply Dollar-Cost Averaging (DCA)
- Long Positions: If you have a long position and the coin falls by 5-10%, add to your position with $3.75 x 10. This lowers your average entry point.
- Short Positions: For short positions, if the coin rises by 5-10%, follow the same strategy. Your total position will then be $75 USDT, while your balance remains $100.
Exit Strategy
Profit and Loss: Close your position if the coin surpasses your breakeven point with profit. If it drops again by 5-10%, DCA again (avoid DCA for small drops of 1-2%).
Chart Analysis
Duration: Use chart durations like 1 hour, 4 hours, or 1 day to understand coin behavior.
RSI Indicator
Usage: As a beginner, utilize the RSI indicator on 1H, 4H, or 1D charts.
Signals: An RSI below 20 indicates oversold conditions and may signal a buying opportunity, while an RSI above 90 suggests overbought conditions, signaling a potential short.
Use Stop-Loss Orders
Protection: Always set a stop-loss to protect against significant losses.
Be Patient
- Market Awareness: Stay informed about the market, time your trades carefully, and avoid impulsive trading.
- Profit and Loss Management: After making a profit, wait for a secure entry point before trading again. If you incur a loss, stay calm and avoid hasty decisions to recover, as this could lead to further losses.
