If you are a beginner and plan to trade Futures on Binance, you must first understand the various terms and risks that may occur. Understand the Key Terms in Futures Trading on Binance Before starting trading, it is important to understand the terms commonly used in Binance Futures:.
Leverage: This allows you to enlarge your trading position with a smaller capital. For example, if you use 10x leverage, then a capital of Rp1 million can control a position of Rp10 million. Long Position: Buying a futures contract in the hope that the price of the coin will rise. If the price rises, you will make a profit.
Short Position: Selling a futures contract in the hope that the price of the coin will fall. If the price falls, you will make a profit.
Mark Price: The reference price that Binance uses to avoid unfair liquidations. Mark price is used to calculate margin and liquidations.
.Initial Margin: The minimum amount of funds required to open a futures position.
Maintenance Margin: The minimum amount of funds you must have to maintain an open position. If the balance falls below this, you will receive a margin call or the position may be liquidated.
Liquidation: When the price moves against your position and the margin balance is insufficient, the position will be automatically closed and the funds used will be lost.
Funding Rate: The fee paid by long and short traders to keep the futures contract price in balance with the spot price. The funding rate is usually updated every 8 hours.
Choose a Coin Pair to TradeOn Binance Futures, you can trade various coins such as Bitcoin (BTC), Ethereum (ETH), Binance Coin (BNB), and many other altcoins. Choose the coin you want to trade based on research and analysis. Tip: Choose a coin pair with high liquidity such as BTC/USDT or ETH/USDT, as they are more stable and tend to be easier to trade. Learn Order TypesOn Binance Futures, you can use various types of orders to manage your trading positions:
Market Order: An order that is executed immediately at the current market price. Used when you want to enter or exit a position quickly.
Limit Order: An order that is executed at a specific price that you specify. The position will only be opened if the market price reaches the limit price.
Stop-Limit Order: A combination of a stop order and a limit order. It is used to set a buy or sell order after a certain price is reached.
.Stop-Market Order: Similar to stop-limit, but the order will be executed at the market price once the stop price is reached.
Take Profit/Stop-Loss (TP/SL): Automatic orders that allow you to automatically close a position if a profit target is reached or if losses reach a certain limit.
Set the Right LeverageBinance Futures offers various levels of leverage, from 1x to 125x, depending on the coin pair being traded. Higher leverage means you can open a large position with a small capital, but the risk is also much higher.
Tips: For beginners, it is better to use low leverage (eg 2x-5x) to reduce the risk of liquidation. Do not use high leverage without a deep understanding, because losses can occur quickly if the price moves against your position.
Conduct Market Analysis (Technical and Fundamental)Before opening a position, it is important to conduct technical and fundamental analysis:Technical Analysis: Using tools such as Moving Averages (MA), Relative Strength Index (RSI), Bollinger Bands, and candlestick patterns to predict price movements.Fundamental Analysis: Involves crypto market news, project announcements, technology adoption, or regulatory changes that may affect the price of a coin.
Tip: Use the charting tool on Binance which is integrated with
TradingView to perform technical analysis. Follow news and trends in the crypto industry to understand the factors that influence prices.
Manage Risk WellRisk management is the key to becoming a successful trader. Never trade without having a clear risk management plan. Some risk management principles that need to be applied are:
Use Stop-Loss: Always set a stop-loss to limit your losses. Don't leave your position open for too long if the market moves against you.
Limit the Capital Used: Never use more than 1-5% of your total capital in a single trade.
Position Diversification: Donât just rely on one coin pair or one direction (long/short). Diversification can help reduce risk.
Actively Monitor PositionsOnce a position is open, it is important to actively monitor the market as crypto prices can be very volatile. You can use tools such as:
Price Alerts: Set price notifications when a coin reaches a certain level.
Margin Monitoring: Make sure your margin is sufficient to avoid liquidation. If the price moves close to the liquidation level, you can increase the margin or close some positions.
Evaluate and Learn from Each TradeAfter each trade, it is important to evaluate the results and learn from the experience. Keep a trading journal that records:Reasons for entering the positionStrategy used (technical or fundamental analysis)The final outcome of the position (profit or loss)Lessons learned from the trade
Tip: By analyzing what works and what doesn't, you can continuously improve your trading strategy.
.Be Prepared to Face LossesCoin futures trading is a high-risk activity. Losses are part of the learning process, and what matters is how you handle them. Do not use more capital to chase losses, as this often leads to greater losses. By understanding each of these steps and terms, beginners will be more prepared and focused in trading coins on Binance futures. Always remember: education, risk management, and discipline are the keys to successful trading in the crypto market.
Note: always analyze the market carefully, do not use emotions and feelings in futures or you will lose everything and learn from small capital and do not rush. Hope this is useful #TipsTradingFutures
