With Binance Futures Tournament is near we like to educate our fellow beginner traders with future trading basics throughout some articles. This is a simple and effective article to understand some basics of future trading. Before you put your foot on the warzone read the article to clear your basic doubts
1. Understand the Terminology: ๐
Before embarking on your future trading journey in the crypto world, it's important to familiarize yourself with the key terms:
A. Cryptocurrency Futures: Financial contracts that enable traders to speculate on the future price movements of digital currencies, such as Bitcoin, Ethereum, or Litecoin. ๐๐ฑ
B. Long Position: Taking a bullish stance by buying crypto futures with the expectation that their value will increase over time. ๐๐
C. Short Position: Adopting a bearish stance by selling crypto futures with the anticipation that their value will decline. ๐ป๐
2. Choose a Reliable Exchange: ๐ฆ
Selecting a reputable cryptocurrency exchange is paramount to ensure a secure and reliable trading experience. Look for exchanges that offer futures trading options for cryptocurrencies, such as Binance Futures, okx, ByBit or Kraken Futures. โ ๐
3. Leverage: ๐๐
Trading leverage allows you to control a larger position in the market using a smaller amount of your own capital. It's like borrowing money from your broker to amplify your potential profits. However, it's important to note that leverage also increases the risk of losses, so it should be used carefully and with a thorough understanding of the associated risks.
Example - If You have 100$ in your wallet and you using 2x leverage your total position now worth 2x100$ = 200$ and you just borrowed 100$ From that Exchange/provider. But it's a two way sword while you can enjoy every 1% growth as 2% as you put 2x leverage so you have to bear 2% loss on every 1% decline. ๐ช๐ก
4. Manage Risk and Set Stop-Loss Orders: โ ๏ธ๐ก๏ธ
Crypto markets can be highly volatile, so it's crucial to implement risk management strategies. Set stop-loss orders to automatically exit trades if the price moves against your position beyond a certain threshold. This helps limit potential losses and protect your capital. ๐ก๏ธ๐ฐ
5. Start Small and Learn from Experience: ๐ถ๐
As a beginner, it's wise to start with a small investment and gradually increase your position as you gain confidence and experience. Future trading in crypto is a continuous learning process, and by observing market behavior and analyzing your trades, you can refine your strategies and improve your performance.
Set a plan do first with 2-3% of your whole portfolio and use small Leverage. Remember learning From mistakes is a great process to be successful. ๐๐
ยฉ This article not sponsored by any third-party or Binance itself. The names are taken only for informative purposes. We don't promote any kind of trading practice where users can lost their money. Do your own reserch before putting money in Digital assets.
๐ Thank you for reading, and let's continue to explore the potential of Crypto together! This article is a part of #BinanceTournament so support my efforts by like & sharing this article and put your inputs in comments.
โฅ๏ธ If you stuck in trading, check out our posts for more. Our Technical Analysis will help you to win. For more head up to our profile. Till then #trade_safe friends.