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Steps by Step to Trade Futures on Crypto Exchange (FULL GUIDE TO FUTURES TRADING)

Steps by step to trade futures on crypto exchange, Common futures trading, What is futures trading, Crypto exchange to trade futures, Important aspect while trading futures, Full guide to futures trading 

How to Understand Crypto Futures Trading | On This Page You’re Going To Understand Everything You Need To Know To Start Crypto Futures Trading On any Crypto Exchanges. 

Steps by step to trade futures on crypto exchange


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What is Futures Trading 

Futures trading is a type of derivative trading that allows investors to speculate on the future price of a commodity, financial instrument, or index. Futures contracts are agreements to buy or sell an underlying asset at a specified price on a specified date in the future. 
These contracts are traded on a regulated exchange, where buyers and sellers can trade futures contracts to hedge their positions or to make a profit from price movements.

Cryptocurrency Exchange to Trade Futures

1. Binance: You can trade futures on Binance. JOIN BINANCE 

2. Bybit: You can trade futures on Bybit. JOIN BYBIT 

3. Whitebit: You can trade futures on Whitebit. JOIN WHITEBIT 

4. SuperEX: You can trade futures on SuperEX. JOIN SUPEREX

5. Kucoin: You can trade futures on Kucoin. JOIN KUCOIN 

6. OKX: You can trade futures on Okx. JOIN OKX

Common Futures Trading Asset 

The underlying assets that are commonly traded in futures markets include commodities such as agricultural products, energy products, and precious metals, as well as financial instruments like currency and stock market indexes.

Futures trading allows traders to take advantage of leverage, which means they can control a large position with a relatively small amount of capital. 

This can lead to the potential for large gains or losses, depending on how the price of the underlying asset moves. Because of this, it’s important to have a solid understanding of the risks involved and use appropriate risk management strategies when trading futures. 

Futures trading can be used for both hedging and speculative purposes. Hedging is a strategy that involves offsetting the risk of an existing position by taking an opposite position in the futures market.

For example, a farmer might use futures contracts to lock in a price for their crops in order to hedge against price fluctuations. Speculative purpose is when a trader aims to make profit from price movements by buying or selling the contract with expectation for future price movements.

General Overview Steps Involved To Trade Futures On a Crypto Exchange 

Here is a general overview of the steps involved in trading futures on a cryptocurrency exchange:

Steps by Step to Trade Futures on Crypto Exchange

  1. Sign up for an account on a cryptocurrency exchange that offers futures trading. This will typically involve providing your personal information and passing KYC (Know Your Customer) and AML (Anti-Money Laundering) checks.

  2. Deposit funds into your account. This can usually be done using a bank transfer or by depositing cryptocurrency.

  3. Navigate to the futures trading section of the exchange.

  4. Select the cryptocurrency that you want to trade futures for.

  5. Choose the type of futures contract you want to trade, such as a quarterly or perpetual contract.

  6. Set up an order to buy or sell the contract at your desired price. This can usually be done using a market order or a limit order.

  7. Monitor your position and adjust your order as necessary.

  8. Close your position when you want to exit your trade.

Please note, the steps may vary slightly depending on the exchange you choose, the crypto asset you choose and the type of futures contract you choose.

It’s also worth mentioning that before you trade futures, you should understand the differences between futures and spot markets, in order to make better informed decision and manage your risk properly.

CHECK ALSO: How to Create SuperEX Exchange Account

Important Aspect While Doing Futures Trading 

Here are a few additional details to consider when trading futures on a cryptocurrency exchange:

  1. Margin requirements: Futures trading typically involves the use of margin, which means you can trade more than you have in your account. Be sure to understand the margin requirements for the contract you’re trading, as well as the exchange’s policy on margin calls and liquidation.

  2. Leverage: Futures contracts can be traded with leverage, which means you can control a large position with a relatively small amount of capital. Be aware that high leverage can lead to large losses as well as gains, and you should always consider the amount of leverage that you’re comfortable with and manage your risk accordingly.

  3. Contract expiration: Different types of futures contracts have different expiration dates. For example, a quarterly contract will expire at the end of the quarter, while a perpetual contract has no fixed expiration date. Be aware of the expiration date of the contract you’re trading and close your position before the contract expires.

  4. Volatility: The crypto market is known for high volatility, and the price of crypto assets can change significantly in a short period of time. Keep an eye on the price charts, and consider using stop-loss orders or other risk management strategies to protect your position.

  5. Understand the legal and regulatory environment. each country have different laws, regulations and policies around cryptocurrency trading, including futures trading. Therefore, it’s important to stay up-to-date with the laws and regulations in your jurisdiction and only trade with a reputable exchange that is compliant with those laws.

  6. Have a trading plan, including an understanding of your risk tolerance, profit targets, stop loss, and any other rules that you have established for yourself.

  7. Continuously monitor the markets and stay informed about any news or events that might impact the price of the crypto assets you’re trading.

In short, futures trading can be a powerful tool for managing risk, but it’s important to approach it with caution and a solid understanding of the risks involved. Always make sure you understand the terms and conditions of the contract you’re trading and use appropriate risk management strategies. 

ALSO: How to Create WhiteBit Exchange Account


Here are a few more things to consider when trading futures on a cryptocurrency exchange:

  1. Basis risk: Basis risk is the risk that the price of the underlying asset (in this case, the cryptocurrency) will move differently from the price of the futures contract. This can happen if there is a significant difference between the spot and futures price of the asset, known as a basis.

    1. As a result, it is important to be aware of the basis and monitor it as you trade.

    2. Counterparty risk: As in any form of trading, counterparty risk is the risk of the counterparty (i.e. the exchange) defaulting on its obligations to you. To mitigate this risk, you should always trade on reputable and well-regulated exchanges, and be aware of the financial health of the exchange. 

    3. Funding rate: Futures contracts are settled on a daily or periodic basis. To maintain this, the exchange may charge a funding rate to long position holders or pay out to short position holders, depending on the interest rate of the crypto asset. Be aware of the funding rate and how it may affect your position over time.

    4. Liquidity risk: When trading futures, it’s important to consider the liquidity of the contract you’re trading. High liquidity generally means it is easy to buy and sell the contract with minimal price impact, whereas low liquidity can make it more difficult to trade and cause wider bid-ask spreads.

    5. Hedging: Futures trading can be used for hedging, a strategy that involves offsetting the risk of an existing position. For example, a miner of Bitcoin may want to hedge against the price of Bitcoin going down by shorting Bitcoin futures. It’s important to be aware of the different uses of futures and how they can be used in your trading strategy.

    6. Take time to learn about the order types available to you on the exchange. Most exchanges have a variety of order types, including limit orders, stop loss orders, and market orders. Understanding these different order types and how to use them can help you to better manage your risk and improve your trading results.

    7. Stay informed and up-to-date with the latest crypto market news and developments. Cryptocurrency markets can be highly influenced by events, announcements and news, keeping an eye on the latest developments can help you make better trading decisions and improve your results.

Trading futures on a cryptocurrency exchange can be a complex process, but with proper understanding and risk management, it can be a powerful tool to help you achieve your investment goals. It’s important to approach futures trading with caution, research, and a well-defined trading plan.

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