There are numerous crypto trading strategies that are explained through the Internet. Some are easy and require you to purchase the assets and keep them until they appreciate in value. Certain strategies require more knowledge and lots of practice. Large crypto platforms like , KuCoin, Binance, etc. provide numerous tools to making money on the market for cryptocurrency. A few of these well-known tools is the trading of Crypto Futures that we will explore within this post.
The Essence Of Crypto Futures Trading
If you’ve got an initial small sum of cash to put aside, you could increase it with the trading of crypto futures. In reality, when you trade futures, you don’t necessarily buy assets, rather you purchase contracts. The contract specifies details of the date expiration as well as the cost of the asset you are claiming at the time of expiration. You can sort of know the price of the asset.
Therefore, it is essential when trading futures to be aware of the future market changes and your options to choose whether the rate will decrease or increase. It is actually speculation on the price.
There are two options for Crypto Futures Trading:
- Long
- Short
“Long” signifies that you’re confident that the price of the asset will increase in the near future, which is why you purchase derivative contracts for the “long time period”. If the contract is due to expire, and you realize that the rate of the currency actually increased, which means that you were right in your forecast and you earn income.
Another method alternative is another option is to “go shorter”. In the same way, you sign an agreement that states that the price of the asset will fall. When the time comes and the rate declines, you will receive a profit because you were correct in your prediction. In this context, let’s examine the most well-known instruments for Crypto Futures trading are.
Crypto Assets For Trading Futures
As previously mentioned successful futures trading demands an understanding of the market. When choosing an asset, be sure to pay particular attention to stable and reliable projects. The more stable an assets is stable, the simpler you will find it to anticipate the price fluctuation. BTC futures are among the most sought-after due to the fact that Bitcoin is the top crypto asset across all assessments; it is also the most liquid and has the highest liquidity, and also the highest capitalization in addition. It is possible to include these crypto currencies on this list:
- Ethereum
- Cardano
- Binance Coin
- Solana
Today’s most promising digital assets with deep technological roots and a variety of user-cases and are in the top positions on the market. This makes it easy to forecast their future growth. Note that in order to create an accurate prediction, you need to study the project as well as its closest plans as it directly influences their price.
The Advantages of Trading Futures
Here are some benefits of trading in cryptocurrency futures:
- You can increase your capital. Even if you only have an initial sum you could leverage that multiplies it numerous times. You can select any leverage you want – such as X2, X10 or X50 and X100. But, it is important to remember that the higher leverage you choose the more you risk in the event that your forecast doesn’t be true. We recommend beginning with a small leverage.
- Futures contracts for market trading allow you to earn on both downward and up market trends. If you believe that the rate of this asset is going to drop and you want to take it, you can create “a position that is short” position.
- If you’ve got the necessary experience and knowledge Futures trading can be used to hedge risk. When you choose the leverage, you know the distance you’re willing to go, and the amount you’re willing to risk in the event of failing.
Where Can I Practice Market Crypto Futures?
In the first part of this article, we’ve provided a list of reputable cryptocurrency platforms that permit futures trading in crypto. The most popular of these is BIT. It is among the largest crypto platforms in Europe with more than two million users registered. There are more than 400 exchange pairs.
The platform extends the range of options for futures trading and also offers the lowest costs for futures contract. Additionally, in which asset prices remain close to spot market price. This is made possible by the unique financing mechanism used by the platform. What is the mechanism behind it? Based on the traders’ positions the payouts are made according to exact timeframes and pre-agreed in contracts. The traders who opened an “long” position are paid by traders who switched to “short” and reverse.
Demo trading doesn’t require the direct investment of your funds. The only currency you use is the one that’s domestic. specifically designed to be used for demo trading. They aren’t lost when your strategy doesn’t succeed and you can’t withdraw them when you achieve. If you practice demo trading futures, test different leverage levels and test how it performs. There are numerous things you’ve not observed when studying the theory behind futures trading. A demo account can expose every flaw in your strategy, which means you’ll be ready to start trading with real money, and you will feel more secure.
