Altcoins Talks - Cryptocurrency Forum
Crypto Discussion Forum => Cryptocurrency Trading => Topic started by: TradeCoinD2 on September 20, 2023, 07:19:43 AM
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1. What is Future?
Futures, also known as futures contracts, are a form of derivative trading. Futures allow investors to speculate on the price movement of a currency without owning that currency.
=> Therefore, futures trading provides opportunities for profit in both rising and falling price markets.
2. Cross and Isolated Margin - What are they?
Cross Margin: Using the entire balance in your margin account to prevent the liquidation of open Long/Short positions (high risk, high reward).
Example: Your account has $1000. You enter a trade with $100, but you can lose the entire $1000.
Isolated Margin: You can only lose the amount you have deposited as collateral and protect the remaining funds in your account (lower risk).
Example: Your account has $1000. You enter a $100 trade, and you can only lose $100. The position will close automatically.
3. Scalping in Future - What is it?
Scalping involves making quick trades with short timeframes, often with profit targets of 20-30-50% or more if using high leverage.
Pros:
Quick profit realization, suitable for those who prefer quick gains.
Short stop-loss, helps protect your capital and profits.
Can generate profits in sideways markets.
Cons:
High stress, especially if you can't react quickly to market changes.
Requires continuous chart monitoring and knowledge of volume and charts.
4. Leverage Ratio (Leverage)
It is the ratio between the price at which you place an order and the margin you have to deposit to place that order.
Example: Leverage is 100x. If you place a $10 USDT trade, you can open a trading position worth $1000 USDT. In simpler terms, you invest 10% for such a trade.
5. Funding Rate
The funding rate is the interest rate that makers pay to takers in perpetual futures contracts. It prevents the price of the futures contract from deviating significant from the underlying index price. It is recalculated multiple times a day, usually every 8 hours.
6. Maintenance Margin
Maintenance Margin is the minimum value you need to keep your position open. The larger your position, the higher the maintenance margin requirement. To avoid auto-liquidation, you should monitor your current Margin Ratio, and if it reaches 100%, your positions will be liquidated.
7. Contract Liquidation
Since futures contracts don't have a specific expiration date, they are only terminated when the user closes the contract or it is liquidated due to exceed the leverage limit.
8. Mark Price and Last Price
To prevent sudden spikes and unnecessary liquidations during high volatility, exchanges use the Mark Price and Last Price.
Last Price: The most recent price at which the contract was traded, used to calculate actual profit and loss.
Mark Price: Used to prevent price manipulation. It is calculated using data from various spot exchanges.
9. Common Future Orders
Limit Orders (Recommended): Place orders at a suitable price, and they execute when matched.
Market Orders: Buy/sell at the current market price.
Stop Limit Orders: Set two prices, expected and undesired. If the market touches either, it will automatically stop the trade.
10. Risk Management and Capital Management
*During a downtrend, use only 10% of your total assets for trading to gain experience and profits.
*Limit each trade to 10% or less of your total trading capital (10% of your net worth) for peace of mind.
*If you experience consecutive losses, take a break to avoid impulsive and emotional decisions.
*Once in a profit, move your stop-loss to a positive 1-2%.
*Consider closing trades at appropriate take-profit levels before entering.
NOTE: Trading in futures carries a high level of risk and requires knowledge, discipline, and emotional control. Always trade responsibly and consider your risk tolerance.
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Thanks the post really helpful mostly for new traders. But this post would have been more better if posted in learning trading board. That would made it easy for traders to acess easily. Yeah to do future trade all that you names about controlling emotions, knowledge, discipline is just the true fact without those you won't be able to control your losses and please mind the kind of leverages you use, because higher leverage brings bigger profit that's how same time brings bigger losses, so use it wisely to avoid unnecessary losses.
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Thanks the post really helpful mostly for new traders. But this post would have been more better if posted in learning trading board. That would made it easy for traders to acess easily. Yeah to do future trade all that you names about controlling emotions, knowledge, discipline is just the true fact without those you won't be able to control your losses and please mind the kind of leverages you use, because higher leverage brings bigger profit that's how same time brings bigger losses, so use it wisely to avoid unnecessary losses.
You are right that it is important to control your emotions... have knowledge... and be disciplined when trading. If you dont have these things... it can be hard to handle losses well. Leverage is a strong tool that can make your profits and losses bigger. It is important to use it wisely and think about the risks. By the way Thank you for sharing your thoughts and I hope you keep finding helpful information and support in our trading journey.
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1. What is Future?
Great job brother Make a plan for the future identify your objectives and work consistently and tenaciously toward achieving them. Think on the future decide what your goals are then move forward with them. Keep a close eye on your development and revise your strategies as needed to ensure success. Keep it up bro
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Well I find it quite risky as One distinctive feature of futures trading is the availability of leverage. Leverage allows traders to control a larger position with a relatively smaller amount of capital. While leverage can amplify profits, it also increases the risk of significant losses.
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Yes to your topic question
Anything that can get you rich quick can make one poor immediately.
Your research and knowledge is well thought out but i believe doing spot is the safer route. I know with knowledge,experience and skill one can gain more from future trading but for how long, would the accumulated loss be worth it?
Keeping emotion in check personally to me is one of the important method to survive future.
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Well I find it quite risky as One distinctive feature of futures trading is the availability of leverage. Leverage allows traders to control a larger position with a relatively smaller amount of capital. While leverage can amplify profits, it also increases the risk of significant losses.
Goes to tell us that nothing is ever free even in a supposed or real Freetown.
Leverage is actually one of the best features of futures trading, alongside the stop loss and take profit feature.
Leverage is one way to go from being broke to becoming a millionaire simply by buying and selling bitcoin and other crypto assets.
But then, the downside is that, that same way it is the quickest way to make good money from day trading, it is also one of the fastest way to loose money.
Leverage is like borrowing money from the exchange or broker to join to the one you have and carry out trade, but the only way the exchange or broker will accept to lend you that money is that, you agree that immediately the market is not going the same way you have predicted it to go, you will be cut out(liquidated) way sooner than it should or would have been if you were trading without a leverage, but another truth is that, without leverage, to make good money from trading, one would have to pour in a good amount of money.
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Well, I find it quite helpful because it helps traders to analyze and predict what the future might hold, but even the professionals or experience traders can't be sure of their prediction.
However they only makes decision base on the information availabe.
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OP I appreciate the fact that you did take your time to formulate this interesting and educative material and making it available for all to see including the newbies who find their way here. I have gone through your write up and I must commend you for your efforts. But I think you should be able to put your source so we could read further because I believe it was a combined efforts through which you were able to come up with this material. So it would be nice you put up your source so that anybody who want to learn more could read further.
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Trading is not as easy as we do say it, because the market can go the other side and you will get liquidated. Future trading is a get rich quick scheme if you understand the market before entry and have your own trading strategy. At the same time, it can make you run at big loss instantly, and that is why you should only use the amount of money that you can afford to lose when trading so that you will be able to control your emotions. Like the OP said 10%-1% is a good one for a trial. The risk is trading makes it more difficult to make profit from trading most times, but when you have a good risk management, it can be helpful.
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Futures trading is only suitable for people with strong hearts and high risk tolerance. It is not suitable for all users, because it requires great experience, good reading of the market, continuous monitoring of the market, and rapid interaction with variables to prevent losses before they occur.
Therefore, I personally prefer to use spot trading because it is safer, and I advise all beginners in trading not to engage in futures trading before understanding the market well.
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Thank you for this useful post. There are many of us who know nothing about futures trading. Surely a lot is known about future trading through this post. Those who want to do futures trading in future must follow your post.
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I've been trading for many years and I still learned new things in this post. I found this post helpful to those beginners who want learn trading because this is a basic knowledge which really needs to avoid future problems in the future. Example you are going to execute your first trade but you didn't change to isolated margin mode because you didn't know what it really is and you forgot to put a stop-loss, it will risk your total funds.
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I learned about Future but found it does not suit my current investment taste. Large leverage requires strict management and consumes more time + mind. I prefer Spot trading, at least it reduces psychological pressure and I can focus on doing other more important things in life.
In the future, maybe I will try to spend part of my capital to trade Futures and get its chance 😊
P/s: you should not use CAPS for topic titles, this is considered less friendly for the forum.
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Trading is very risky then again if a trader plans to do futures trading then it goes without saying that he is trading with maximum risk. If spot trading is done without proper understanding of trading, then there is a possibility of major loss in that trading, if there is a little mistake in future trading, the entire money can be lost. If we start trading with 100 dollars and take leverage 5 then 100 dollars will give me double profit in that case our maximum profit target will be 40 to 50 dollars we are taking maximum risk of 100 dollars to earn 40 to 50 dollars. I have already taken a lot of risk in the hope of extra profit and the risk has lost more money than the profit so to me now this futures trading seems like gambling.
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Futures trading is only suitable for people with strong hearts and high risk tolerance. It is not suitable for all users, because it requires great experience, good reading of the market, continuous monitoring of the market, and rapid interaction with variables to prevent losses before they occur.
Therefore, I personally prefer to use spot trading because it is safer, and I advise all beginners in trading not to engage in futures trading before understanding the market well.
Future trading is too risky, it is just for people who have a lot of experience in crypto trading. It also requires a strong mentality because we are possible to lose all the money in a short time. People who feel afraid of losing money won't fit with future trading.
Sure, it will be always recommended to trade in spot market. Spot market fits for any people, it is safe enough because we won't immediately to lose all the money. Although we fail to get the target and the price drop drastically, we only can end up with the drop of the value of the coins. If it is top coin, we can keep it and wait for the next pump.
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I've been trading for many years and I still learned new things in this post. I found this post helpful to those beginners who want learn trading because this is a basic knowledge which really needs to avoid future problems in the future. Example you are going to execute your first trade but you didn't change to isolated margin mode because you didn't know what it really is and you forgot to put a stop-loss, it will risk your total funds.
For me, just reading theory without direct practice will be very useless. It is better to practice future trading directly with small capital; it will be safer, and of course you will know how the movements that occur in future trading will be very different from spot trading. The stop-loss feature Not all exchanges provide such a function; only some exchanges with a very large number of users may provide such a feature.