Cryptocurrency futures: what you need to know when starting trading

Working with cryptocurrency futures has a number of differences from spot trading. Initially, they do not involve the purchase, sale or holding of crypto assets for the purpose of storage. Instead, a contract is bought / sold, which reflects the value of the coin at a specific date in the future. Today, the Bitcoin coin is the most futures cryptocurrency. The presented tool makes it possible to speculate on the future value of the coin. You can open a long position for an increase in price or a short position for a decrease in value.

Opportunities that provide users with cryptocurrency futures

One of the main characteristics that is characteristic of the instrument in question is the use of leverage. This makes it possible to increase the efficiency of the invested capital, since you do not need to use it in full.

  • Please note that if you choose crypto futures may increase the potential profit or increase the risks. Traders should initially decide on a convenient amount of leverage.
  • Beginners are not recommended to use this approach, because without a properly built strategy, there is a risk of losing much more than you currently have.
  • Leverage allows you to use futures transactions as a hedging tool for a portfolio of crypto assets.

Investing in futures for Bitcoin and other coins opens up many more opportunities for further portfolio growth. In a single trade, leverage can both increase profitability and increase losses.

Key Steps to Getting Started in Bitcoin Futures Trading

In order for the trading of crypto assets, including BTC, to bring as much profit as possible, it is important to adhere to the following algorithm:

  • Define a trading strategy specifically for yourself.

To do this, first consider what type of trader you would consider yourself to be, your financial goals, and your tolerance for losses. In addition, set the optimal trading parameters, evaluate the effectiveness of each parameter.

  • Develop a trading plan.

When compiling it, accurately set the parameter for entering and exiting a position, position sizes, and the probability of using stop losses. Following the plan will protect against impulsive decisions and help to clearly allocate funds.

  • Set boundaries for further effective risk management.

Determine what indicators will become acceptable and unacceptable losses for you. To do this, it is important to carry out complex analytical work using the data panel. The largest cryptocurrency exchange in Europe, WhiteBIT, offers an advanced analytical panel, which makes it easy to form a trading strategy.