FUTURE TRADING:
Futures trading involves buying or selling a financial contract that promises the transaction of an asset at a set price at a future date. These contracts are based on the price of cryptocurrencies like Bitcoin, Ethereum, or other tokens. In simpler terms, you're predicting whether the price of a cryptocurrency will go up or down, but instead of trading it right away, you're making a deal for the future.
How It Works
1. Leverage: One of the key features of futures trading is leverage. This means you can borrow money to trade a larger amount than you actually hold. For example, if you use 10x leverage, you can trade $1,000 with just $100 of your own money. While this can multiply your profits, it also increases the risk of losses, so it's important to be cautious.
2. Long or Short: In futures trading, you can either go long or short. If you believe the price of a cryptocurrency will rise, you go long (buy). If you think it will fall, you go short (sell). You make profits if your prediction is correct.
3. Margin: To enter a futures trade, you need to deposit a certain amount of money as collateral, called margin. Binance calculates how much margin is required based on the leverage you choose. Make sure you're aware of this amount before starting a trade.
4. Expiration Date: Some futures contracts have an expiration date, meaning they will be settled on that date, whether the market has moved in your favor or not. On Binance, you can also trade perpetual futures contracts, which don't have an expiration date. This means you can hold your position as long as you want, provided you manage.
How to Start Futures Trading on Binance
1. Create an Account: If you don't have a Binance account yet, you'll need to sign up. After verifying your identity, you're ready to start trading.
2. Enable Futures Trading: Once your account is set up, navigate to the 'Derivatives' section on the Binance homepage and select 'Futures'. Before you begin, you'll need to read through the risk disclaimer and confirm you understand the risks involved.