#FollowTheLeadTrader
Futures trading involves buying or selling contracts that speculate on the future price of an asset, such as cryptocurrencies, stocks, commodities, or indices. In crypto futures, traders can go long (betting the price will rise) or short (betting the price will fall), often using leverage to amplify gains (or losses).
Key Aspects of Futures Trading
1. Leverage – Borrowed funds to increase position size (e.g., 10x leverage means a 10% move can double or wipe out your capital).
2. Liquidation Risk – If the market moves against your position too much, your trade may be liquidated.
3. Perpetual vs. Expiry Contracts – Some contracts expire at a set date, while perpetual contracts (common in crypto) never expire but use a funding rate to balance prices.
4. Funding Rate – A periodic fee exchanged between long and short traders to maintain price alignment with the spot market.
5. Market vs. Limit Orders – Market orders execute