How to Trade Futures on Binance

Futures trading is intended for professionals in the cryptocurrency market and involves financial risks. If you are ready to give it a try and have trading capital that you can afford to use, let’s see how to do it.

First of all, you will need a Binance account. When you already have an account, you need to open a futures account in it. To do this, go to the futures section, and click on the “Open now” button after reading the risk warning.

Before you start real trading, you can practice on a demo account – that is, on a fake account that does not contain your real money. Binance provides a dedicated service for this.

Ready to fund your account? Deposit funds to the main account in any convenient way. Then find the “Transfer” button on the futures page and enter the amount and also confirm the transaction. Funds will immediately go to the futures wallet.

Binance Trading Terminal

If you have previously used trading terminals of various exchanges, then you will not have problems here. Here, you can find all the necessary settings and information.

  • The top panel of the terminal. Here you can see the leverage used (x20 by default), the marked price, the time left until the end of funding, the queue for auto-deleveraging, as well as the daily trading volume and volatility.
  • Price chart – works in real time.
  • Trading activity panel. It is located at the bottom of the page and allows you to switch between open positions, trading history, and other indicators.
  • Terminal for transactions. Located at the bottom right. Here, you can select an order, create a deal, replenish a futures wallet or view the size of the trading commission.
  • Order book. It is located to the right of the price chart and allows you to track data on all orders in real time. To the right is a list of all trading operations on Binance Futures.

Leverage

You can choose the leverage you need for trading by moving the slider, which you will find in the top panel of the terminal. The maximum leverage available on Binance is x125. At the same time, the amount of available leverage also depends on the size of your position. The more funds you invest in a trade, the less leverage available. This allows you to reduce the risks when trading large amounts.

Do not forget that the use of leverage greatly increases the risks of the transaction. If you are a beginner, take your time to increase it. Even the standard x20 can be quite dangerous in a volatile market.

Marking price

There are two price tiers on Binance Futures that can be equal. This is the mark price and the final price.

The final price is taken from the order book, from the last contract sold. It is used to calculate your profit or loss.

The marked price is used by the exchange to counter market manipulation. It is calculated on the basis of data from several spot exchanges and determines the time to liquidate the transaction.

When placing stops, you can choose which price you will use.

Orders on Binance

We have already talked about the types of orders available on the crypto exchange: limit, market, and stops. They can also be divided into several types.

For example, in addition to the classic limit order, you can create a profit-taking limit, better known on the exchanges as a take profit. It allows you to fix the profit from the transaction automatically if the price reaches the specified level. Also, take profit can form on the basis of a market order.

Stop loss is similar. It can be limit and market. Many strategies tell the trader to use both take profit and stop loss. Please note that on Binance, if the stop is triggered, you must manually delete the take profit order. Otherwise, it will remain active.

Liquidation

You need a maintenance margin to keep your trades active. The more funds in transactions, the more it is. If you do not have enough funds on your balance for it, the positions will be canceled. This is liquidation.

Liquidation risk on Binance is measured as a percentage, so it is easy to track. You need to make sure that it does not reach 100%. If you are close to liquidation, it is better to close positions manually to avoid additional fees.

If the amount of funds on the balance falls below zero, the insurance fund pays off the debt. However, during periods of high volatility, it may not be able to cope. In this case, the exchange begins to reduce your open positions, starting with the most profitable ones with the largest leverage. Always keep an eye on the situation and stay prepared.

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