Cryptocurrencies are known as the most volatile assets, for this market is still very young and subject to many factors that hit it. That may be external factors such as the situation with the world’s economy, inflation, etc., and internal factors such as:
- competition in the crypto market;
- demand and supply;
- news background;
- investors sentiment;
- the market trend;
- and others.
Crypto rates may change daily and every minute. It opens a lot of earning opportunities for investors, who make money using different trading strategies. They involve short trades that take a couple of minutes, daily trades, and some long-term investments that take from a couple of weeks to a couple of years. Depending on how an investor feels about this or that asset and based on his experience and readiness to take a risk, one picks the strategy.
In addition to strategies, there are some common trading tools, among which crypto futures trading holds a special place. Let’s talk about how and where to buy crypto futures.
What Does Futures Trading Stand For?
Futures trading belongs to derivative contracts that imply that parties make an agreement on purchasing and selling assets in the future. They claim the price for the asset and the day when they promise to fulfill their obligations.
This financial instrument allows traders to increase their investment portfolio on both dropping and rising market trends. How do they do that?
Suppose you did the research and estimated that the ETH price would increase in the future. So you would like to sell some ETH coins and generate income from them. So you make a futures agreement for selling your ETH coins and state the price and date when you will sell them. If your forecast is correct and the ETH rate really grows, you sell your coins and make money according to the contract. This type of crypto futures trading is called “long”.
Suppose you estimate the situation and conclude that the ETH rate is about to drop. You want to get rid of the coins you have before the price drops and then buy them back at a much lower rate. You make an agreement on buying ETH (again, claiming the day and the price), and if the rate really drops, you receive ETH back plus your earnings from selling them out. This method is called “short”.
Crypto futures trading is a highly profitable financial tool, however, to the same extent, risky because if the market moves in the opposite direction, you risk losing your position and funds. That is the reason why crypto futures trading is more popular among experienced traders.
These are the key terms for understanding futures trading:
- It is a tool that allows traders to borrow funds from a platform to increase the potential for profit. On the other hand, taking leverage means taking risks, and the more funds you borrow, the bigger risk you take. It is recommended to take minimal leverage for a start, for example, X5 or X10. Some platforms, like Binance, offer even an X125 leverage ratio. Keep in mind that if the market goes in the opposite direction, your position will likely be liquidated, and the bigger the leverage, the more likely it is.
- Market liquidity. Pick crypto coins with significant liquidity and market capitalisation, for they are less sensitive to trends and changes and are always in demand, so it is always easier to sell them.
- It’s not a secret that diversification of your investment portfolio is the best way to manage your funds. Open several futures trading contracts with different underlying assets.
- Expiration date. Futures contracts with expiration dates imply that you should receive or sell assets on the day when the contract expires. You can sell your contract to another person before it expires if you don’t feel like continuing. Some crypto platforms also offer perpetual contracts. That means you may keep your position and act depending on the market movement as long as you wish.
An important factor in success is picking a crypto platform that would support futures. There are many crypto futures exchanges on the Internet. Let’s list some and discuss the best of them.
What is the Best Crypto Futures Trading Platform?
Here is the list of top futures crypto exchanges with the best reputation:
- WhiteBIT
- Binance
- Kraken
- OkeX
- Huobi Global
- KuCoin
Picking a crypto platform for futures trading, pay attention to the following characteristics: liquidity, fees, leverage ratio, and support for popular crypto assets. Also, consider if there is a possibility to trade on a demo account. The fact is that even experienced investors sometimes face troubles when picking an appropriate leverage ratio. It would be good to have the opportunity to practice different leverage on a demo account. And we got a good option for you. It is the best Bitcoin trading platform, WhiteBIT.
What is WhiteBIT?
WhiteBIT is a young crypto platform which has proved its reliability. It is considered to be the best crypto trading platform, and there are many reasons to think so:
- It is an official and regulated exchange with registration and compliance with all the laws and requirements.
- It supports 450 traded pairs of the most promising digital assets.
- It allows fiat-crypto conversion and works with bank cards.
- WhiteBIT is focused on users’ safety and stores funds in cold wallets.
- Clients protect their accounts with two-factor authentication.
- It provides quality customer support 24/7.
- Average fees in the market – 0,10%. The fee is fixed.
The platform released its utility token – WBT, which has already shown good growth dynamics. Those who hold the WBT token receive discounts on trading fees and zero commissions on some products on the WhiteBIT platform.
WhiteBIT offers a wide selection of trading tools, including margin, leverage, futures and others. This is one of a few platforms that support perpetual futures trading contracts. These are futures agreements that have no end date. That means traders should not necessarily close their contracts, but they can keep their positions and, depending on the market trend, pay each other fees. Of course, in this case, the futures contract price is linked to the spot market. This option is financed from the WhiteBIT reserve fund. The platform has sufficient liquidity to offer a high leverage ratio.
WhiteBIT is not only a crypto exchange – it is the whole ecosystem and community of like-minded people who make this world better, expanding the adoption of digital assets. It offers a standalone resource – the WhiteBIT blog that allows traders to learn more about this field. There are many interesting articles and overviews of new projects in the market, analysis of up-and-coming cryptos, and guides which describe trading from the simplest buying assent to futures derivative contracts. Step by step, you can learn and practice at the same time using the WhiteBIT demo account to understand which leverage to pick for your futures trading and how much confidence you feel using this tool. Using demo tokens, you will soon understand if this or that type of trading suits you and learn to assess risks and trade with a cool head, which are crucial elements of successful trading.
