The Key to Successful Futures Trading 1: Master the Basics

Mastering the Structure, Procedures, and Essential Concepts of Futures Trading

Crypto futures trading is not just a game of predicting price movements. Fully understanding the structural characteristics, step-by-step procedures, and basic concepts is the first key to success.

How Futures Trading Works

Crypto futures trading involves trading derivatives contracts that allow you to buy or sell an underlying asset (like Bitcoin) at a predetermined price at a specific time (or with no expiration for perpetual futures). Perpetual futures have no expiry date, allowing entry and exit at any time, and enable profit opportunities in both long and short positions.

Example: In the BTC/USDT pair, go long if you expect the price of Bitcoin to rise, or go short if you expect it to fall. The biggest difference from spot trading is that you can profit regardless of market direction.

-> [What is Futures Trading?]

Step-by-Step Practical Process

  1. Create and log in to your exchange account, complete KYC Level 1 verification (using ID card/driver’s license/passport)

  2. Deposit crypto into the funding wallet → transfer to the futures wallet

  3. Select a trading pair, set your preferred leverage (up to 100x)

  4. Choose long/short position, enter entry price, liquidation price, and order type (limit/market, etc.)

  5. After entering the position, monitor real-time order status, profit/loss, and liquidation price

  6. After closing the trade, review your asset status and transaction history carefully

Key Terms and Concepts You Must Know

 • Leverage: Ranges from 1x to 100x. Allows larger trades with smaller capital but increases risk of loss and liquidation proportionally.

 • Margin: A portion of your funds used as collateral to open a position. If insufficient, additional deposit is required or liquidation may occur.

  -> [What is Leverage?]

  -> [What is Margin?]

 • Liquidation: If your margin falls below the maintenance level, the exchange will forcibly close your position, potentially seizing part of your funds.

  -> [What is Liquidation?]

 • Funding Fee: In perpetual futures, a periodic fee exchanged between long and short positions to keep the futures price close to the spot price (separate from trading fees).

 • Using the Order Book: Real-time order details and market liquidity analysis are essential.

  -> [What is an Order Book?]

Key Checkpoints & Mistake Prevention Tips

 • KYC and agreement to terms are required — prepare documents in advance

  -> [KYC Level 1 Verification (proof of identity)]

 • Be careful not to confuse deposit-transfer routes or wallets (funding vs. futures)

  -> [Guide to wallet types: Funding wallets and futures wallets]

 • Adjust leverage cautiously — high leverage means high risk

 • Always monitor your trading history and position status in real time

 • Before live trading, practice with demo trading or small amounts