What is Futures Trading?
Cryptocurrency futures trading is a trading method based on derivatives contracts, which promise to buy or sell an asset at a specific price at a set point in time. Perpetual trading, as described in Coinness Trading, has no expiration date, and traders can open or close a position at any time. Futures trading also has a two-way profit structure, allowing traders to go long when the asset price is rising and short when it's falling, and leverage from 1 times to 100 times, allowing traders to trade small to large, with profits and losses determined by the entry price and exit price.
💡Perpetual futures have no expiration date and can be traded freely, but may be subject to periodic funding fees. Traditional futures are traded for a set period of time, and at expiration, the contract is closed and realized profits or losses are locked in.
| Period | Perpetual Futures (Perpetual Futures) | Traditional Futures (Traditional Futures) |
|---|---|---|
| Expiration Date | None | Yes (e.g., 1 month, 3 months, etc.) |
| Position holding period | Can be held indefinitely without expiration | Automatically liquidated or realized at expiration date |
| Funding costs | Yes, costs are exchanged between long and short at regular intervals | None |
| Price-linked | Stays close to spot price (adjusted by funding fee) | May deviate from spot price based on market supply and demand |
| Flexibility | Flexible to hold/close positions | Requires a strategy within a set time frame |
| Most commonly used markets | Popularly used in cryptocurrency markets | Traditional financial markets and some derivatives exchanges |
Getting started with futures trading
1. Create an exchange account and log in
• You must read and agree to the exchange's Terms of Use, Privacy Policy, Futures Trading Terms and Conditions, and Risk Statement.
• Complete KYC Step 1(verification of identity). You can verify using your national ID, driver's license, passport, etc.
2. Deposit assets to your funding wallet
• Deposit cryptocurrency to your regular wallet (funding wallet) first.
• The deposited assets must be transferred to your futures wallet before they can be used for futures trading.
3. Start Trading Futures
• Select a trading pair (e.g. BTCUSDT)
• Set your desired leverage
• Select a long or short position
• Specify entry and exit prices and execute the trade
Futures trading precautions
Futures trading is a high-risk, high-reward instrument. You should be aware of the following:
• Risk of total loss : You can lose your entire investment.
• Leverage risk : The higher leverage you use, the more you can lose on small price movements.
• Liquidation : If your assets fall below your maintenance margin, you may be automatically liquidated.
• Market volatility : The cryptocurrency market can experience extreme price fluctuations.
⚠️ Investment decisions should be made at your own discretionand risk, and you should understand and educate yourself before trading.
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📄 Related Articles
→ KYC Level 1 Verification(proof of identity)