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A complete guide to future trading in cryptocurrency
The world of cryptocurrency has exploded in the last ten years, with a growing community of traders and investors looking for new ways to profit from this rapidly evolving market. One of the most popular and profitable trading options for cryptocurrency enthusiasts is Futures’ negotiation on cryptocurrency exchanges. In this article, we will deepen the trading of futures on cryptocurrency, covering key concepts, strategies, risks and best practices for navigating this complex market.
What are the Futures on cryptocurrency?
Futures on cryptocurrency are contracts that force participants to purchase or sell a specified amount of cryptocurrency at a fixed price in a future date. This type of trade allows traders to speculate on the direction of the cryptocurrency market, cover potential losses or capitalize on earnings. Unlike Spot Trading, in which you buy and immediately sell cryptocurrencies, Futures Trading involves detention positions for a long time.
Types of futures on cryptocurrency
There are different types of futures on cryptocurrency, including:
- Futures Spot : Buying or selling a specific amount of cryptocurrency at the current market price.
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- Futures based on options : exchanges between the buyer and the seller of the right to buy or sell a certain amount of cryptocurrency, with an expiry date.
- Futures based on the index: future contracts linked to a specific cryptocurrency index, such as the Bitcoin price.
How to exchange futures on the cryptocurrency
To exchange future cryptocurrency, follow these steps:
- Choose an intermediation platform
: respectable exchanges and brokers for research that offer a future trading on cryptocurrency. Some popular options include bitmex, binance and coinbase.
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- Select the market and the size of the contract : choose the specific market and the size of the contract that you want to trade (for example, Futures Bitcoin, Bitcoin index).
- Put a trade : use an online trading platform or bees to perform your job. It is also possible to use automated trading software.
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Key concepts
Before immersing yourself in the Futures trade on cryptocurrency, it is essential to understand the following concepts:
- Risk management : Set the limits of clear stop-performance, the sizing of the position and the lever relationships to manage the risk.
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- Decay of the time : Find out how time affects the value of your positions as they mature.
- Level : use the lever sparingly or not at all, as it can amplify both the gains and the losses.
Futures trading strategies on successful cryptocurrency
To be successful in Futures Trading on cryptocurrency:
- Diversify your portfolio : disseminate your investments in multiple markets and cryptocurrencies to minimize the risk.
- Develop a trading plan : establish clear objectives, strategies and risks management techniques based on the understanding of the market.
- Stay informed : Stay up to date with news, trends and technical analysis of the market.
- Be patient : cryptocurrency markets can be volatile; Avoid impulsive decisions based on emotions.
Risks of Futures Trading on cryptocurrency
While the trading of future cryptocurrencies offers numerous advantages, there are risks to consider:
- Risks of liquidity : the high volatility of the market can lead to liquidity problems, with consequent delayed or lost shops.
- Risk of counterpart : negotiations with unregulated exchanges or brokers increase the risk of default.
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