Futures contracts, or “future” in crypto, establish an agreement between two parties: a buyer and a seller.
One undertakes to buy and the other to sell a specific quantity of cryptocurrencyas the Bitcoin or Ethereumat a price and for a date fixed in advance.
Contrary to spot market where the exchange is immediate, futures allow speculate on the price of an asset without having to hold it.
Crypto futures are derivative products that amplify price movements throughleverage. They are available on many exchange platforms such as Bitget, BingX Or Mexc.
Their popularity is explained by the possibility of making significant gains with reduced starting capital. However, this is obviously accompanied by high risks which it is essential to master.
The risks associated with Futures trading on cryptos
Trading futures in cryptocurrency means significant risks for your wallet. Here is a list of the main ones:
Leverage
L’leveragewhich can go up to x200 on some exchangesmultiplies both the potential gains and losses.
A small price variation can therefore have a major impact on your position. It is therefore very important to use a reasonable leverage and of systematically set Stop Losses at each open position.
Liquidation
When your account balance is no longer sufficient to cover the losses of your position, it is automatically closed by the platform.
This is called a liquidation. With a high leveragethis can happen very quickly in the event of an adverse price movement.
To avoid it, it is necessary to maintain a sufficient margin and once again, use stop orders.
High volatility
THE cryptocurrencies are known for their high volatility. Their prices can vary by several percent in just a few minutes.
This is further amplified with futures due to the‘leverage. You should therefore expect strong fluctuations and be ready to react quickly.
Expenses
THE futures trading generates fees for each transaction (position opening and closing). These can quickly accumulate if you trade frequently.
It is important to take this into account in your strategy and choose a platform with competitive prices.
To save on costs, we recommend using specialized exchanges in cryptocurrencies rather than Brokers, if you want to trade on this market. The choice of exchange at competitive fees like Bitget Or Mexc are wise.
Price slippage
During strong variations, there may be a difference between the price at which you place your order and the price at which it is executed. This is called the slippage.
To limit it, favor periods of strong liquidity and place limit orders rather than market orders.
Total loss of capital
With l‘leverageit is possible to lose your initial investment entirely if the market changes strongly in the wrong direction.
Your account may then have a zero balance. To protect yourself, only invest what you can afford to lose and set loss limits.
Stop Loss Hunting (or Stop loss hunting)
The stop loss is a essential tool to limit your losses. However, in a volatile market, prices can quickly exceed your sto levelp, especially if many participants have placed their orders at the same level.
We then talk about Stop-Loss Hunting “stop loss hunting”. To avoid this, spread out your stops and place them at less obvious levels.
💡 Also discover: How to get started in trading as a beginner?
What trading strategy for crypto futures?
In trading, there are hundreds, if not thousands, of possible strategies. This also applies to cryptocurrencies. Here are some of the most used when it comes to crypto futures trading:
- Scalping: it involves quickly opening and closing many positions to capture small price movements. Scalping is often done with high leverage to amplify these small variations.
- Day trading: This approach involves only opening positions for a few hours and closing them before the end of the day. This allows you to take advantage of the intra-day volatility of cryptos while avoiding theovertrading (too frequent positions)
- News trading: this involves taking advantage of the strong price fluctuations that often follow important announcements (regulations, institutional adoptions, etc.). A significant lever makes it possible to amplify the impact of these brutal movements.
- The breakage and reintegration of bevels : based on technical analysis, this strategy aims to identify wedges on price charts.
When price breaks one of the two wedge lines and then returns inside the pattern (reintegration)this often generates a powerful trading signal in the direction of the initial breakout.
With high leverage, this type of configuration offers a risk/reward ratio very attractive.
- Liquidation trading: this strategy consists of identifying price zones where numerous liquidations (forced closing of positions) are concentrated and positioning oneself to take advantage of them.
Indeed, liquidations tend to accentuate price movements, creating opportunities for traders on the lookout.
Sites like Coinglass allow you to consult market liquidation levels in real time.
The choice of strategy will depend on your risk profile, your experience and the time you can devote to trading.
In any case, using high leverage amplifies both potential gains and losses. A rigorous risk managementwith some stops and take profitsis therefore essential.
We recommend to backtest strategies on a demo account before applying them in real life.
Win your trades in Crypto Futures
To optimize your chances of success in trading crypto futures, here are some tips:
- Define a clear trading planwith realistic objectives and strict risk management rules.
- Use stop orders to limit your potential losses. Place them at key levels and spread them out to avoid stop hunts.
- Be disciplined And don’t let yourself be overwhelmed by your emotions. Fear and greed are the trader’s worst enemies.
- Adapt your lever and the size of your positions to your capital and your risk tolerance. Excessive leverage is often a recipe for ruin.
- Be patient and don’t try to constantly be on the market. Wait for the best opportunities to present themselves.
Keep in mind that trading is a marathon, not a sprint. Gains are built over time, over the course of many small profitable trades.
Don’t give in to the pressure of FOMO (Fear Of Missing Out) or F.U.D. (Fear, Uncertainty and Doubt) and stay focused on your plan.
Getting started with trading cryptocurrency futures
If you wish to start trading crypto futures, the Bitget platform is a great place to start. Here’s how to do it:
- Go to the website of Bitget and create an account
- Check your identify to secure your account
- Deposit funds on your Bitget account
- Get familiar with the trading interface and the different types of orders
- Start by trading on a demo account to train without risk
Bitget has many advantages for the crypto futures trading:
| Benefits | Disadvantages |
|---|---|
| Wide choice of cryptocurrencies | Significant risks with high leverage |
| Leverage up to x125 | Can be confusing for beginners |
| Competitive fees | Not regulated by the AMF |
| Copy trading | |
| Free demo account |
💡 See also: Alternatives in France for futures trading.
To conclude this article, let us note that the cryptocurrency futures trading is an activity exciting but demanding.
By seriously training yourself, defining an appropriate strategy and applying rigorous money managementyou will put all the chances on your side to succeed in the long term.
The platform Bitget offers an ideal environment to get started in this field. So get started, always keeping in mind this golden rule: Never trade more than you can afford to lose!
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