How to Trade Crypto Futures?

Futures trading is a common financial instrument for traditional markets. Traders use such commodities as oil, gas, grains, precious metals, etc., to open futures trading contracts.

Futures have also become popular in the crypto market. However, this financial tool may seem rather complicated because it is much harder to predict future asset prices. What are futures in crypto? Let’s find it out in this article.

Crypto Futures Explained

This trading method requires detailed market analysis and expanded knowledge of how prices are formed in this market. Experienced traders that use futures do the following type of research:

• fundamental analysis (the analysis of the global economy and its impact on the crypto market);
• tech analysis (research of asset’s price through crypto charts);
• quantitive analysis (calculating indicators that are crucial for deciding on the future price movements based on the two types mentioned above).

Crypto futures trading allows you to enter the market with a minimum initial investment. This type of trading does not necessarily require buying crypto assets, in fact, but making a contract which specifies the price of the asset and the date when both parties owe to fulfil their obligations.

Trading futures implies going “long” and “short”. A long position means you expect the asset’s value to increase, and on the contract’s expiration date, you owe to sell your holdings at a price specified in the contract. Short stands for reducing the market. You owe to buy digital assets at a price specified in the contract. Such a technique works when the price forecast comes true. A trader bears losses if the asset’s value moves in another direction.

A Crypto Futures Platform for Practice

WhiteBIT is a young crypto exchange with a variety of trading tools, providing the safety of clients’ funds. The platform offers futures trading with different sizes of leverage. Leverage means multiplying your initial amount 5, 10, 20, etc., times to receive a much bigger profit if your price prediction works. Advanced traders recommend using the smallest leverage for a start. With your experience growing, you will understand how leverage works and increase it over time. You can practice trying different leverage sizes on a WhiteBIT demo account.