Futures trading is an advanced financial tool that allows making a profit from betting on the future asset’s price. Futures are often used for commodities, precious metals, oil and other goods in the global market. The cryptocurrency market is not an exception. How does crypto futures work? Let’s discuss this issue today.
What are Futures in Crypto?
Futures contracts on crypto assets are made on crypto platforms that allow this option: WhiteBIT, FTX and Binance Futures. The idea is to make a correct forecast for the future asset’s price and make a profit from it. And it does not matter if the rice moves up or down – the main is to make a correct prediction.
There can be two options:
- You go long, meaning you think the price will increase and strive to sell your holdings in the future.
- You go short, which means you think the price will drop, so you sell out your assets and then re-purchase them back when the value is lower.
In both cases, you make a profit. The main here is to make the right forecast. To make a correct price prediction, traders conduct research:
- they learn crypto charts and find patterns and historical indicators;
- they analyse the market trends;
- they make a fundamental and quantitative asset analysis.
That’s a lot of work done for the correct price prediction. So futures trading is not as easy as it may seem to be. It requires experience and in-depth knowledge of how the market works.
Another aspect of successful trading is picking an asset. Futures on Bitcoin are the most common because BTC has the biggest liquidity and the lowest volatility. It is not advisable to pick highly volatile coins for crypto futures trading because it will increase risks.
Try to practice BTC futures on the WhiteBIT exchange. The platform offers leverage (borrowed funds) that will allow you to multiply your initial investments and income.
