How to Trade Futures on Binance
Today, one platform that has resonated with many cryptocurrency enthusiasts is the Binance exchange platform. Binance remains the largest cryptocurrency exchange with over one hundred cryptocurrencies traded daily. Binance started its exchange with spot trading, which allows traders to make a profit only when there is an increase in cryptocurrency value.
Nevertheless, it later included futures in its platform widely known as the Binance Futures. The Binance futures platform offers traders to open both short and long positions while using leverage in their trading. In this article, you will learn simple ways to trading futures on the Binance platform, Futures signals, and everything worth knowing about Binance futures.
What is Futures Trading?
In the financial industry, hardly will you find a professional that accepts he or she has gotten to the optimal level of their career. In this guide, we will go to the very basic that even a newbie can relate and respond. Futures are contracts, which relates to a particular asset that enable companies and individuals to sell or buy an asset within a prearranged price in the future.
What this means is that the buyer of the asset must buy it before it expires while the seller has to provide the asset. The Binance platform provides unique Binance futures contract, which is different from the traditional futures contracts you might know.
Getting started with futures trading on Binance
To start trading futures on Binance, you have to sign up or create an account on the Binance website. However, if you already have an account set up, you can login and begin the process. With your email and password, you can log into the exchange and perform the trade you want going through the Trade section.
However, if you don’t have an account, you will need the following steps to create one before trading on the Binance platform. Don’t think of a stressful registration process because everything is straightforward but with some identity verification. These registrations process is part of the Binance’s know-your-customer requirements for each customer.
Creating a Futures Binance Account
First, you have to go to the website of the Binance Exchange and on the top right side; you will see “Register.” On the page that pops up, you can fill your email and desired password to use for your account.
However, you have to complete the registration process through the email sent to the email you used during the registration process.
Funding Your Futures Wallet
Before you learn how to trade futures on Binance, you need to fund your account. The Binance platform uses Tether (USDT) for trading futures contracts. Therefore, to start, you have to deposit using USDT if you want to start your trading on the platform.
Funding is much easier than it was previously. Today, you can use the Spot Wallet, which is the regular Binance to transfer funds to your Futures Wallet. At the bottom right side of the screen, you will see “Transfer” if you want to transfer funds to your futures wallet. Just click it and enter the USDT amount you want to transfer before confirming your transfer. The amount will reflect on your Futures Wallet.
Peradventure your Spot Wallet doesn’t have any USDT, there is another way to fund your account. You have to use your regular Binance account to buy USDT, which you will then transfer to your Futures Wallet.
How to trade futures on Binance Exchange
You’ve registered and your account funded, the next step is learning how to trade futures on the Binance platform. Trading isn’t complicated as many publicize it to be. The platform allows only two form of leverages – up to 75x for other cryptocurrencies while a maximum of 125x leverage for Bitcoin/USDT.
Brief Summary of the Binance Futures Platform
The image above shows an overview of the Binance futures trading interface
Everything will look confusing if it is your first time; however, we are here to make things clearer. Let us explain each section since we have already identified them from 1 to 5.
- The area marked “1” is where you choose what contract to trade; additionally, you can also adjust the leverage to use. Although there are numerous contracts to select on the Binance platform, the default contract is the BTCUSDT. You can see that the leverage is 20x with the option of taking it to a maximum of 125x.
- The area marked “2” contains your chart. You can decide to switch from one view to another by clicking the trading view button or using the original chart.
- The area marked “3” contains a live feed of your order book data with graphics display the order book depth
- The area marked “4” is where to check your various trading activity. It contains information such as mark price, entry price, and margin balance, whereas the area marked “5” is where you can enter your different orders, which we will talk about next.
Overview of orders in Futures Trading in Binance
Now you have an idea about the Binance Futures platform; it would be easier to navigate through it. Placing a trade is quite easy because all you need is the particular order type you want. You have four order type options available to make a trade.
Market order– you may want to use this order if you want your order to open once it is the best available price in the market. However, the downside to this order is that you pay more in terms of fees compared to other order types. You might want to consider other orders if you are starting your futures trading.
Limit order – if you don’t want additional fees, then you might consider using the limit order since it cuts down fees. A limit order is the primary means of executing your trades; you can incorporate a take profit target or stop-loss level for your trades.
In a limit order, execution of the trade begins if the asset reaches the specified price. For a limit order, you will determine if you want to sell or buy the coin. Then you put the amount of BTC you want to buy as shown in the image below.
In the image, we set the price target at 7937.45 USDT with a quantity of 0.01 BTC. This order will only trigger when the market price gets to 7937.45. Our default leverage is 20x, which will require 3.96 USDT to enter this position.
Furthermore, that amount (3.96 USDT) is the maximum you can afford to lose peradventure your position gets liquidated. However, you can utilize the stop-orders to manage your risk.
Stop-Limit Orders – The stop-limit order acts like a stop-loss mechanism; it allows you to set a limit order immediately prices get to a stop price, which you previously select. The order book reflects the limit order when the asset price reaches the stop-order set.
Take-Profit-limit Orders – This kind of order requires both a limit and trigger price. You can use this if you want to minimize your open positions and very useful in managing your risk.
Additionally, you can use it to lock your profit once your asset reaches a specific level while trading. It works similarly as take-profit in forex trading.
Here is a rundown of how you can trade Futures contracts on Binance
- Transfer USDT using your Spot Wallet to your Binance Futures wallet
- Select your trading pair (BNB/USDT, BTC/USDT, ETC/USDT, ETH/USDT etc.)
- Choose your margin mode (Isolated or cross)
- Select your leverage level (up to 125X)
- Choose order type (Market, Limit, stop-limit, and take-profit limit)
- Enter price and amount
- Place your order – short or long
Futures Trading Signals
For a newbie, trading futures contracts can be daunting and confusing because the market itself is tricky. It is hard to know the “ideal” time to sell or buy; however, you can take advantage of Futures signals provider that offers both free and premium signals. With this, you don’t have to get involved with the analysis of the market, which is time-consuming.
At Best Trading Signals, you can get the best signals Binance Futures signals you need to begin your trading. The platform has a team of skilled cryptocurrency traders, who understand the dynamics of the market.
Conclusion of how to trade futures on Binance
The Binance platform has experienced tremendous growth such that it has included Futures trading for everyone. You can trade Futures on the Binance platform with up to 125x leverage. Nevertheless, for beginners, it is advisable not to consider using margin trading because of the risk involved. Margin trading can make you lose your capital quickly.
Reasonably, the crypto market is hard for any new trader to begin trading. Nevertheless, we have various Futures signals providers such as Best Trading Signal that offers the best signals Binance Futures in the market.
Importantly, you can get these signals through Telegram or an email address while you perfect your learning process.