With the advantage of providing leverage tools to help increase profit opportunities many times over, futures trading on Binance is an investment channel that many people are interested in. So how to play futures on Binance and what are some notes about the experience of playing futures on Binance? The following article will give you the most detailed information.
Overview of how to play Future on Binance
What is Future trading on Binance?
Binance Futures, also known as Binance futures contracts, is a form of derivatives trading on the Binance exchange . Futures on Binance allow investors to place orders based on their speculation about the price fluctuations of a currency without owning that currency. Therefore, futures trading on Binance facilitates profits in both bullish and bearish markets.
Example of how to play Futures on Binance: The futures contract term on Binance is 1 week. If the investor predicts that the price of BNB will increase, he will place a Buy order. When the contract expires, if the price of BNB increases, the investor will receive the difference between the market price and the previous bid price. On the contrary, if the price of BNB drops, the investor will have money deducted from their account with the corresponding difference.
Future Binance trading fees
An advantage for investors is that Binance Future trading fees are relatively low, specifically as follows:
The spot market transaction fee ratio (Maker/Taker) is 0.1%.
Trading fees for USDⓈ-M (Maker/Taker) futures contracts are 0.02% – 0.04%.
Trading fees for COIN-M (Maker/Taker) futures contracts are 0.015% – 0.04%.
Advantages and disadvantages of Futures trading on Binance
In addition to how to play Future on Binance, one of the other issues that investors need to pay attention to is considering the pros and cons of this form of trading.
Advantage:
- There are many different leverage levels for traders to choose from. The maximum leverage ratio can be up to x125 times. This helps provide the opportunity to achieve attractive profits for Traders even in cases of extremely small market fluctuations.
- The volume of futures trading on Binance has currently reached a relatively large scale, thereby providing high liquidity, easy buying, selling and depositing and withdrawing money.
- When using Future trading on Binance, investors can Trade Futures directly without connecting to other accounts or other intermediaries.
- Binance is designed with an easy-to-use interface, investors can apply Futures trading on Binance via PC or mobile device.
Defect:
- Higher leverage comes with greater risk. Therefore, if an investor does not have experience playing Future on Binance, it is easy to lose money and even liquidate the account.
- Currently, when conducting a Future leveraged trade, investors may be limited in some trading pairs. However, popular currencies are still relatively fully updated on Binance.
With high profitability, futures trading on Binance is applied by many people. However, in reality, high profits always come with great risks. Therefore, investors should consider carefully before participating in playing Futures on Binance.
Types of contracts on Binance Future
To know how to play futures on Binance, investors first need to distinguish between types of futures contracts. For Binance Futures, there are two most common types of contracts: USDⓈ-M futures contracts and Coin-M futures contracts.
USDⓈ-M futures contract
The USDⓈ-M futures contract is a contract in which USDT is used as the base currency. This means that only USD can be used to trade futures on Binance and at the same time investors also receive profits or losses in USD.
COIN-M futures contract
COIN-M futures are a type of contract in which cryptocurrency is used as the underlying asset. These currencies are priced in USD however buying/selling, profit and loss calculation will be done in staking.
Instructions on how to play Future on Binance
With a user-friendly website design, currently playing Future on Binance can be done relatively simply and conveniently, specifically as follows:
Open a Binance Future account
To be able to open a Binance Futures account, investors first need to register to open a regular Binance account. After creating your account, visit the website or download the Binance application, log in and follow these steps:
Step 1: Access the Wallet section in the upper corner of the screen, select “Wallet overview”, select “Futures”. When looking at the portfolio, investors will see 2 types: USDⓈ-M Futures Contracts and Coin-M Futures Contracts. Usually the USDⓈ-M futures contract is more commonly used.
Step 2: Click on Activate and select “Open now”. So investors can now open a Binance Futures account.
How to place Future orders on Binance
Step 1: After activating the Binance Futures account, to be able to Trade Futures on Binance, investors proceed to the “Wallet Overview” => Futures section. Then click on “Transfer” at the bottom of the screen.
Step 2: The investor selects “Fiat and spot” Wallet and transfers to USDⓈ-M Contract, selects the currency he wants to transfer and the amount, then presses “confirm”.
Step 3: To open an order, when the main Futures interface appears on the screen, the investor clicks “Open now”.
Step 4: Investors can place future orders on Binance and start futures trading. Currently, Binance allows investors to place one of the following orders.
- Limit Order: Matches the price and trading volume that the investor has entered. This is the most used order on Binance futures.
- Market orders: Binance will automatically match orders at the best selling and buying prices on the market. Due to the automatic order placement mechanism, the transaction price may not be as desired by investors, which often limits users.
- Stop-limit order: The system will activate a limit order when the trading price on the floor reaches the limit price the investor has set. For example, when the cryptocurrency price drops below xxx, a sell order will be made to help investors cut losses.
- Take-profit-limit order: Similar to the Stop-limit order, this order will also activate when the price reaches a certain limit point, but this is an order used to determine the profit taking point. When the market goes in the right direction as expected by the investor and hits that profit-taking point, the system will automatically close the order to help gain the desired profit. On the contrary, if the market price does not reach the pre-set limit, the order will not be executed.
Step 5: Close the order and take profit
Investors can close an order by placing an opposite order to the old order with the same trading volume. Specifically, if you have created a Buy/Long order, you will then create a Sell/Short order to close the order and vice versa. Besides, investors can also close part of the contract to take profits first, but do not necessarily close the entire contract.
Some effective experiences playing Future on Binance
Through the above instructions on how to play futures on Binance, you can see that the process is relatively simple. However, in reality, trading futures on Binance effectively is not an easy task. Investors can refer to some experiences in playing Futures on Binance as follows:
Applying technology to investment activities
With the wave of applying science and technology to business and life, the field of financial investment is no exception. In a volatile market like Crypto today, investors who know how to take advantage of and fully exploit the potential to create advantages for themselves will be the ones who can solve the problem most accurately and quickly.
Currently, many successful Futures investors on Binance apply the support of technology to increase their competitiveness in the market.
Specifically, investors with large capital will invest in continuously running computer systems to mine Bitcoin . Other ordinary investors will apply technology bots to analyze the market, analyzing transaction data of currencies to make predictions about volatility trends.
The thorough application of science and technology will not only help investors save time on observation and analysis, but at the same time accuracy will also be significantly improved.
Build your own investment strategy
Highly effective ways to play futures on Binance often come with smart strategies. Especially for new investors entering the market, it is even more important to research carefully and build a strategy that suits you. Furthermore, the futures trading strategy on Binance should also be tested many times to evaluate its long-term effectiveness.
When building a strategy, you need to keep in mind:
- Set out short-term and long-term plans for yourself, then analyze and research the market to adjust accordingly.
- You should not miss the fluctuations that occur every day because this will be a factor that helps investors learn lessons and experience in monitoring the market.
- Actively analyze and predict the next possibilities that may occur in the market to come up with a timely and effective strategy.
Investors need to always remember that, in the virtual currency market, value fluctuations will change day by day, even hour by hour. Therefore, investment strategies and methods need to be defined clearly, in detail, specifically and step by step. Especially with a form of trading that has many risks of price fluctuations like Futures.
Manage and prevent risks effectively
This is one of the crucial experiences that not only applies to how to play Futures on Binance but also in other fields. Risk management can help minimize the losses that investors may suffer when incidents occur, especially when the environment is highly volatile.
Specifically, investors should not invest all of their capital in a certain investment channel or a single Future trading contract. Instead, spread your investments across multiple channels.
For futures contracts, Binance should also distribute many contracts with different expiration times depending on the market situation. With this approach, even if the market fluctuates unfavorably, investors will not suffer too heavy losses.
Maintain your trading psychology
The value of money in the market may fluctuate continuously, but investors’ psychology should be maintained. In particular, we know that crypto is one of the investment markets with a very high level of volatility in a short period of time. Therefore, psychology is a factor that can play a decisive role in investor behavior.
Focus on observing the market, making analysis and predictions based on data instead of emotions. At the same time, decisively make wise decisions at the necessary time. A “cool” head will be the key factor to help investors succeed not only in the field of cryptocurrency but in most other fields.
Above is an overview of the most effective and simple way to play futures on Binance. It can be seen that this form of investment creates good profit opportunities. However, according to experience playing futures on Binance, investors need to research carefully and develop effective investment strategies to optimize this investment channel as well as minimize risks. worth having.
