Futures trading implies speculation on the future price of a commodity or asset. Gold, silver, oil, and other items can be traded using this financial tool. The essence is to predict the price of an asset or commodity correctly. So, futures trading requires in-depth knowledge of the market and the ability to forecast market trends. It also includes:
- skills in conducting technical analysis;
- assessment of the global economy;
- evaluation of the news background;
- ability to read charts and comprehend trends.
What are futures in crypto? Crypto assets are highly volatile, which enables huge gains for those skilful and crypto-savvy people. Therefore, the ability to predict the future crypto asset’s price fluctuations is crucial when it comes to crypto futures. How does it happen? If a trader believes that the cryptocurrency price will grow, one opens a long position. If the price really increases, the trader sells his holdings and receives a profit. If the trader’s analysis shows that the price will drop, one opens a short position, and if his forecast comes true, he buys assets at a low price.
Crypto futures imply concluding a contract where the price is mentioned. Also, there is a contract expiration date, when the trader must fulfill his obligations on buying or selling the asset.
Another important factor of successful crypto futures trading is picking a platform.
What is the Best Cryptocurrency Futures Exchange?
Here are some popular crypto platforms enabling crypto futures trading:
Each of them offers a different number of pairs available for crypto futures trading and a different size of leverage that can be used. Leverage means borrowing funds from an exchange’s reserves to multiply initial investment and so income.
WhiteBIT crypto exchange supports the most popular crypto assets (BTC, ETH, SOL, etc.) for crypto futures trading. The maximum leverage you can use on WhiteBIT is 20X. That is, having, for example, 2 BTC, you can multiply them up to 40 BTC. However, using leverage bears many risks, for, on the one hand, you can gain huge profit, and on the other hand, you can lose your position and holdings if your price prediction is wrong. Try WhiteBIT demo trading to learn all the pitfalls of crypto futures.