Originally posted on 16/05/2021 @ 18:26
Cryptocurrency is among the many aspects of the technology-driven world we live in today. As we inch closer towards a “complete digital world,” global citizens are moving away from conventional forms of transactions. One of the platforms receiving this retreating traffic is online crypto trading services. In that regard, Binance Exchange’s Binance Futures surely managed to carve a niche for itself. Thus, this article only and exclusively deals with all that surrounds the Binance Futures guide.
It’s among the top trading platforms when it comes to growth, if not the topmost. The platform allows users to trade for both positions, long and short. It saw its genesis in the year 2020. So if you take into account the time Binance Futures took to become reputed, it’s a big feat for sure.
Of course, there are external factors that pushed for such growth. But, nonetheless, one must not deny the presence it has in the market today.
Binance Futures Explained
The first topic on our Binance Futures guide is how users even use Futures on Binance. But before we dwell on such matters, there’s a need to first discuss what Futures really is.
When we talk about finance, there are mainly two types of contracts; Futures and Options. We will be focusing only on Futures for the purpose of our article. Futures is an obligatory contract that offers the party involved to either sell or buy in the future. The vital point here is the price at which the trading takes place. The trading price is already agreed upon by both parties at the time of the signing of the Futures.
Also, you can even access Binance Futures through the Binance mobile app.
How To Use Binance Futures?
In order for traders to use Binance Futures, they need to register a general Binance account first. For that, they need to visit the official website of Binance and register themselves, possibly using the new Binance referral code. Besides, for more information, you can even check here.
- Enter your credentials; that is, the email and password.
- If you have a Binance Futures referral code/Binance Futures referral ID, do enter to avail of added benefits.
- Click on “Create Account.”
- After you do that, Binance will send a verification link to the email ID you provided. Head over to your email and follow the link.
Traders must remember that they would need to verify their accounts before they can start trading.
- Once you have the Binance account, you can proceed and register yourself for Binance Futures.
How It Works
The wallets for Binance and Binance Futures are different. But at the same time, users can transfer funds from one wallet to the other at their ease.
Step 1: Deposit Funds.
Users need to put funds into their Binance account first and then transfer that to the wallet of Binance Futures.
Step 2: Log in with your Binance Account and enter the homepage.
Step 3: To deposit money into your wallet, go to the “Wallet.” As you click on that, there will be a drop-down tab. Click on “Fiat and Spot.”
Step 4: As the new page pops up, head over to the tabs above and click on “Deposit.” Now, you can go ahead and put in as many funds as you would like to.
Step 5: Now, to transfer the funds, go to the wallet of the platform.
Head over to the right section on your screen, click once on “Transfer.”
Step 6: After deciding on the amount that you wish to transfer, press “Confirm Transfer.”
And that’s it! Now may go ahead and use the services of the Binance Futures trading. You can even avail the various Binance Futures contract specifications on their website.
How To Trade Futures On Binance?
As mentioned earlier, the traders can choose to hold both long and short positions on Binance. In general, a trader chooses to hold long positions when they believe the value of the Futures is going to rise. Vice versa, if the market seems to fall, they hold short positions and cash out at the ongoing prices. So depending on the choices the traders make, they can either make profits or incur a loss.
Besides, to reduce the risks, traders may avail the services of Binance leverage trading.
As a trading platform, Binance offers two options to its users. Traders can either choose to go for the Coin Futures or USDT Futures. When it comes to the Coin Futures platform, it offers margined trading by way of tokens. Whether these tokens can expire or not depends on the type of contract traders choose.
At the same time, traders can also avail to buy or sell via margined trading under the USDT Futures platform. Besides, one of its best features is that the contract doesn’t expire via this platform.
Another feature is that no matter what platform traders choose, they get as much as 125 times the leverage.
Binance Coin Futures Trading
All you need to start trading on the platform on Coin Futures is funds in your Spot Wallet. It’s nothing but the general wallet Binance offers for you to put the fund into. For ease, we will be using Bitcoin (BTC) for the purpose of our Binance Futures guide.
Step 1: For BTC Futures trading, choose the type of contract that you wish to avail.
Step 2: You have the option to go for either a “Cross” Margin Mode or “Isolated.”
Step 3: Carefully choose the leverage for your contract.
You can easily find these towards the left section on your screen.
Step 4: Head over to the right section of your screen, and click on “Place Order.”
Step 5: Now, you need to decide on the Order Type of your contract.
You’ll have a few options, namely, Stop Limit, Market, and Limit. Besides, under Stop Limit, you’ll have a set of three options. These are Trailing Stop, Stop Market, and Stop Limit.
Step 6: Once you choose the order type according to your preference, head down and press on “Buy/Long” or “Sell/Short.”
After placing your order, you’ll be able to see the details regarding the trade you just carried out. All of these will be under “Positions.”
Binance USDT Futures Trading
Step 1: Select USDT Futures as your trading platform by going to “Derivatives.”
Step 2: Choose the pairing of BTC/USDT that you would like to avail yourself of.
You can easily access this by looking towards the left section of the page.
Step 3: Once again, you have the option the choose from two Margin Modes, “Isolated” and “Cross.”
Step 4: Go ahead and choose the leverage for the contract.
Step 5: To place the order, head over to the right section of the page. Click on “Place Order.”
Step 6: The next step entails choosing the order type for the contract. According to your preference, you can select Stop Market, Market, and Limit.
You also need to also type in the size of the order and your preferred entry price. But that is if you choose to go for the “Limit Order.” Also, to cut down the risk factors, the platform offers users its services of “TP/SL.” TP stands for “Take Profit,” and SL is for “Stop-Loss.”
How To Use Stop Loss On Binance Futures?
Profit and stop-loss orders are a boon for all traders. You must note that there exists no need to keep checking your charts in order to earn profits constantly. All you need to do now is that you set a limit.
Users can use a stop loss which is a type of Limit Order. The sole aim of Stop Loss is to limit the number of money users lose.
A trader places a “limit order” at a specific price level. When a deal is in the red, it moves to that level, where it is closed, preventing future losses.
Let’s assume you entered a sell transaction at the current price of $10. And you want to keep the loss to a minimum. You can do this by using a stop-loss limit that you can place wherever you like. Say your Stop-Loss order is at $10.30. Your transaction will be close with a loss on its own if the price rises to that level.
But how to use stop loss on Binance futures trading account? Follow these steps:
Stop Loss on Desktop Version
Step 1: Go to your live position section on the Binance desktop version to establish a stop loss.
Step 2: The take-profit and stop-loss sections are on the right. Press on the section.
Step 3: You can now enter an amount or level at which you want to exit in loss and then press on confirm.
Step 4: The stop loss will be placed, and the open orders section will show those orders.
Stop Loss on Mobile Version
Step 1: Go to the Positions section if you’re using Binance on your smartphone.
Step 2: You can then tap on the Take Profit and Stop Loss section.
Step 3: Set the Stop Loss amount and press Confirm.
Step 4: You must keep in mind to consider Mark Price when setting your Stop Loss at all times.
Step 5: The Stop Loss will be there in open orders after you set it. Plus, you can change or cancel the order.
Can You Short Bitcoin On Binance?
To simply state the answer to whether you can short Bitcoin on Bitcoin or not, yes, you can. But before we dwell on the complexities, let’s first understand what exactly Shorting Bitcoin really is.
Shorting Bitcoin, in simple terms, is basically studying the trends of a fall in the value of the cryptocurrency, Bitcoin. The sole purpose here is to make profits. Also, it’s natural to say that a counter currency such as the USD (or EUR, ETH) must be present.
When you short Bitcoin, you borrow the crypto from someone else. After that, you sell the borrowed Bitcoin at the ongoing market prices. Once you do, it’s a waiting game to look out for any fall in Bitcoin’s value. Once that happens, you buy back the Bitcoin, return the amount you borrowed and keep the rest.
But there are also other ways to go about it. Instead of selling at ongoing prices, if the value keeps rising, you may choose to hold on to it. So it really depends on the crypto volume trends in the market and your knowledge about it. At the same time, it would be really helpful if you sell it right away if you notice or expect a fall. Plus, it’ll be handy if you read up on the Binance Futures price predictions on the website.
Why Is My Binance Futures Fees 0.75%?
As far as trading fees go, 0.75% is a pretty hefty amount. The amount of fees you pay directly depends on how much you’re able to trade. The factors taken into consideration are Trade Volume and the daily average BNB balance.
Binance or any other crypto trading platforms usually take around 30 days for their fee listings. So if your trade volume is below 250 Bitcoins, then your maker and taker fees are 0.02% and 0.04%, respectively. These are the Binance Futures open interest rates. Also, what that means is the more you trade, the lower fees you’ll have to incur. Thus, a trading fee of 0.75% is a result of a very negligible trade.
Futures contracts are a useful way to study the financial asset’s price.
It’s true that contracts such as Futures are areas where many still lack expertise. These types of derivatives offer users the option to trade at a much later date. There is nothing such as the date for settlement when it comes to other contracts such as Perpetual Futures. But even then, these types of contracts persist in garnering a lot of confusion from users.
Also, the confusion is mostly about the uncertainties regarding such contracts. So there exists a need for careful study of such contracts before diving into them. Just as it is with every financial risk, huge returns and losses go hand in hand. That’s why Binance Futures offers a testnet for its users to check whether the trading arena works for them or not.
It’s among the biggest futures trading platform in the world when it comes to bitcoin exchanges. Binance is a powerful trading technology that lets traders study the crypto market. It also provides multiple collateral options and high Binance leverage trading.