How to Invest in Crypto Futures?

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How to Invest in Crypto Futures?

Crypto trading has become a profitable way to generate income since the rates of digital assets are unstable. Large crypto platforms and exchanges enable many tools for making money from cryptocurrencies, and crypto futures is among them. Let’s talk about how to get started with crypto futures trading and what crypto exchanges allow for this type of trading.

The Meaning of Futures

This concept exists for more than a century, when people made deals to buy commodities or assets at a predetermined price and at an exact point in the future. With the emergence and development of the crypto industry, futures found a place in this field too. Now many well-known crypto exchanges (Binance Futures, WhiteBIT) offer this option for users.

Futures trading allows speculating on the future price of the cryptocurrency. If the future price is forecasted correctly, the trader has all chances to multiply one’s investment portfolio.

It’s important to note, that in futures trading, you don’t necessarily have to hold any assets. Instead, you make a derivative contact, where the future price of a specific asset is fixed as well as the date of expiration.

If you are sure that the assets rate will grow, you place a “long” position. If you think the rate will drop, you go “short”. Depending on if your forecast is right or wrong, you either receive assets or pay the difference between the current price and the price you fixed in the contract.

So, the crucial thing is to be capable of analyzing crypto assets, their movements, and things that can affect their rates, as well as the market as a whole.

Here are the steps on how to start futures trading:

  • Pick a trading methodology
  • Develop a trading plan
  • Conduct risk management
  • Trade responsibly
  • Continuous education

It is recommended to start trading with the most popular crypto assets such as Bitcoin, and Ethereum, as they show the most long-term stable growth, so it is easier to forecast how they will behave. BTC futures are available on all large crypto platforms.

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