An Ultimate Binance Futures Trading Guide for Beginners
Binance is the most popular crypto exchange that allows traders effective and smooth swapping of cryptocurrencies. It’s a highly reputed crypto platform that allows more than 140 cryptocurrencies and crypto assets for trading, including BTC (Bitcoin), ETH (Ethereum), BNB (Binance Coin), LTH (Litecoin), and more. Since its launch, Binance has gained massive popularity among the crypto community for a variety of reasons, such as:
· High market liquidity
· Relatively lower transaction fee
· Excellent security standards
· Higher processing capabilities
Recently Binance has launched ‘Binance Futures’, a futures trading platform that allows traders to use leverage and open both short and long positions. This platform allows users to leverage upto 125 times, which means that a trader can multiply their profit or loss by 125x. The best cryptocurrency terminal like TrailingCrypto provides a set of trading strategies for Binance Futures ensuring a seamless trading experience.
But before we get into Binance futures and it’s working, let’s understand what crypto futures are about?
Crypto futures are derivative products or a kind of contract where counterparties agree to either buy or sell a particular crypto coin at a pre-established price on a predetermined date and time. The Futures contracts are a bet that enables traders to wager upon a future price of the said cryptos.
Today, the investors use futures for speculation and hedging without any obligation to own that particular asset.
Binance Futures is part of the Binance exchange that lets users trade futures contracts for a range of cryptocurrencies. All deposits are made via the Binance platform, from where the traders transfer USDT from their Binance Spot USDT wallet to their Binance Futures USDT wallet.
Before we look further into opening an account on Binance Futures to start trading, let’s talk about its features.
Binance Futures Platform Attributes
Key features of the Binance Futures trading platform involves:
1. The Binance Futures exchange is very easy to navigate, making it suitable for novice and advanced traders and investors. It also allows investors to go long or short on supported cryptocurrencies.
2. Binance Futures offer 2 futures platform:
· USDT Futures
· Coin Futures
3. Users can deposit cryptocurrencies even from external wallets or by using credit card, or bank transfers to deposit fiat currency on Binance. As it supports the deposit of all the major fiat currencies, FX risk is removed. Once you have deposited in your Binance account, you can transfer USDT to your Binance Futures trading account.
4. Binance Futures platform also supports spot wallet, OTC, margin, and PTP trading.
5. Strong emphasis is given on the security part
Binance Futures is an attractive trading platform as it allows traders to do two major things:
· Enter into short positions
· Trade with leverage
It gives different ways to earn profits to traders while trading cryptocurrency. We know that the price for Bitcoin doesn’t always increase, and may experience severe downward price action. With Binance Futures, traders can make profits whether prices move up or down.
Opening a Binance Futures account
Getting started on Binance Futures is an easy task. But, before opening a Binance Futures account, you have to open a regular Binance account. If you don’t have an account, either install the Binance app, or go to the official Binance website, and follow the below steps:
1. Click on ‘Register’ in the top right corner of the web page.
2. Enter in your email address and password.
3. Now click on ‘create account’.
4. You should receive a verification email soon. Now, follow the instructions in your email to complete your registration on Binance.
Now that you have opened your Binance account, click on Futures option at the top of your web page or you can click on the Futures icon at the bottom of your home screen on the app. You should now be looking at the Binance Futures interface. To open an account, simply click on open now, and your Binance Futures account should be open.
Why should you use Binance Futures?
Binance offers two options in the Futures namely;
· USD-M Futures: It provides traders with up to 125x leverage with no expiration.
· Coin-M Futures: In this case, Binance Futures offers a 125x leverage and tokens margined with or without an expiry date.
Funding a Binance Futures account
Now that you have opened your Binance Futures trading account, it’s time to deposit some funds so that you can start trading. All Futures contracts on this platform are traded in Tether (USDT), so you need to deposit USDT to begin trading.
To transfer funds to your Futures wallet, click on ‘Transfer’ on the right side of the Binance Futures page. Set the amount that you’d like to transfer to your wallet. Thereafter, click on “Confirm the transfer”. Shortly, you can see the balance added to your wallet.
This isn’t the only way to add funds to your Futures wallet. You can also use funds in your Exchange wallet as collateral and borrow USDT for Futures trading. This way, you don’t have to transfer funds directly to Futures wallet. Yes, of course! You’ll have to pay back the USDT borrowed.
Binance Futures interface guide
See the below image, seems like there’s lot going on! So, we have provided a breakdown of section for your convenience:
1. Here, you can find links to other Binance pages, such as Coin-M Futures, API Access, Spot, and Activities. Under the Information tab, you can find links to index price, funding rate, Futures FAQ, and other market data.
On the right side of the top bar is the Dashboard where you can access your Binance account. Here, you can check your wallet balances and orders across the entire Binance ecosystem.
2. This is where you can choose the contract that you’d like to trade and adjust your leverage. Binance has numerous contracts to choose from, including the default BTCUSDT contract. The default leverage on the Binance Futures trading platform is 20x, but you can take it up to 125x. Additionally, you can also switch between cross margin and isolated margin time.
3. Check the price chart panel where traders can monitor price activity in cryptocurrency markets in conjunction with the indicators which help them to build strategies. You can switch between price chart and order book depth.
4. Here, you can place an order. You may either go long (you will profit if price increases) or short (you will profit if the price falls). Here, you can choose between Market Order, Limit Order, Stop Market order, or Stop Limit order.
5. Here, you can monitor the status of your own trading activity, and position after the order is filled. You can switch between the tabs to check the current status of your positions along with your currently open and previously executed orders. This also includes information related to Mark Price, Last Price, Margin Balance, and Entry Price. This is going to be very useful to track your performance and understand the trades that you had executed in the past.
6. This is where you can check your available assets, deposits, and may buy more crypto. Here, you can also view information related to current contract and positions. Make sure to keep an eye on Margin Ration to prevent liquidations. By clicking on Transfer, you can easily transfer funds between your Futures wallet, and the rest of Binance network.
Placing your first trade
Now that you have opened the account and deposited funds, it’s time to place your first trade. Placing a trade is straightforward. You have to select the order type first from the below three options:
· Market order
· Limit order
· Stop-limit order
· Stop market order
· Trailing stop order
Market orders are considered the most basic order type. It is essentially an order to buy or sell at the best current price. For these orders, you have to enter the order quantity. In these orders, you will end up paying more processing fees.
These are the orders which you place on the Order Book with a specific limit. When you place the Limit order, the trades can be executed only if the market price reaches the limit price which you set or higher.
To set a Limit order, you have to specify the prices at which you want to buy or sell your cryptos. With Limit orders, you can buy at a lower price or sell at a higher price than the current market price according to your set limits.
Stop Limit Orders
When it comes to Stop Limit Order, the Stop Price is the price at which an order becomes a regular Limit order. Once your stop price is reached, the stop limit order will get placed. Let’s understand with an example:
Suppose you have set the stop price at $10400, and the limit price has been set to $10380. So, now the chances of the limit order getting filled once the stop price is reached are higher. This same thing will happen in case you set the stop price lower than the limit order for buy/sell.
Take Profit Limit Order
If you understand Stop Limit order, you will easily understand what is Profit Limit order? Just like stop limit order; it involves a trigger price, the price that triggers the order, and, it also involves a limit price, the price of limit order. Both these prices are added to the order book. Take profit limit orders can only be used to reduce the open positions.
These orders help to manage risk and lock in the profits at a defined price level. It can also be used in addition to other orders, allowing you to have more control over your positions.
Take Profit Market Order
Similar to the Take Profit Limit order, this order also uses a stop price as a trigger. When the stop price is reached, it triggers a market order. You can mark the Take Profit Market order under the stop market order option in the entry field.
Stop Market Order
These orders function in the same way as the stop limit orders with a single difference, i.e., once the stop price is reached, the market order will get placed automatically.
Trailing Stop Order
This is a little complicated order method than other order types. But this order makes sure that you gain maximum profits while minimizing the risk of losses that you might suffer in your current position. When you open a long position, the trailing stop goes up with a price rise. But, if the price goes down, the trailing stop ceases moving.
If the price moves a certain percentage, a sell order is placed automatically. And, it is vice-versa for a short position.
The best strategies used to place orders on Binance Futures
TrailingCrypto provides a set of advanced strategies for Binance Futures trading with an easy-to-use platform and assuring a seamless trading experience. We help our traders to protect their liquidity and provide the best strategies to reduce risks.
To open a short position or closing the long position, above order types can be used as:
· Limit sell
· Market sell
· Stop loss
· Take profit
· Trailing stop sell
· Take profit with trailing exit
And, to open a long position, and closing the short position, below order types are used by TrailingCrypto:
· Limit buy
· Market buy
· Trailing stop buy
· Stop buy-price greater than current price
· Stop buy-price lesser than current price’
· Stop buy trailing exit
TrailingCrypto also provide strategies to adjusting the leveraging value and helping traders to earn maximum profits on their investments. We are one of the best trading bots that help you to manage all your exchange accounts and provide strategies to make massive incomes at low risks.
How to adjust your leverage?
Binance Futures trading allows you to manually adjust the leverage for each contract, and we will help you to choose the contract and adjusting leverage within limits.
To choose the contract, go to the top left of the page, and hover over the current contract which is set to BTCUSDT by default. To adjust the leverage, you can go to the Order entry field and click on the Current leverage amount which is set to 20x by default. Set the amount of leverage by adjusting the slider and then click on Confirm.
The larger is the position size, the smaller is the leverage price that you can use. Using higher leverage means a higher risk of liquidation. We help novice traders to carefully consider the amount of leverage that they use.
Let’s understand Leverage trading with an example:
Suppose you just closed a transaction and earned $100 profit on it. If you traded this with a leverage of 1:25, you would have earned $2500 from this trade. Thus, if you have a profitable strategy, chances are that trading with leverage will help you increase your capital without investing more on your own funds.
And, at the same time, you may also increase the risk of losing a deposit if the price set goes against your forecast. So, if you have 0.1 BTC and buy 100,000 contracts, then the leverage will be X100. If the rate drops by 1%, you will lose everything. With a leverage of 10, the negative deviation will be 10%. Apart from this, there are commissions, financing of borrowed positions, etc. which have to be paid out of the deposits.
Binance Futures trading offers two trading modes including cross margin trading and isolated margin trading. You may either select cross or isolated mode by clicking on the tab near left hand side of the order page.
Mark Price and Last Price
To avoid spikes and unnecessary liquidations, Binance Futures uses Last Price and Mark Price. The Mark Price is designed to prevent the manipulation. On the other hand, Last Price makes reference to the last price at which a specific contract was traded. This would calculate the realized profits and losses (PnL) that you have.
Liquidation prices and unrealized PnL are calculated based on the Mark Price, which gathers data from a wide range of data providers in market.
Binance Futures Signals
Binance Future signals are the additional feature of this platform which offers real-time trading alerts. It provides specific price levels that can be used further for stop loss, trade entries, take-profit orders for the position.
This feature also involves educational content and technical analysis for the cryptocurrency traders. These signals are usually accessed via using channels on Telegram. Users are required to pay a monthly subscription fee to get signals.
Binance Futures Calculator
You can find Binance Futures calculator at the top of order entry field. It allows traders to calculate value before entering either a long or short position.
The calculator has three tabs:
· PnL- It calculates your initial margin, profit and loss, and return on equity based on entry and exit price.
· Target Price- This tab calculates what price you will need to exit your position to reach the desired percentage return.
· Liquidation Price- You can use this tab to calculate your estimated liquidation price based on your wallet balance, position price, and your intended entry price.
Why TrailingCrypto bots are useful when trading with leverage?
If you choose a third-party profit or personalized strategy, you can not only automate it using TrailingCrypto bots but can also earn more on it taking advantage of the leverage. You can maximize your returns by using higher capital and leverage. The Binance Futures trading at TrailingCrypto bot divides your funds into smaller parts and buys the assets at fixed intervals.
How do you get these strategies?
1. Your personalized strategy: You can make a personalized strategy using technical indicators or any other tools, and automate trading of this strategy in TrailingCrypto. To trade with leverage with your bot, you can connect your TrailingCrypto account to Binance Futures. Once an appropriate exchange is successfully connected, the bot will activate the leverage functions.
2. Third-party strategy: You can also automate trading with third-party signals and connect to the Future exchange to use leverage.
Trade on Binance Futures using TrailingCrypto
To work with TrailingCrypto, you must have the following settings in the correct place:
· Go to your Binance account>settings>manage API
· In API settings, check if you have enabled Futures trading permission for that API Key.
· In the preferences section, make sure to select the position mode as a one-way mode.
TrailingCrypto allows you to trade on different exchange accounts using a single platform. Through this innovation, the traders are given the convenience to bring their trading journey to the next level. The exchange offers both cross and isolated margin trading, and you can go long or short, or can even hedge your positions depending on the market analysis.
With TrailingCrypto, you can easily manage your trades and keep track of your portfolios on Binance Futures and different crypto exchanges. Connect your Binance Futures account to TrailingCrypto for a smarter and easier crypto trading experience.
Binance Futures trading provides a lot of opportunities to the traders that are looking to maximize their returns on trading crypto. Traders can go long or short on the margin, with leverage to enhance their earnings. Hope you will find this guide useful. Happy Trading!