As a trader, I know how much futures in cryptocurrency have gained popularity over these years, and today we will discuss how you can trade futures in crypto. 

For beginners – In trading futures, you agree to buy or sell a specific crypto at a specific future date by predicting its price. This means you simply predict the price of a particular crypto you will trade on and buy or sell it on an upcoming date. 

What is Crypto futures? 

It is a contract between two companies to buy or sell a certain quantity of crypto at a particular price at a future time known as crypto futures. Through these contracts, traders can make theories about the direction of the currency prices without really holding them. 

If we talk about Indian markets, trading in futures is very common. It functions the same in Indices, commodities, crypto, and bitcoin. The only difference is the volatility of different markets. And the benefit of trading futures in Crypto is that you can gain profits at a large scale according to your leverage. 

Benefits of trading futures- 

• Liquidity: If we talk about cryptocurrency, it is the market with the highest liquidity. This liquidity ensures that traders can enter and exit positions quickly without significant slippage, making futures ideal for both day traders, as well as long-term traders. 

• No ownership: In trading futures in Crypto the major advantage is there is no need for ownership. This can be beneficial for traders who don’t want to deal with the complexities of storing, securing, or managing crypto wallets. 

• Hedging: You can mitigate risk by using a hedging tool. Traders who already own cryptocurrencies can use futures to protect themselves from adverse price movements. 

• Leverage: The advantage you have as a crypto trader is Leverage. You can easily control larger positions than the amount of capital you have in your account. 

How does trading futures in crypto work? 

You must be aware of long positions and short positions. If you are a beginner let me simply write it for you. Long means buy, and Short means sell. If you believe the price is going to rise then you book a long position, and if you believe the price is going to fall then short position. 

For Example- 

• Long position- If crypto is trading at $20,000, and you expect the price to go above $25,000 you will go for a long position. If the prediction goes well you will gain profit. 

• Short position- If crypto is trading at $20,000 and you expect the price to fall $18000 you will go for a short position. If the prediction goes well you will gain profit. 

Remember the loss will also act according to your leverage. The higher the leverage the higher the loss, and the profit. For instance, 10x leverage 10% profit, and 100x leverage then 100% profit same goes for the loss too. Choose wisely before blowing up your account. 

Risk management is important- 

If you are thinking that there’s no need to manage risk, and money while trading futures then you are wrong. You have to manage risk, as well as money in every kind of market. If you work wisely with the market keeping track of all the important factors including risk management then the market can do wonders for you. But if not then you will have to face losses, or blowed account. 

The main things you have to keep in mind while trading or investing are the risks and the money management. Both are equally important if you want to stick with it. 

Conclusion- 

Trading futures in crypto is a good option for someone who has good market knowledge. You can predict future prices and trade on future dates without owning them. But you also have to take care of the leverage because the higher the leverage, the higher the profit. Vice-versa for loss. 

You have to take care of the risk management and money management.