DETROIT – Trading futures is a popular financial tool, the essence of which is speculation on the future asset’s price. An underlying asset for futures trading can be gold, oil, silver, grains, or any other commodity whose price can be predicted.
Cryptocurrencies can also be underlying assets for futures trading. Their prices are difficult to forecast because they are not controlled by the government. That is the reason why cryptocurrencies are so volatile. However, experienced investors successfully predict future crypto rates by investigating market trends, patterns, crypto charts, and historical indicators.
How to trade crypto futures? Suppose you made a tech analysis of a coin and forecasted that its price would grow in the future. You make a futures contract and indicate the price you think the coin will achieve by some certain point in the future (the day is specified in the contract). When the expiration day comes, and the price really reaches the level you pre-set to it, you sell your holdings and receive a profit.
Another case is when your analysis shows that the price will drop. Similarly, you make a contract where you indicate the future price and the expiration date and sell your holdings until the date comes. Then, if your prediction comes true, and the rate really drops, you buy the assets back at a low price.
Best Crypto Futures Trading Platform
Here are the platforms enabling trading futures:
- Binance
- WhiteBIT
- Kraken
- FTX.
WhiteBIT is a young crypto exchange which is the largest platform in Europe. It offers popular crypto assets like BTC, ETC, SOL, etc. The maximum leverage WhiteBIT offers is 20X. So users can multiply their initial investments 20 times. Leverage allows gaining huge profits in trading futures while at the same time bearing huge risks because if the asset’s price moves in the opposite direction, a trader’s position is liquidated.
You can use the WhiteBIT demo account to practice different leverage and trading tools. It implies using demo tokens that cannot be cashed out or deposited. So users receive a lot of practice without fear of losing their own funds.
Article provided by Kristina Rigina
