Binance Futures Trading A Quick Review

By Author: Jennifer J. Horton
Total Articles: 2
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Cryptocurrency trading has become prevalent these days. And, because of its volatile nature, more traders are getting into to it.

While in the traditional trading of stocks, traders have to wait for a day or two to see a percent change in price. Such quickness of cryptocurrencies is making it a fun game for traders who love immediate profits. To invest in the crypto markets, you need some expert knowledge and the right strategy to earn profits.

Tons of cryptocurrency and trading strategies are offered by the best crypto exchange platforms with the promise to make you rich. The best crypto trading platform makes sure that you can buy and sell cryptos easily.

If you want to maximize your chances of winning, you need to use advanced strategies. Cryptocurrency exchanges like Binance are offering a lot to traders to make profits like futures and margin trading, stop loss, OCO orders, and more.

Binance is one of the most popular and largest cryptocurrency exchanges in the crypto trading market. During the last few years, this platform has been expanding its services. Recently Binance has launched Binance ...
... Futures which is the fastest-growing crypto derivative by trading volume.
It allows traders to use leverage and to open both long and short positions. Currently, it offers the highest leverage of 125x margin among major crypto exchanges. Binance offers more than 140 cryptocurrency assets that can be traded for both long and short with perpetual contracts.

The best cryptocurrency exchange like TrailingCrypto offers a set of trading strategies for Binance Futures, ensuring a seamless trading experience. 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.

Before diving deep into Binance Futures, how to use it, and how it is possible to improve trading strategies using Futures, let’s understand:
What is Futures Trading?

Futures Trading

Futures are the contracts related to specific crypto assets, allowing traders to buy or sell an asset at a particular or predetermined price as well as the date in the future. Usually, this is used by traders to hedge risk. The futures contracts are the kind of bet which enables traders to wager upon a future price of the said crypto coins.

The futures market doesn’t allow users to directly buy or sell any digital asset. Rather, they are trading a contract representation of those, and the actual trading of the crypto coin/asset will happen in the future when the contract is exercised.

The futures contract outlines an agreement to buy or sell cryptocurrencies at a certain price. The futures buyers assume the commitment to buy the cryptocurrency associated with the contract, while the sellers assume the commitment to deliver the relevant crypto asset upon the expiration of the contract.

Binance Futures

It is a part of the Binance exchange that lets users trade Futures for a range of cryptocurrencies. All deposits are done via the Binance platform from where the traders transfer USDT from their Binance spot USDT wallet to the Binance Futures USDT wallet.

Why trade on Binance Futures?

There are a few reasons why the traders must consider trading Bitcoin (BTC) Futures:

• Shorting BTC and other cryptos: Hedge your positions and improves your risk management to protect your crypto portfolio during the bear markets
• Opening a leveraged position: Trade without owning the funds
• Because of leverage, you need not to keep the larger amount of BTC on the exchange platform

Key features of the Binance Futures platform

Let’s have a look at the key features of the Binance Futures exchange playroom:

• Binance Futures exchange is very easy to navigate through making it suitable for the beginners as well as advanced traders. It allows them to go long or short on the supported crypto assets.
• It offers 2 Futures platform

1. USDT Futures
2. Coin Futures

• Binance Futures also support margin trading, OTC, spot wallet, and P2P trading.
• In Binance Futures, users can even make deposits via credit cards, bank transfers or external wallets. FX risk is removed at this platform as it supports the deposit of major fiat currencies. Once you gave deposited in the Binance account, you can easily transfer USDT to the Binance Futures trading account.
• Special and strong emphasis is laid on the security part in Binance Futures

Binance Futures trading gives different ways to the traders to earn profits on cryptocurrencies. As we all know that the price for Bitcoin or any other crypto asset doesn’t always increase, and may experience severe downward price action. With Binance Futures, traders can earn good profits whether the prices of cryptocurrencies move up or down.
To start trading on Binance Futures, the traders have to open an account on Binance Futures.

How do I create an account on Binance Futures?

Getting started on Binance Futures is easier, but before opening an account on Futures, one must have a regular Binance account.
If you are new to Binance platform, either install the Binance app on your system, or simply go to the Binance official website, and follow the below steps:

• Click on the ‘Register’ tab in the top right corner of the web page.
• Enter your email id and password
• Now click on the tab ‘create account’
• You will receive a verification code on your email soon. Now, follow the instructions here and complete your registration on Binance.

After opening your account on Binance, click on the Futures option on the top of your web page. Or you can also click on the Futures icon at the bottom of your home screen on the Binance app.

Here you will see Binance Futures interface. To open an account, simply click on open now, and your Binance Futures account is opened.

Binance Futures Trading Interface

In the top section of the Futures platform, the traders can access the main menu, which is linked to the other pages on the website. This section is useful as it provides traders with several educational tools, and historical price information that can be used to establish trading strategies.

To the right side of menu, traders can access their personal information, such as wallet balances, dashboard, etc.

Available contracts

Under the menu section, traders can select between the futures contracts which are used in an active position. Hovering over the name of asset will show the list of potential trading instruments, and users can scroll down this list to see all the asset choices currently available.

Price chart

The price chart panel here on the Binance Futures platform allows traders to monitor price activity in the crypto market in conjunction with indicators which can help traders to build strategies using the technical analysis.

Order Book

Next, you will find the order book panel which allows traders to visualize a display of the market’s current order depth. Click on the Depth tab, and view the characteristics of the order books which are currently tracking various crypto assets.

Open positions

Near the bottom of trading platform, you will find the open positions panel. For active traders, this is an important section as it show their account’s potential for risk exposure. When the new trades are opened, the market’s price parameters associated with the open positions will populate in this field.

Place order/margin ratio

Finally, see the right-side of the Binance Futures trading platform to find out the place order and margin ratio panels.
In the place order panel, traders can select the trading asset and price to buy or sell position. Below this section, there is margin ratio panel. This panel lets the traders monitor the potential risks for a position.

How to trade on Binance Futures?

To place trades on Binance Futures:

• Firstly, you need to select an asset from the drop-down box under the main Menu. This will occupy the place order section of the platform with your chosen cryptocurrency trading.
• Now, select the trade order size and include take profit or stop-sell level if required.
• Finally, click the Submit button, and new trade will be visible in the open positions tab of your Binance Futures platform.

The traders can also use ‘Buy’ and ‘Sell’ buttons in the price chart panel for the quicker access. The specific trading parameters can be chosen from the pop-up window which allows the traders to execute their trade.

Binance Futures specializes in trading of leveraged perpetual futures account. Once registered, you can take both long and short positions on all the supported cryptocurrencies. It is important to note that:

• Binance supports all trading styles
No matter if you are a novice or expert trader, Binance Futures offer you a platform which is fast, secure, and easy-to-use.
• Binance supports all the advanced order types

This platform was created at the same level as the institutional platforms. At this platform, traders are offered the same level of sophistication, and several advanced order types including market order, conditional orders; limit orders, etc. for entering trades in the best possible ways and managing risks on open positions.

What are the trading fees, and how they work?

The best part of the Binance Futures trading platform is the fee schedule. In addition to the promotional trading discounts which are periodically made available, the Binance Futures platform operates with the gradual maker/taker fee structure based on the size of each crypto asset position.

While trading on this platform, it is important to remember that the fee is charged at the time of both opening and closing the trade.

Let’s understand it with an example:

A Bitcoin trade of less than 250 might incur maker/taker fees of around 0.020% and 0.040%. The traders will be charged a fee of 0.020% if the trade is opened, and 0.040% if the trade is closed.

The fee charges vary based on the position size, and if they are not tied to leverage in any way. Trading fee on Binance Futures is updated each day.

How to fund your Futures wallet with USDT?

So, you have deposited some cryptocurrency to Binance. Now, you are required to acquire some USDT to trade Bitcoin with leverage on Binance Futures. After you get your hands on USDT, make sure to move to ‘wallet’ section at the top of Binance users interface and select Futures. Here, you can transfer the desired amount of USDT to your Futures wallet.
Make sure to select with a smaller amount until you get comfortable with the Binance user interface to avoid risks.

Binance Futures contract

Trading futures is an alternative to actually buying or selling the underlying crypto. In spot trading, you earn profits by buying Binance coins at low price, and selling it at a higher price. This kind of trading works well in the rising market. However, in the bear market, there is no trade possible in spot trading. Furthermore, leverage trading is also not possible in spot trading.

Trading crypto assets via Futures have several advantages. Let’s have a look at these:

• Trade profitably in all market conditions

By going long in Binance futures, you can profit on the rising prices. And, when the price is falling, you can earn profits by going short. This feature enables you to navigate all type of market conditions profitably. And, there is no way of profiting from the falling prices is spot trading. So, futures trading are better to earn profits.
• Hedge price risk

If you are a HODLer, you can still use futures to mitigate price risks. Say, you hold BNB. Going short on BNB Futures will let you mitigate the risks if the price of BNB is falling. In this case, a short futures position acts as a downside protection by locking effectively the $ value of your portfolio without selling the coin.
• Amplify trading gains with leverage

Leverage enables you to open positions which are bigger than your trading capital. If you can open a position that 100 times bigger than your trading capital then you have 100x leverage available. The maximum allowed leverage on Binance platform is 125x.

Adjusting leverage on Binance Futures

Binance Futures allows traders to adjust leverage manually for each contract. To choose the contract, one may go to the top left of the page and hover over the current contract which is set 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 20x by default. Specify the leverage amount by adjusting the slider, now click on confirm.
It’s important to note that the larger is the position, the smaller is the amount of leverage that you can use. Similarly, the smaller the position size, larger is the leverage that you can use. Using higher leverage carries the higher risks. And, the beginners should carefully consider the amount of leverage they use to avoid risks.

Why trade Futures?

Let’s understand why to trade Futures:

Leverage

Futures offer many advantages over regular cryptocurrency trading. Let’s understand it with an example:

Say you have 10 BNB in your account, and the price of BNB increases from $20 to $20.1

This means that you can made a profit of 10x$(20.1-20)= $1

Imagine, these BNB allow you to trade 10- BNB and price moves from $20 to $20.1.

Here you will earn a profit of $10

So, with leverage trading on Futures, you can make significant profits with small market fluctuations and a small trading budget.

• The leverage varies according to the crypto contract. Below are the popular ones:
• Bitcoin leverage of 125x
• Ethereum leverage of 75x
• XRP leverage of 75x
• Bitcoin Cash leverage of 75x
• Eos leverage of 75x
• Litecoin leverage of 75x
• TRON leverage of 75x
• Ethereum Classic leverage of 75x

Shorting

In Binance Futures, even without owning a certain crypto asset, you can bet against its performance. Let’s illustrate this with an example:
Say you expect BNB to drop from $ 20.1 to $20; you can open a short position. This means, you can sell BNB without even having them in your account. Here you are not selling BNB but the future based on your prediction.

Trading modes

Futures trading offers two different trading modes including cross margin trading and isolated margin trading by making use of the Binance trading bots.

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 in the market and unnecessary liquidations, Binance Futures use last price and mark price.

The Mark price is designed to prevent the manipulation while on the other side, last price makes reference to the last price at which a specific contract was traded.

This would calculate the realized profits n losses (PnL) which you might have.

Liquidation prices and unrealized PnL are calculated based on Mark price, which gathers data from a wide range of data providers in market.

Withdrawal process

The withdrawal process at Binance Futures is very easy:

• Click on Transfer tab in the bottom right corner of the Binance Futures page
• Set the amount that you wish to transfer
• Click on confirm transfer

After this, you should be able to see the balance added in your wallet shortly.

Binance Futures order types and how to use them

Binance Futures offer a variety of order choices when trading futures contracts. Let’s have a look at them individually:
• Limit order
Binance offers users the flexibility to set price at which they want their pending orders to execute. In this order type, you book an order with a specific limit price. The trade will be executed if the market reaches your limit price, if you place a limit order. This order type can be used to buy an asset at a lower price, and then selling it at the higher price than the current market price.
• Market order
This is an order to buy or sell the crypto asset at the best available current price. This order type is executed against your limit orders which were placed on the order book in the past. While placing market order, you will have to pay fees as a market taker.
• Conditional orders
Binance offers its traders to use various advanced conditional orders on the platform. With this order type, you can get into or out of the market once the predefined conditions set by you are met. The supported conditional orders are:

1. Post only
2. Close on the trigger
3. ImmediateorCancel
4. GoodTillCancelled
5. FillOrKill

Binance Futures/leverage trading with TrailigCrypto
If you choose a third-party profit or personalized strategy, you can not only automate it using TrailingCrypto bots but you can also earn more profits on it taking advantage of the leverage. Using higher capital and leverage can maximize your returns.

The Futures trading with crypto trading bot lets the traders divide the funds into smaller parts and buy the asset at fixed intervals.
You can make a personalized strategy or the third party strategies in TrailingCrypto. With personalized trading, use 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 account at TrailingCrypto to Binance Futures. Once an appropriate exchange is successfully connected, the bot will activate the leverage functions. In the third party strategy, you can also automate trading with third-party signals and connect to the Future exchange to use leverage.

To trade on Binance Futures 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.

Conclusion

Without a doubt, the Binance Futures trading platform is the best one in the crypto trading market. The numerous products, innovations, low fees, and features, introduced in this platform have set it ahead of its competitors.