Cryptocurrency futures are distinct financial trading instruments that offer leverage, allowing traders to amplify their potential returns. Futures contracts are used for speculative purposes, enabling traders to take positions on the future direction of a digital currency or for hedging against potential price fluctuations inherent in cryptocurrencies.
Unlike other cryptocurrency investment tools, futures contracts are established financial instruments that are traded on exchanges. If you wish to trade them, you will need to have an account with a futures reliable crypto exchange platform such as LBank. Whether you’re looking for a seamless, smooth user experience or leveraged futures trading, LBank Futures offers a wide range of products on a robust and high-performance trading platform.
This guide will walk you through the basics of LBank Futures and teach you how to place your first trade.
What Are Futures Contracts?
Crypto futures contracts are financial derivatives that allow traders to speculate on the price of cryptocurrencies without owning the underlying asset. These contracts are agreements between two parties to trade a certain amount of cryptocurrency at a set future period or price.
The core basis of futures contracts lies in predicting whether the asset price will increase or decrease in the future. Trading in crypto futures involves three basic steps:
- Entering into a contract
A crypto futures contract consists of lots of underlying assets. For example, Bitcoin futures have Bitcoin as its underlying asset, and the same principle applies to Ethereum futures with Ether as its underlying asset.
2. Payment of Margin
A buyer of the futures contract just pays the margin amount and not the entire value of the contract. The margin is usually a percentage of the contract amount and is prescribed by the exchange.
Depending on the price movements of the underlying asset, your margin amounts to either an increase in price or a price decrease. Such amendments to your margin amount are undertaken until either expiry of the contract or the contract sale.
Ultimately, futures contracts offer several advantages over traditional spot trading, including the ability to trade on margin and leverage and potentially profit from both rising and falling markets.
LBank Futures is a cryptocurrency derivatives trading platform that offers a variety of futures products, including perpetual contracts and futures contracts.
If you are new to LBank Futures, making your first trade on the platform can be daunting. As such, here is a step-by-step guide on how to make your first trade on LBank Futures.
- Create an account
If you already have an LBank account, you can simply proceed to open an LBank Futures Account. However, if you are new to LBank, you will need to create an account.
Visit the LBank website and sign up by providing your email address and a strong password.
After that, you will need to verify your email address and complete the KYC (Know Your Customer) process, which involves submitting personal identification documents such as a passport or driver’s license.
2. Open a LBank Futures Account
3. Fund your account
After completing the account opening process, you can deposit funds into your LBank Futures account.
LBank Futures accepts a range of cryptocurrencies, including Bitcoin (BTC), Ethereum (ETH), and Tether (USDT), among others. To deposit funds, click on the “Deposit” button in the top right corner of the website and select the cryptocurrency you want to deposit.
Copy the deposit address provided and send the desired amount of cryptocurrency from your wallet to the deposit address.
4. Navigate to the futures trading page
After funding your account, you can navigate to the futures trading page by clicking on “Futures” on the top navigation bar.
On the futures trading page, you will see a list of futures products that you can trade. Click on the futures product you want to trade to open the trading interface.
5. Make Your First Trade
Upon verifying and funding your LBank account and transferring funds to your LBank Futures wallet, you’re ready to make your first trade.
To make your first trade on LBank Futures, go to LBank Futures and select your preferred trading pair, such as BTC/USDT or ETH/USDT Futures Contracts.
Once you are on the trading interface, you can place your first trade. There are two types of orders you can place on LBank Futures: limit orders and market orders.
A limit order involves buying or selling a futures contract at a specific price. To place a limit order, enter the desired price, quantity, and order type (buy or sell) on the order form. You can also set additional parameters such as time in force and stop loss orders.
A market order involves buying or selling a futures contract at the current market price. To place a market order, select the market order tab on the trading interface, enter the quantity, and select the order type (buy or sell).
6. Monitor your trade
After placing your order, you can monitor your trade on the trading interface. The trading interface displays real-time information about the futures contract, including the current price, order book, and trading history.
You can as well set up alerts to notify you when the price reaches a certain level.
Crypto futures offer great ways to amplify profits. However, it’s important to note that futures trading carries a high level of risk, and traders should have a clear understanding of the risks and potential rewards before engaging in futures trading.
LBank’s risk management tools also make it easy to navigate through the market. However, making your first trade on LBank Futures can be challenging if you are new to the trading space.
These steps will essentially help you navigate the platform and place your first trade with confidence. Also, it’s important to do your own research, understand the market dynamics, and carefully consider your risk tolerance before entering the futures market.
Disclaimer: Derivatives are often volatile, and this can be a risky investment. The information provided in this article is solely for educational purposes and shouldn’t be regarded as financial advice.