How to Trade Cryptocurrency Futures on LBank
The cryptocurrency trading space is currently experiencing unparalleled growth. LBank Futures stands at the forefront of this evolutionary phase. Mastering the navigation of LBank Futures could open up new doors for both novice and seasoned traders, presenting them with potential opportunities to capitalize on. This guide will help you navigate the LBank Futures platform, highlighting the steps to enter and exit trades.
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.
- 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.
- Trading
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
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.
Getting Started on LBank Futures Platform
To begin trading crypto futures on LBank, follow these steps:
- Create an Account: Visit LBank’s official website, click ‘register’ and sign up for an account using your email address. Make sure to secure your account with strong passwords and two-factor authentication for added security.
2. Deposit Funds: Deposit cryptocurrencies into your LBank account to use as collateral for trading futures. LBank supports various cryptocurrencies that you can use to fund your futures trading activities.
3. Navigate to Futures Trading: Once you’ve funded your account, navigate to the “Derivatives” section on LBank’s platform.
4. Choose the Trading Pair: Select the cryptocurrency pair you want to trade as a futures contract. For example, if you’re interested in trading Bitcoin futures, choose the appropriate BTC/USDT futures contract.
5. Select Order Type: LBank offers different order types, including market orders and limit orders. A market order executed at the current market price, while a limit order allows you to set a specific entry price for your trade.
6. Set Entry Price: If using a limit order, specify the entry price at which you want to enter the trade. You can choose a price below the current market price for a long position or above the market price for a short position.
7. Adjust Leverage: Determine the leverage you want to use for your trade. Leverage allows you to control a larger position with a smaller amount of collateral. Be cautious with high leverage, as it amplifies both profits and losses.
8. Choose Position Size: Decide on the size of your position based on your available collateral and risk tolerance. LBank’s platform will calculate the required margin based on your selected leverage and position size.
9. Set Stop Loss and Take Profit: If desired, set a stop loss and take profit level for your trade. These levels help you manage risk by automatically closing your position if the price moves against you (stop loss) or reaches a certain profit level (take profit).
10. Confirm and Place Order: Review all the details of your trade, including entry price, leverage, position size, and risk management settings. Once you’re satisfied, confirm and place the order.
11. Monitor and Manage Trades: After placing the trade, monitor the market’s movements closely. You can adjust your position, modify orders, or close the trade based on your analysis and strategy.
12. Funding Rates: Keep an eye on the funding rates, which periodically adjust based on market conditions. Funding rates can impact your profit or loss when holding positions for an extended period. Positive funding rates mean long traders pay short traders, and vice versa.
Wrapping Up
Trading crypto futures on LBank involves careful planning, analysis, and risk management. Make sure to thoroughly understand leverage, position sizing, and the impact of funding rates on your trades. Stay informed about market trends and news to make informed decisions. Remember that trading involves risks, and it’s important to only invest what you can afford to lose.
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.
