Crypto futures guide

As you know, cryptocurrency is a great way to invest money now, you can even make a profit after just a couple of days. However, what if we tell you that you can earn money on Bitcoin even when its price is falling? 

As you know, cryptocurrency trading activity provides two ways to trade: spot and futures. In this guide, we will focus on the second, in particular, dealing with cryptocurrency futures. 

As for classic trading style, we mean spot, everything is simple, but futures point to the more advanced level, about which we will talk today. Let’s discover the pros and cons of cryptocurrency futures trading and compare it to the spot market. 

Before reading this article, ask yourself if you are ready for futures trading?  

Check out the info below to get familiar with the process of futures trading and why it is not recommended for newbies to trade crypto this way.

Cryptocurrency futures trading

What is a futures contract? A futures contract is a legal agreement to buy or sell a particular commodity asset or security at a predetermined price and at a particular time in the future. Futures contracts are standardized for quality and quantity to facilitate trading on a crypto futures exchange.

With cryptocurrency futures, you are trading derivatives. These are contracts based on the value of an underlying asset, in this case, of crypto tokens. These traders will be opening trades to buy or sell a contract at a particular time in the future and a predicted price.

The cryptocurrency futures market also provides an opportunity for users to increase their deposits to the market by using leverage. Users can trade with margin and increase their earnings if their price prediction is true. 

Spot VS Futures

The spot market is an area where you can earn your money on currency price changes. It is simple – buy when everything is falling, sell when everything is reaching its tops. In simple terms, it is the underlying market where bitcoins are exchanged. 

Cryptocurrency futures

Features of the spot market:

  • The spot market seems to be safer, as it provides less risk than the futures market. It is almost impossible to lose your money, which makes it a better way of investing. 
  • An area for bulls, where you can earn only when the price is rising. Who are the bulls? Bulls are traders who earn in the period of generally rising prices. 
  • Newbies are welcome. As we said before, it is almost impossible to lose money at the spot market if cryptocurrency is bought in time, which makes this way suitable for dummies. Don’t believe the hype and never buy anything on high, even if you have deals with questionable altcoins.

How does the futures market work? Loosely speaking, you invest in your price predictions, and your reward is based on your accuracy. How can we describe the cryptocurrency futures market?

  • High risk and liquidation feature. Roughly speaking, futures trading is like a lottery. Doubtless, high leverage trading can make you rich, but while you are expected to earn a lot, you should also be ready to burn all your deposits after liquidation.
  • An area for bears provides an opportunity to earn even when the selected currency’s price is rising and going down at the same time. Who are the bears? Bears are traders who earn on the crashing of the market. 
  • Newbies are not welcome. You should have a lot of experience and particular skills in technical analysis to trade cryptocurrency futures. If you are a newbie, only proven futures trading signals can save you. During the alt season, spot exchange seems to be profitable enough, according to the extremely fast rise of different coins.

Futures trading with crypto signals

You can always trade like a king everywhere with proven trading signals. Being armed with the correct cryptocurrency signals will allow you to feel like a king even during the bear run when the whole market crashes. 

Spot VS Futures

How to determine a proven service? Don’t be shy and ask for the statistics and trade results. Don’t trust empty promises, believe only numbers. 

Will crypto signals make you rich? It is entirely possible, but remember to trade wisely and do not be greedy. 

Finally, we want to summarize that cryptocurrency futures trading deserves attention. Despite its disadvantages, it can be very profitable when traded correctly.

Also, we want to repeat that you should be ready for futures trading, otherwise you will burn all your deposits, which will demotivate you from trading activity. You will only become successful if it brings you joy.

Similar crypto articles

Leave a Comment