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How to Trade Binance futures?

Started by Bitcoin, Aug 17, 2022, 08:54 pm

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How to Trade Binance futures? Trading Crypto With Leverage on Binance futures.
We'll be going into more detail further below, but here's the quick guide to getting started with trading on Binance futures:
Create an account on Binance and head to the Binance futures section When opening your Binance futures account, use referral code coincodex to get a 10% discount on fees Fund your Binance futures wallet with USDT You're ready to start trading Bitcoin, Ethereum and more with leverage!
Crypto leverage trading.
Leveraged trading is not exclusive to cryptocurrencies, as it's also a well-established practice in traditional markets. When trading with leverage, traders borrow capital to enter a position that's larger than the capital they commit to the position. For example, when trading with 10x leverage, traders can enter a position worth 1 when committing 0.1 BTC. The initial capital used to enter a leveraged position (0.1 BTC in this example) is referred to as "margin".
The most common way of trading cryptocurrencies with leverage is through futures contracts. This instrument allows you to speculate on the price of a cryptocurrency increasing (going long) or decreasing (going short).
Trading with leverage is inherently more risky than trading without leverage (spot trading), and this risk is amplified by the fact that cryptocurrencies can be very volatile. While leveraged trading makes it possible for you to make bigger profits than if you were trading without leverage, you can also suffer bigger losses.
The pros of trading cryptocurrency with leverage:
You're willing to take on a higher risk for a chance at accelerated profits You want the option of making meaningful profits from smaller price movements You want to have the option of profiting from a cryptocurrency falling in price.
The cons of trading cryptocurrency with leverage:
You prefer a trading strategy with lower risk You're not interested in shorting cryptocurrency You're not interested in trading small price movements.
Trading crypto with leverage on Binance futures.
While crypto leverage trading used to be mostly limited to specialized crypto derivatives exchanges like BitMEX, many "standard" cryptocurrency exchanges like Binance have also started offering leverage trading. Binance has been able to leverage its massive existing userbase and quickly became one of the most active markets for Bitcoin futures.
Bitcoin futures trading volumes as of January 30, 2020. Image source: Skew.
One of the advantages of trading crypto with leverage on Binance is that you can trade many different cryptocurrencies, as Binance futures lists many popular altcoins in addition to Bitcoin. Binance offers up to 125x leverage for Bitcoin and up to 75x leverage for other cryptocurrencies listed on Binance futures.
In this guide, we'll be going through an example of trading the BTC/USDT futures contract on Binance futures. Technically, the contracts listed on Binance futures are "perpetual contracts" - they function very similarly to futures contracts, but don't have an expiration date.


1. Create an account on Binance.
You don't need a separate account for Binance futures, as you can use your existing Binance account - if you don't have one yet, you can get started here:
As long as you're withdrawing less than 2 BTC per day, Binance currently doesn't require you to submit any personal information apart from your email address (and potentially, your phone number). At the moment, Binance doesn't accept customers from the United States and some other countries (check your eligibility before creating an account).
2. Use the "coincodex" referral code to get a 10% discount on fees.
Head over to the Binance futures section of the exchange. Go to the "Open Futures Account" section in the bottom right corner of the interface and use the coincodex referral code to get a 10% discount on your trading fees .
3. Fund your Futures wallet with USDT.
After you've deposited some cryptocurrency to Binance, you'll have to acquire some USDT in order to be able to trade Bitcoin with leverage on Binance futures. After you get your hands on some USDT, head over to the "Wallet" section at the top of the Binance user interface and select "Futures". Then, Transfer the desired amount of USDT to your Futures wallet.
We recommend to start with a small amount until you get comfortable with the user interface.
4. Go to the Binance futures trading interface.
Now that you have some USDT in your Binance futures wallet, you're ready to go. Click the "Futures" tab on the top navigation bar.
Now, you're greeted with the Binance futures trading interface. We've highlighted 4 parts of the interface to get you started.
Here, you can select the contract you want to trade. We'll leave it at the default setting - BTCUSDT Here, you can adjust the amount of leverage you are using. This slider goes from 1x to 125x. Higher leverage means higher potential profits, but also a higher chance of losses. Here, you can place an order. You can either go long (you will profit if the price increases) or short (you will profit if the price falls). You can choose between market order, limit order, stop limit order and stop market order. Here, you can monitor the status of your position after your order is filled. Pay special attention to the Liq. Price - if the price of Bitcoin reaches this level (liquidation price), you will lose your entire position!
Click on the leverage button to adjust the leverage you will be using. As an example, we have reduced the leverage from 20x to 10x.
Click the "Cross" button to adjust your preferred margin mode. To start off, it might be a good idea to switch to isolated margin. This gives you less flexibility but can reduce the total amount of losses you can take when having multiple positions open at the same time.
5. Create a Bitcoin leverage order.
In this example, we will be using a limit order to enter a long position worth 0.01 BTC. We set the limit price at 7,937 and we are using 20x leverage, so entering this position will require 3.96 USDT - this is the maximum amount we can lose in the event that our position is liquidated. Of course, you can use stop orders to manage your risk. You can check out this tutorial from Binance to understand how different types of stop orders work and how they can prevent unnecessary losses.
6. Monitor your order.
In the picture below, you can see an example of an order that has been filled successfully. This position is worth 0.1 BTC and has a liquidation price of $4,686. On the right side of the tab, the position can be closed with either a market order or limit order.
7. Closing your position.
Closing a trade in profit (or loss) is simple. You just need to click the yellow "market" button next to an open position.
This trade went against us, as we lost $8.49 from our $25 balance. We'll hit "market" and get out of this bad trade!
You can see your Realized profit in your trade history. In this example, we can see that we lost a total of -$12.89 to place this trade. The fee was also $1.02. What a bad trade! However, it was still worth it to show you how this system works.
Here is our final balance.
Tip: Always use stops!
When trading cryptocurrency futures with leverage, you should always use what is known as a "stop order". This is used to manage risk and will automatically close the trade if the price moves beyond that figure.
To do this, click the Stop Market tab:
Now, in this example, our trade is short. To cancel the trade, or "stop" it, we need to go in the opposite direction which is "long". You can see that at $10,300, the allotted stop will close the entire trade as we put the slider to the max size. If the price reaches $10,300, we will be out of the trade with a loss, but at least we will protect the rest of the balance in my account.
What's the difference between margin trading on Binance and Binance futures?
Binance futures is not the only way to use leverage on Binance. You can also use the exchange's margin trading functionality - this will give you access to many more trading pairs, but the maximum allowed leverage is much lower. Binance's margin trading pairs are denominated in either BTC or USDT.
The bottom line on crypto leverage trading.
While it may be hard to wrap your head around Bitcoin leverage trading at the start, this guide has hopefully made the process a bit easier to understand. Thanks to the user-friendly interface, trading Bitcoin with leverage on the Binance digital asset exchange is relatively simple.
As always, make sure to stay on top of your risk management and don't leverage trade with funds you are not willing to lose! This is especially true if you're using high leverage.
If you're looking to leverage trade cryptocurrencies other than Bitcoin with leverage, take a look at our guides for the rest of the supported assets on Binance futures: