Futures Bootcamp: Learn and Share $10,000 in Cashback Vouchers
Futures Bootcamp: Learn and Share $10,000 in Cashback Vouchers
🤔 What is Futures Trading?
Futures trading is the act of profiting from price differences by predicting whether cryptocurrency prices will rise or fall. Instead of buying or holding the crypto, you can earn profits by making the right bet.
Meanwhile, traders can use leverage to magnify their capital. This can enhance their potential returns, but also raises the risks.
🧠 Example:
Alan holds USDT and predicts that the price of BTC will rise. He chooses to "go long" in the BTC futures market. If the BTC price increases, Alan will earn the price difference, even though he has never purchased BTC.
Click here to learn more about futures trading >>
💰 Go long or short? How can you make money from both rising and falling markets?
The advantage of futures trading is that, regardless of whether the market is rising or falling, there is a profit opportunity as long as you make the right bet.
📈 Buy/Long: If you predict the price will rise, you can "go long." This means you can buy a contract at the current price and sell it later at a higher price to profit from the difference.
📉Sell/Short: If you predict the price will fall, you can "go short." This means you can short a contract at the current price and buy it back later at a lower price to profit from the difference.
🧠Example:
Assume ETH is trading at 2,000 USDT, and Alan predicts ETH will drop.
- He shorts 1 ETH futures contract at the current price (using 1x leverage).
- When ETH drops to 1,500 USDT, Alan closes his position by buying back the 1 ETH futures contract at a lower price.
- In this case, Alan earns 500 USDT (excluding fees) from the transaction.
Click here to learn more about how to profit from going long or short >>
⚖️ What is Leverage and Margin?
With leverage, you can enter larger positions with less capital, amplifying both potential profits and risks. Let's say you open a position worth 100 USD with 10x leverage, the capital you are controlling is actually 1,000 USD. At CoinEx, you can flexibly choose 1x to 100x leverage, but we recommend beginners start with lower leverage (3x–5x) for better risk management.
Margin is the "collateral" you deposit to maintain your contract positions. When opening a position, you must deposit a portion of your funds as margin. There are two different margin modes, namely Cross Margin or Isolated Margin:
- Cross Margin: All available balances in your futures account can be used as margin. If your losses reach a certain level, the system will automatically add more margin.
- Isolated Margin: Margin is only applied to the current position. In the event of losses, the system won’t automatically add margin; you will need to do this manually.
🧠 Example:
Assume BTC is currently trading at 100,000 USDT, and Alan has 1,000 USDT:
- Without leverage, Alan can only buy 0.01 BTC. If BTC rises to 110,000 USDT, Alan will earn 100 USDT.
- With 10x leverage, Alan can open a 0.1 BTC position.
- If BTC rises to 110,000 USDT, Alan will earn 1,000 USDT.
- If BTC drops to 90,000 USDT, Alan will lose 1,000 USDT, resulting in a total loss of the margin (liquidation).
Click here to learn more about leverage and margin in linear contracts >>
💸 What is Funding Rate?
Funding rates are a periodic settlement mechanism between long and short contract traders, designed to balance market forces and prevent contract prices from deviating significantly from spot prices. At CoinEx, funding rates are typically settled every 8 hours. The funding fees are not charged by the platform but paid directly between users.
When long positions dominate (more traders betting on price increases), the funding rate becomes positive, meaning long position holders pay fees to short position holders.
When short positions dominate (more traders betting on price drops), the funding rate becomes negative, meaning short position holders pay fees to long position holders.
💡 If you hold a contract position at the settlement time, you must pay funding fees at each settlement.
🔔 Short-term positions minimize the impact of funding fees on profits, while long-term positions may face reduced returns due to cumulative fees over time.
🧠 Example:
- Alan goes long on a BTC contract with a position size of 10,000 USDT.
- If the majority of traders also go long, the funding rate is +0.01%.
- At the time of settlement (every 8 hours), Alan has to pay: 10,000 × 0.01% = 1 USDT. This fee will be distributed to short-position holders. However, if Alan has already closed the position before the settlement time, no funding fee is charged.
Click here to learn more about funding rates >>
⛑️ What are Take-Profit and Stop-Loss? Why are they so important to beginners?
Take-profit (TP) and stop-loss (SL) refer to automatically closing a position when a pre-defined price level is reached. These are important tools to lock in profits and limit potential loss for crypto traders, preventing emotional trading.
- TP: The trade will automatically close when the price reaches an upper pre-defined level, locking in profits before the market reverses.
- SL: The trade will automatically close when the price reaches a lower pre-defined level, limiting the potential loss.
It is advisable to set both TP and SL for every trade, especially for beginners in futures trading. This practice fosters a disciplined trading approach, minimizing hesitation and impulsive decisions.
🧠 Example:
Alan opens a long position of ETH futures contract at 1,500 USDT, with a total position worth of 1,500 USDT (using 1x leverage). At the time of opening the position:
- If he sets the TP price at 1,800 USDT, the position will automatically close when ETH rises to this level, yielding a profit of 300 USDT.
- If he sets the SL price at 1,400 USDT, the position will automatically close when ETH falls to this level, resulting in a loss of 100 USDT.
Click here to learn more about TP and SL in futures trading >>
🧭 How to master futures trading at CoinEx?
To trade futures at CoinEx, follow these 5 simple steps for a complete transaction:
- Log in to CoinEx and transfer funds to your Futures Account. Then, go to the Futures Trading page.
- Choose your trading pair (e.g., BTCUSDT), select the leverage, and set the order type (market or limit).
- Analyze the market direction and click "Buy/Long" or "Sell/Short."
- Set your take-profit and stop-loss levels (recommended for beginners).
- Submit the order to open your position. Once the price reaches your target, you can close the position manually or automatically to settle your profits or losses.
Click here to read Futures Trading Guide >>
🎯 Are you ready?
With the knowledge you've gained, you should now have a basic understanding of futures trading—it's time to put it into practice!
You can start by trying Demo Trading to familiarize yourself with the operations, or sign up for our Futures Tradeboard to compete with other traders and share in the 100,000 CET prize pool for generous rewards!
Get started now:
We are actively searching for talents with unique perspectives and innovative minds in the crypto field. If you possess these qualities, we welcome you to apply.