Contents of this article:
Futures is one of the newest financial instruments in the cryptocurrency market, but traders are actively earning on it today. You need to study its features, understand how futures differ from spot, and why many traders choose this option to trade on the futures market successfully without losing your deposit.
What are futures?
Futures is a contract for the purchase of an asset, which fixes the future price of the cryptocurrency and the date of the transaction. Traders gain access to assets without owning them using cryptocurrency futures. This financial instrument is similar to stock indices when the trader assumes the risks of the asset value. The investor uses cash, but he does not trade crypto directly. A futures contract is a price, equal to a particular coin.
The ability to protect the deposit from negative changes in the value of the asset and extreme volatility is the main feature of futures trading.
Traders can buy cryptocurrencies at a low price and put it up for sale when the value rises due to its high volatility.
Why are futures better than spot and what is the difference between them
Another popular way to trade in the cryptocurrency market is sports in addition to futures. In this case the crypto is bought here and now, the transaction is made instantly, and the participants can only dispose of the assets that they currently have. The cost of cryptocurrency on the spot market is relevant at the current moment, it depends on supply and demand, the trend in the market and the latest transactions.One of the main differences between futures trading and spot trading is leverage, which attracts investors to the futures market. Leverage helps to use the deposit effectively. A trader must spend tens of thousands of dollars, for example, to buy a whole bitcoin on the spot market. A player can open a buy position by paying only a fraction of the coin’s value using leverage by choosing a futures contract. The greater is the leverage, the cheaper the deal will cost the trader.
Advantages of the futures market over the spot market:
- Ability to earn in any market trend. A trader trading futures can profit from the rise and fall in the value of an asset.
- Leverage. A trader does not have the opportunity to use leverage, while investors get access to an asset by paying only part of the spot market.
- Hedging. Traders can hedge an investment portfolio in the futures market, that is, open positions opposite to the current open contract, thereby protecting the investment portfolio from risks.
Futures trading: learn with a mentor or on your own?
You can learn to trade futures on your own, but it will take a lot of time and effort.
Self-learning is hundreds of articles studied, many of which are of no practical use, high risks of losing a deposit on the first transactions already, mistakes and constant stress.
The main advantages of learning with a mentor are structured information and up-to-date knowledge, expert advice, support, the opportunity to ask questions, constructive criticism, and correcting beginner mistakes.
What knowledge and skills does a beginner get from mentors?
A beginner does not have to search and process a huge amount of information independently learning to trade futures with a mentor. He receives practical knowledge and only up-to-date data, using them in trading. The mentor helps to develop an effective trading strategy, understand the types of investments to diversify the portfolio, start earning with a small deposit, and reduce risks.
Crypto Crew mentors have developed an effective investment and trading training program for beginners in the futures market.
A novice trader learns how to compose an investment portfolio correctly, independently analyze the market and trends, choose promising and safe transactions, and not succumb to the manipulations of large market players studying with us.