Understanding futures trading mechanics in cryptocurrency
The world of cryptocurrencies has exploded in recent years, and prices have risen to the stars and hit a rapid pace. One of the most popular forms of discussion of digital activities is futures, which allow people to welcome their price movement before they occur. But what exactly the cryptocurrencies and how do they work? In this article, we break down the mechanics of the future cryptocurrency trade, including key concepts, strategies and risks.
What is cryptocurrency?
Cryptocurrency is a digital or virtual currency that uses encryption for security and decentralized, which means that a single government or institution does not control it. The best known cryptocurrencies are Bitcoin (BTC), Ethereum (ETH) and Litecoin (LTC). These digital currencies operate on a Peer-to-Peer network, allowing users to send and receive funds without mediators.
How does futures work work in the cryptocurrency?
Trading futures transactions include speculation at the price of cryptocurrency before it is actually replaced. There are two main types of future contracts: Spot and Forward. On -site contracts require the purchase or sale of cryptocurrencies for current market prices, while contracts require a future contract to buy or sell a currency at a predetermined price.
Key concepts for Cryptocurrency futures transactions
- Market hours
: There are two main market hours in the cryptocurrency trade: the US market (10:00 ET) and the Tokyo market (20:00 ET). The reason for this is that there are important exchanges such as the New York Stock Exchange (NYSE), Nasdaq and Binance are in the United States.
2 They help combine customers and sellers by providing a commercial platform.
- Types of order : There are two main types of order types: market orders (purchase/sale at the current market price) and limits (setting a specific price). Market orders perform immediately, while limit orders can be implemented until the market has reached the specified price.
- Rargin Requirements : Margin requirements vary depending on the replacement and balance of the trader account. Some stock exchanges require merchants to maintain marginararates of 2: 1 or more.
Strategies in Cryptocurrency Future Trade
1
Trade of one day : Day commerce will one day with the purchase and sale of cryptocurrencies, trying to profit from price fluctuations.
- Swing Trading : Trading Swing includes detention positions for an extended period of time, usually several days or weeks to profit for trends or models.
- Position Trading : The position trade includes the purchase and possession of cryptocurrencies for a longer period of time, taking advantage of their long -term tendencies.
- Size : Momentum means creating smaller operations in a short period of time and trying to profit from small price movements.
The risk of cryptocurrency futures trade
- Mercato Volatility : Cryptocurrency prices can flow quickly and unpredictable, making it difficult for service providers to provide market movements.
- Risk of liquidity : Liquidity suppliers are not always able to fill in orders or sell the desired price, which leads to the risk of liquidity.
- Risk of losing money : Future transactions are the risk of capital because losses can quickly add and worsen the balance of the merchant account.
Tips for beginners
- ** Discover cryptocurrency markets, trading strategies and risks before entering the market.
- Defining realistic expectations : Understanding that cryptocurrencies are exposed to significant marks and do not guarantee the yield.
- Start with a small account : start with a small account to risk too much capital in practice trade.