Futures is a popular financial instrument that is speculation in the essence. However, there is a lot of knowledge, investigation, and analysis behind this speculation. Predicting the future asset’s price is not an easy task. Traders must learn the history of how the asset’s price behaved in the past, find patterns, investigate charts, conduct tech analysis, and be aware of the current market situation and the news background, which are also affecting crypto coins rates. The complexity of analysis requires expertise, which is why most successful traders investing futures are experienced people working with the crypto market for some years.
Beginners may find crypto futures trading too complicated, but in this article, we will try to explain it in simple terms.
The Essence of Crypto Futures Trading
Crypto assets are highly volatile, but based on tech analysis and all the factors mentioned above, experienced investors can forecast future price movements.
For example, one believes the coin’s rate will grow in the future. Then one makes a contract and agrees to sell the asset at a pre-determined price on some certain day. The price and the date are documented in the contract. When the day comes, and if the trader’s prediction was correct, one receives income.
Another trader believes the asset’s rate will drop soon. So one sells his holdings and concludes a contract to buy assets on a certain day and at a specific price. If his prediction is correct and the asset’s price really drops, one buys assets back, receiving a profit. That is how crypto futures trading works in simple terms.
There are some popular strategies for crypto futures trading:
- Breakout
- Long and short
- Spread
- Pullback
- etc.
How to invest in crypto futures? First of all, learn the basic concepts of the crypto market and be able to read charts and analyze them. Next, you need to have enough experience. The best way to do that is to register on the WhiteBIT crypto platform. It provides all the tools for futures trading and a demo account for everyone willing to try this complex financial instrument.
