How to Trade on Binance Futures

Greetings PUBLISH0X community. Today, my topic is to explain the basics of trading on Binance Futures. But first, let’s see what’s BINANCE Futures and how to use it effectively.

What is Binance Futures?

Contrary to the common opinion, the only way of trading is not ‘buy the dip, sell the top’. There are different options to utilize. One of them is using the leverages. And Binance Futures lets you to the opportunity of using up to 125X leverage and maximize the profit, also the risk of maximizing the loss at the same time!

In a very basic manner of telling, adding leverage to your crypto asset holdings minimizes your main capital to invest but on the other hand, maximizes the ROI count. In the traditional way of trading, there is only 1 option to get profit. Buy something at a lower price and sell it on higher! But there is no choice to earn while the price is going down. But if you use Binance Futures, you’ll have the right of earning from both the price goes up and down. Let’s see how it works…

For detailed a guide on leveraged trading, please check my previous article ‘What Do ‘’Crypto Derivatives’’ Mean? Learning Leveraged Trading on Bityard’ on Publish0x.

Step1?? Open Binance Futures Account and Fund It

If you have a Binance account, please go to the ‘Wallet’ section and click Futures Wallet on the left-hand side. When you try to see your Futures Wallet, the warning will pop-up on the screen. Please read it carefully because futures trading can be hurting if you are not familiar with the basics. The warning you should read and accept is below:

If you still have not opened a Binance account yet, follow this link with a 10% commission discount for lifetime tradings. If you are a Binance user but never tried Futures trading before, follow the steps above to open a Futures account. And use the referral link to receive a 10% commission discount for the first month of leveraged trading.

After approving the warning, there are no more steps to be done. Now we’re on the second phase, funding the account. If you open your Binance Futures page for the first time, the default page is set as BTCUSDT Perpetual Futures. If you want to trade on Futures, you need some USDT tokens. USDT can be transferred from Spot account, can be deposited from external wallets, or can be borrowed directly from Binance. I assume that most traders have some USDT in their account to transfer. So please scroll down, check the ‘Assets’ section on the right, and click ‘Transfer’ to fund your account.

After that, you will face a screen that asks you to decide where and what to transfer. On the relevant screen, please select ‘from Spot Account to Futures Account’ and USDT as a crypto asset. Specify the amount to be transferred and go on.

Now, 50 USDT is transferred to my Futures account. No impediment enforces me not to open my first Futures position.

Step2?? Becoming Compatible with Futures Interface

As I said above, you have the right for opening your first position. But please go on reading to learn how to set position details not to be surprised in the future.

I separated the Futures interface into 4 different boxes that I think are the most important ones. At the top green box, you see some common features of the Binance exchange. We’re now on the Futures page but we can switch to the Spot Trading page or the ‘Activities’ page from the top green box. On the left green box, we see different markets already trading on Binance Futures. You can search for your coin, you can list them according to daily volume or price change, and you can add some of them into your own Futures Favorite trading pairs. When you add some pairs to favorites, it is shown just under the top green box immediately. The green box located on the right side is for trading. You will decide the order type, opening price, the way of position, the size of the position, and many more.

4th box is mentioned in a different color, red. Because it’s more important than the other ones in my opinion. On the red box, you see 2 different buttons to utilize. One of them is for deciding the leverage count and the other one is margin mode. There are 2 different Futures Margin Modes on Binance Futures; Isolated and Cross. Under the Cross Margin mode, all open positions are set to be under the same margin asset. If you select Isolated Margin mode, every single position owns its margin value, and no more shared margins available.

The second button is for deciding and switching the leverage count. You are able to leverage your position up to 125X on BTCUSDT Perpetual, 100X on ETHUSDT Perpetual, and 50X on other cryptos to USDT pairs.

The default margin mode is Cross Margin and the default leverage count is 20X. Please be sure that you can change both of them at any time before opening the position. If you have any position (even with a 1$ worth margin) you can no longer change it!

Step3?? Order-Making, Position Opening, and Closing on Binance Futures

As I mentioned above, the right-sided green box is to determine the details of the position. The picture below is taken under the Isolated Margin mode and 5X leverage with no other open positions on the ETHUSDT Perpetual pair.

As shown above, I have around 331 USDT at the time of writing on my Futures account. But I can use them up to 1655 USDT and open up to 1.22 ETH size positions. The math is so basic: 331 USDT is equal to 0.244 ETH now. But I use 5X, so they’re now worth 1.22 ETH! If my leverage count is higher, the maximum possible position size is bigger, also. Vice versa is always true…

Now, let’s assume that I think the price of Ethereum will go higher. I have 2 different options to make a profit. The first one is buying ETH with 331 USDT and holding its upper levels. The second is opening a LONG position and make bigger profits. If you open LONG at the price of 1355 USDT per ETH with all 331 USDT at once, you’re given a 1.22 ETH position.

Now again assume that you want to sell at the price of 1500 USDT per ETH. For the first scenario, you will gain about 31.9 USDT. But for the second scenario, the profit will be multiplied by 5 and equals 176.9 USDT. This is how you multiply the profit with leverage count. But please don’t forget that if the price of Ethereum goes lower when you have an open LONG position, you will face multiplied loss because of leverage using.

Please assume that you have the same open position above but the ETH price went down to 1300 USDT per ETH. For the third scenario, you will lose 12.1 USDT while holding on spot wallet. But the 5X leveraged position comes to you around 60 USDT loss. Please be aware that the situation will cause a huge loss of funds before starting!

You can visualize the possible Profit and/or Loss with the ‘Calculator’ tool. It’s located on the most right side of the screen. Please don’t forget that the LONG position creates bigger profits while the price is going upwards and the SHORT position creates bigger profits while the price is going downwards.

If you have an open position on any trading pair, it’s shown at the bottom of the Futures screen.

As you can see from the above picture, I’ve 2 different open positions currently. On the left, you can understand the way, leverage count, and the trading pair. For now, I have 2 SHORT positions (because the colors on the left are RED). BTCUSDT with 10X leverage and XRPUSDT with 6X is my positions for now. 2 different positions had created over 10 USDT profit at the time of writing.

Let’s say I want to close my open positions. I have 2 different options now, Market Close and TP Order. Market Close will close the position immediately and transfer the profit to my Futures wallet. But if you place a TP (Take Profit) Order, it is executed only the TP price comes! The last order is for SL (Stop Loss). If you don’t want to lose more funds than expected, you can set an SL order to close the position with a relatively lower loss.

Bonus Step For Newbies ??

You are told all the basic features of Binance Futures trading now. But here comes 2 different presents for newcomers. The first one is about $BNB. You can lower the trading fee by transferring BNB into your Futures account. The transfer of BNB is completely the same as transferring USDT. You must change the asset from USDT to BNB, that’s all. And the second one is an additional 10% discount from trading fees. If you have never traded on Binance Futures before, please register via using the referral link to receive a 10% discount special for the first month!

The Final Conclusion

This article is created to spread the awareness of trading on Binance Futures by utilizing my own experiences so far. None of the words above contain any kind of investment advice! Please DYOR (Do Your Own Research) before investing.

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