From the LBank blog.
Cryptocurrency futures are distinct financial trading instruments that offer leverage, allowing traders to amplify their potential returns. Futures contracts are used for speculative purposes, enabling traders to take positions on the future direction of a digital currency or for hedging against potential price fluctuations inherent in cryptocurrencies.
For those new to futures trading and eager to embark on their journey through the LBank Web Platform, you’ve arrived at the ideal resource. To engage in futures trading, it is important to have an account with a reputable cryptocurrency futures exchange such as LBank. In this comprehensive beginner’s guide, we will guide you through the fundamental steps and concepts necessary to initiate your futures trading endeavors.
LBank Futures is a cryptocurrency derivatives trading platform that offers a variety of futures products, including perpetual contracts. If you are new to LBank Futures, making your first trade on the platform can be daunting. As such, here are some key concepts to understand:
In futures trading, you have the option to go long or short on a futures contract.
- Long Position: A long position signifies a trader’s intent to purchase an asset with the expectation of its price appreciating. If the price ascends in line with the trader’s speculation, they can subsequently exit the position, thereby realizing a profit.
- Short Position: Conversely, a short position involves a trader speculating on an impending decline in the price of an asset. In this scenario, the trader capitalizes on this downward movement. Should the asset’s price indeed decrease as anticipated, the trader can repurchase the contract at a lower price, thereby securing a profit from the disparity.
Leverage is a major concept in futures trading allowing you to open larger position sizes with a smaller amount of capital. For instance, with leverage, you can open a position worth 10 times your initial investment. However, keep in mind that while leverage can amplify profits, it also increases the potential for losses.
LBank allows you to adjust your leverage according to your risk tolerance. Make sure to choose the appropriate leverage level for each trade, as it affects your position size and margin requirements.
Selecting the appropriate level of leverage is crucial. LBank’s leverage option allows you to set your leverage from 1x to 125x. However, as stated earlier, the higher the leverage, the greater the risk.
LBank offers a range of trading pairs for futures contracts. These pairs represent the assets you can trade, such as cryptocurrencies. Choosing the right trading pair is essential for your trading strategy.
LBank provides two margin modes: Cross Margin and Isolated Margin. The Cross Margin uses all available funds in your account to support your open positions, while the Isolated Margin keeps each position separate. You can switch between these modes based on your risk preference.
Managing risk is vital in futures trading. Setting stop-loss and take-profit orders helps you limit potential losses and lock in profits automatically when your predefined price levels are reached.
Before you can start trading futures on LBank Web, you’ll need to open a futures account. Here’s how to do it:
- Register: If this is your first time using LBank, you’ll need to click the Register option and get started. If you’re an existing user, click Log in and proceed to the following steps.
2. Derivatives Section: On the top of the LBank Web page, you’ll find the “Derivatives” option. By default it takes you to the “Futures Page” the other option is an ETF page. Select the option to access the futures trading screen.
3. Open Your Futures Account: In the bottom right corner, click on “Open Now.” You’ll also need to tick the box that says, “I have read and agree to the Risk and Disclaimer.” This step is crucial as it acknowledges your understanding of the risks involved in futures trading.
4. Start Trading: Once you’ve completed these steps, your futures account is enabled, and you can start trading.
Now that you have a futures account, it’s time to start trading. Here’s a step-by-step guide on how to do it:
- Deposit Margin: Before you can enter into any futures contracts, you’ll need to deposit funds into your futures account as margin. You can deposit USDT or other supported cryptocurrencies.
- Choose Leverage: Select the level of leverage you prefer. Leverage allows you to control a larger position size with a smaller amount of capital, but it also increases your potential gains and losses.
- Select Trading Pairs: Choose the trading pairs you want to trade. LBank offers a variety of trading pairs, including cryptocurrency futures contracts.
- Place an Order: Decide whether you want to buy (long) or sell (short) a futures contract. Indicate the number of contracts you wish to own.
- Set Stop-Loss and Take-Profit: To manage your risk, set stop-loss and take-profit levels for your trades. These levels determine at which point your position will be automatically closed to limit losses or secure profits.
- Order Confirmation: Confirm your order, and it will be executed based on the market conditions.
Starting futures trading on the LBank App is a straightforward process, provided you follow the necessary steps for account setup, fund deposits, and trading in futures markets. Remember to exercise caution, especially when using leverage in futures trading, and conduct thorough research before making any trading decisions. With the right knowledge and strategy, you can harness the potential of cryptocurrency trading on the LBank Web. Happy trading.
Disclaimer: Derivatives are often volatile, and this can be a risky investment. The information provided in this article is solely for educational purposes and shouldn’t be regarded as financial advice.
This article came directly from the LBank blog, found on https://lbank-exchange.medium.com/getting-started-with-futures-trading-on-the-lbank-web-a-beginners-guide-3533b2789541?source=rss-87c24ae35186——2