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How Binance Futures trading work and what are the benefits of futures trading on Binance?
Binance Futures is one of the leading futures crypto trading platforms with 20x leverage (previously it was 100x). Trading is an art, and every crypto trader starts their crypto trading journey with spot trading. However, when they grow their skills as a trader, they can maximize gains and minimize risks using some innovative strategies. Although for long-term trading, spot market is good, but you can go with futures trading when you want to short sell an asset or use increased leverage in a trade.
Futures are the type of derivative trading and these are the regulated trading contracts between two parties involving an agreement to buy or sell any underlying asset. Futures Trading allows traders to hedge against volatile markets and make sure that they buy or sell an asset at a set price in the future. And, if the price moves in the opposite direction, they may end up paying more than the market price or selling it at a loss.
In some cases, instead of actually buying or selling, future contracts allow traders to gain exposure indirectly to any cryptocurrency and potentially profit from the price movements.
Why should one consider Binance futures?
The spot market allows traders to buy or sell the crypto trading assets at anytime, but with certain defined limitations. And in this kind of trading, the traders have to even hold the assets for a while before taking out profits.
But when we talk about futures trading, this kind of trading allows traders to diversify their portfolios and increase their exposure to a variety of cryptocurrencies without even having to hold the underlying asset. Making use of leverage on the crypto derivative trading allows them for better capital efficiency. Moreover, short-selling gives them a better chance to earn profits even if the price of an asset drops.
Binance Futures is the most liquid derivates exchange in the crypto trading market that provides the user with the best offers to help them avoid unnecessary risks.
Leverage trading at Binance Futures platform allows the traders to open positions which are bigger than their crypto assets capital. If you can open a position which is 50 times bigger than their capital, then you have 50x available for you to make trades.
Gain access to a wide range of features
Binance Futures trading allows its traders to access a wide range of features including advanced order types, Binance trading bots, grid trading, etc. that further ensure a seamless trading experience. When we talk about advanced orders, it’s quite beneficial. Like, if a trader places a limit order, then take profit and stop-loss can be placed simultaneously. This enables traders to set a primary order and secondary order at the same time, with the former being a limit order and the latter being a stop loss and take profit order.
This amazing technology and features allow traders to plan their strategies accordingly ahead of time. This improves trading consistency and also manages the risks properly at the same time.
Before trading futures, you are required to open a Binance Futures account while making use of the Binance app or through the Binance website. Here you can register by entering email ID, accepting the terms and conditions of use, and following the instructions given. After registering, you are eligible for margin trading or leveraged trading on Binance Futures.
Grid trading and Binance trading bots
Grid trading is a useful feature of Binance that can help traders to automate the crypto trading process of trading futures contracts. With this, you can place as many buy or sell orders as you want and realize the profits within the predefined price range. Grid trading is when the orders are placed above and below the set price, creating a grid of orders at decreasing and increasing prices.
For Binance Futures contracts, grid trading bot automates the buying and selling process. This feature is designed to place orders in the market at preset time intervals within a configured price range. Users can customize and set certain grid parameters, to determine the upper and lower limits along with the number of grids. Once the crypto trading bot Binance or the grid trading bot is created, the system will automatically start buying and selling of the orders.
If you are a novice trader and don’t know much about grid trading and how to set a grid trading bot for Binance, you may consider a third-party crypto trading platform like CryptoHopper or Growlonix. These platforms can make the trading process easier. The grid trading bot on the Futures market is more suitable for those who prefer perpetual futures trading.
If you choose a third-party platform, you can automate your trading process by making use of Binance trading bots. The futures trading with trading bots on Binance lets traders divide their funds into smaller parts/grids, and buy the asset at fixed intervals. Apart from this, you can also make a personalized strategy by connecting your account on third-party terminal to the Binance Futures platform.