Binance Futures is a platform that allows users to trade based on the future prices of cryptocurrencies.

Binance Futures has 3 different names:

Binance Futures

Binance Derivatives

Binance Leveraged Trading

“What are the advantages?”

High Leverage

It allows you to earn more with less capital. You can trade with leverage up to 125x.

For example:

I have $100. If I buy a coin on the spot market and it increases by 10%, my balance becomes $110. But if I had done this trade with 10x leverage, the 10 would be multiplied by 10, and I would have earned $100.

Or if it increased by 5%, $100 would become $150.

Or I have $100. I entered a long position with 20x leverage, meaning I expect the coin to rise. If it increases by 3%, the 3% is multiplied by 20, and I make a 60% profit. My total balance becomes $160.

If the coin price goes up, you profit; if it goes down, you lose.

If the price goes up (long) or down (short), you can make a profit. If you think it will rise, you can go long; if you think it will fall, you can go short.

For example, you think Bitcoin will fall. You have $200, so you entered a short position with 5x leverage. Short means you expect the price to go down. If Bitcoin drops by 10%, then 5 x 10 = 50% profit, which equals $100. Your total balance becomes $300.

What are the risks?

High Leverage Risk

High leverage is very dangerous. For example, if you open a 10x leverage long position, meaning you expect the price to rise, but it drops by 10%, then 10 x 10 = 100%, causing you to lose your entire capital.

Or;

Or if you think a cryptocurrency will fall and you have $1,000, you enter a short position with 5x leverage. If that coin increases by 20%, you will lose your entire capital.

Of course, there are many ways to reduce risks. I will explain each of them in other posts one by one. When you finish reading this series completely, you will have a very good understanding of everything related to futures trading.

Market Volatility

Cryptocurrency markets are very volatile; sudden price changes can cause unexpected losses.

For Example:

You have $100.

You think the XRP coin will rise.

You entered a 50x leverage long position.

Let’s say XRP increased by 2%.

But after you closed the position, it returned to your entry point and then dropped 2% more from that level.

Then 50x 2% equals 100%, and you lose your entire capital.

Stress

Leverage trading can create high stress, especially when you use high leverage.

So, in conclusion, it involves both high risk and high reward. You can earn a lot of money even with a small amount of capital.

I will share all the information with you step by step in a regular manner. When you have read all the texts, you will know everything about futures trading.

If you want to start trading futures, you need to have a Binance account.

To sign up for the Binance exchange, you can register using this link.

The advantage is that it provides a 20% commission discount on trades.