Cryptocurrency futures trading offers high returns and addresses your risk diversification needs. As you can participate in upside or downside market movements irrespective of the market situation, it works as a great hedge even during market downturns and can multiply your earnings in a bear market. Futures are margined, i.e. you need to invest a fraction of the value of the contract to open a position. All crypto futures exchanges offer high leverage, so you can open and maintain a very high-value position with a small margin amount. But price volatility is a feature of cryptocurrency, and your gain or loss can both magnify in futures trading.

There are a lot of reasons to do crypto futures trading. You can bet on Bitcoin, Ethereum or any other cryptocurrency’s price movement without owning the asset class. If you obtain extremely high leverage, slight price movement can bring in high profits, but the flipside is huge! This market is unregulated, and external factors impact price movement tremendously. If the market turns against your obtained position, you can book a huge loss. Unlike spot trading, you cannot hold positions for the long term, and there is a chance of liquidation. Crypto futures trading is a high-risk game, and it is not for novice traders. But how will you try it and learn the skills needed? Theories do not always help in trading. You need to experience it.

Bitget, one of the world's leading cryptocurrency exchanges, offers futures demo trading, and here you can hone your futures trading skills with imaginary money. Take leverage up to 125x and keep on having long and short positions. Get liquidated as many times as you want. Test different strategies and see what works in this market. Try whether different types of signals are valid or not to make trade decisions. While doing this activity, you keep on learning irrespective of the trade outcome. There are no real financial consequences.

To start futures demo trading on Bitget:

• Register on Bitget. Head to the Bitget Demo trading page.

• Demo assets will be there already in your account. You can now explore the trading pairs on the demo.

  1. USDT-M Futures demo trading pairs: You get a demo asset SUSDT to trade here. The trading pairs are:  SBTCSUSDT/SETHSUSDT/SEOSSUSDT/SXRPSUSDT

  2. Coin-M Futures demo trading pairs: You use different demo assets to trade here. The trading pairs are:  SBTCSUSD/SETHSUSD/SEOSSUSD/SBTCSUSD

  3. USDC-M Futures demo trading pairs: You get a demo asset SUSDC to trade here. The trading pairs are: SBTCSPERP/SETHSPERP

Let us explore USDT-M Futures demo trading and explain every bit of it for newbies. For example, you want to trade SBTCSUSDT. You can see the TradingView Chart. If you have traded on the spot market, you should be familiar with this. Here you can bet whether the price of SBTC (a demo asset tracking the price of Bitcoin) will go up or down, without actually buying the asset. This is a perpetual pair, so the contract never expires.

• Decide your Margin:  This is the upfront amount you need to put down to open a position. The screen shows that I’ve 3000 SUSDT. I want to use 25% of that i.e. 750 SUSDT. This is my collateral amount.

• Long or Short: Now, I can go either long or short. Suppose, I think SBTC will go up within 24 hrs. I will go for a long position. It is important to take note of the “Funding Rate.” Long and short position holders will incur funding fees every 8 hours. A positive funding rate means the longs are paying the shorts (more long positions than short). A negative funding rate means the shorts are paying the longs (more short positions than long).

• Decide Leverage: Leverage is a key feature of futures trading. Through this, I can obtain a big position by using a small amount of money. High leverage is very risky, and leverage selection should be done as per your risk appetite. I am selecting 10x leverage in this trade. 10x leverage means I can open a $75,000 trade with just $750 of my funds. 

• Decide Margin Mode: There are two types of margin modes available:

  1. Cross Margin Mode: Here, all your positions share the joint margin pool. This is a more capital-efficient approach, but if liquidation happens, you lose the full margin balance.

  2. Isolated Margin Mode: Here, the risk of long positions and short positions is calculated separately. If you want to open multiple positions and proactively manage each one, go for isolated margin mode. If one of your position's margins falls below the maintenance margin level, only that position will be liquidated. You can add or reduce the margin for a position in isolated margin mode.

• Make the Trade: For this trade purpose, I am going for an isolated margin market order. I am opening a long position after selecting the TP/SL (Take Profit/Stop Loss) portion. Selecting TP/SL is not mandatory.  TP/SL will send an automated instruction to exit my position when the price hits the selected level. It will help me to minimise loss or book profit at the desired range.  When my trade order is successfully submitted, it shows under “Positions".

• Manage your Trade: After opening a position, I can see the liquidation price and need to manage my position. I have already selected TP/SL but that can be adjusted again. It is important to note the MMR (Maintenance Margin Rate). Maintenance Margin is the minimum balance required to keep my position open. If MMR is equal to 100%, my position will get liquidated. If it approaches near 100%, I need to add more funds or I can lose my position.

• Closing the Trade: If my position reaches the TP/SL level, it gets closed automatically. If I have gained good profit or am unhappy with sudden market fluctuations, I can also manually close the trade. I can close the complete position or a portion of the open position. Closing order is irrevocable.

This is demo trading only, but it can help you to experiment. You can continue to top up your account with imaginary money at any time to make numerous trades. Avoid high leverage as it does not help. Stay updated with market trends, technical analysis, and make trades regularly to observe the performance of your trades. Even if you make a good profit in a few trades, do not be jubilant and develop your “Learning Curve”. The profits and losses are settled on a real-time basis on Bitget. So, you become accustomed to a sophisticated, accurate data system. The user-friendly interface and trading experience on Bitget are always lovable.

Once you gain enough confidence from demo trading, jump into real futures trading. Create a trading plan and only trade with money you can afford to lose.

If you are not a user of Bitget, register on Bitget. Invite your friends to try the demo trading together. There are Rebate Perks for the inviters. If you are a Solana builder, join Bitget at the Solana Startup Village- Toronto from May 1st to 16th. 

This article was simultaneously published here also.

Follow Me

👉 Twitter @paragism_