Binance Futures – The leader in futures contracts!
By Crypto Nation – 10 July 2020
Binance Futures is the ultimate futures trading platform. Launched in 2019, it allows traders to use leverage up to x125! It is possible to open Long or Shorts orders on hundreds of crypto currencies.
This guide is aimed at users that have a bit of experience in crypto. The fluctuations of the crypto markets are known to be quite big, so imagine their proportions when associated with a x125 leverage ! Sure, you can get rich, but you can also lose everything in 5 minutes.
First, check out our guide to the Binance platform. And for those who want more details on leveraged trading, check out this article.
Binance Futures: The place to grow your profits!
Introduction to Binance Futures
After becoming the leader platform in crypto-currency trading, Binance launched its futures trading space, Binance Futures, which also immediately became a reference in the field. Fluid and relatively intuitive, the interface is simple. Beginners can risk losing everything. A certain knowledge of the market and good risk management are required! We remind you to read this article if you are not familiar with leverage and the liquidations that can occur.
Firstly, there are two distinct areas in Binance Futures:
- USDT Futures
- COIN Futures
We will only discuss USDT Futures here.
Registering with Binance Futures
To open an account with Binance Futures, you must first have a basic Binance account. Visit our dedicated page to create one.
Once you have your Binance account, click on the following button to open your Binance Futures space:
Note that by registering on our site, you will receive a 10% discount on your futures trading fees thanks to the cryptonation code.
Transferring Funds to Binance Futures
To use Binance Futures, you must first have funds deposited in the account. These funds come from your Binance portfolio. Transferring funds from Binance-to-Binance Futures is simple, instantaneous, and free of charge.
It is possible to transfer Tether (USDT) and Binance Coin (BNB).
In order to transfer these funds, go to your Binance Futures portfolio and click on the Transfer button. Define the cryptocurrency and the amount you want to transfer, then click on the confirmation button.
The Binance Futures Interface
The interface is obviously very similar to the Binance interface. We’ll take a look at it below:
As specified in the top left corner, we are looking at the BTC/USDT cryptocurrency pair.
- The first block is the cryptocurrency’s chart, in this case Bitcoin. First, we advise you to use the Trading View, which can be selected at the top right of the chart. We can see on the upper left corner that the time scale selected is 4 hours. Each candle on the chart represents 4 hours. A green candle indicates that there was more buying during this period. In contraty, a red candle indicates more selling. Below the chart, we find the volume traded.
- The second box represents the depth of the market. If there are more sell orders on the market, the graph will show more red than green. More buy orders will show more green than red on the graph.
- On the right side of it, we can observe the order book, showing us the orders that are positioned on this pair of crypto currencies. In red the sell orders and in green the buy orders. We can see the price, and the quantity to sell/buy.
- On the right-hand side is the area where you can place your orders. To trade, in this case Bitcoin, enter your price, and the size (quantity) you want to trade for the price indicated. You can see two different types of orders:
- Buy/Long: which allows you to bet on the rise of the market.
- Sell/Short: which on the other hand, allows you to bet on the market going down. You can therefore make profits even on a falling market.
- Whatever the type of order, it will be linked to the leverage that you will indicate, this point is treated below.
- Under this box will be indicated your margin ratio. The lower it is, the better. If it reaches 100%, your entire futures portfolio will be liquidated. You will want to make sure that you stay above the maintenance margin, to avoid automatic closing of your orders.
- At the bottom you will see your open positions with the current PnL (profit and loss). Your open orders, as well as the different histories.
Adjusting your leverage
Binance Futures allows you to manually adjust the leverage for each of the available cryptocurrency pairs.
You can adjust the leverage by clicking on the indicator as shown in the following images.
Be extremely careful when using leverage! When it is higher than x3 it can already be considered as risky. When you have mastered your analysis, x10 can be used, but you will need a significant collateral to avoid potential liquidations. We do not recommend using more than x10 unless you are sure of your analysis and fully aware of the risks.
To learn more about leverage trading, check our article about the topic.
The types of orders available
Let’s look at the four types of orders available at Binance Futures.
The Limit Order
With a Limit order, you will specify the price at which you want to enter/exit your position. The trade will only be executed when the desired price is reached. This allows you to place orders in advance if you want to buy at a specific price.
In our example, we want to buy 1 Bitcoin (BTC), with a leverage of x10, at a price of $10,000.
This would cost us 894.54 USDT for a Long, and 2,609.23 USDT for a Short.
The Market Order
The Market order is executed immediately, at the best available price in the order book. This type of order is however subject to taker fees, which are higher than maker fees, as with a Limit order.
To place a Market order, all you must do is specify the quantity and validate.
The Stop-Limit order
This order is also there to be placed in advance. For example, if I indicate in the Stop field a value of 10,500 USDT, then the order will be triggered if the price reaches this value, and an order will be placed in the order book on the value indicated in the Price field. Amount indicates the quantity.
The Stop-Market order
Same principle as for the Stop-Limit, it is the Stop field that will trigger this order. The only difference is that the order will be of the Market type, and not Limit.
Take Profit and Stop Loss
In margin trading, it’s very important to define when to exit a position.
This is what you will indicate in the Take Profit and Stop Loss fields once your position is present in your list.
In our example we have an open position on DASH. We will indicate to exit automatically if the price of DASH reaches 73.30 USDT. Binance tells us that we will have 551.60 USDT in profits.
We also specify that we prefer to exit if the price reaches 64.70 USDT, to avoid further losses. We will thus be at 308.40 USDT of losses.
The Binance Futures Calculator
To help you with all the calculations that you’ll have to do, Binance Futures has a tool that’s directly available to you.
Click on the calculator button to open this tool.
Several calculations can be performed via this tool to help you with your trades. Refer directly to the tool where everything is explained.
Our conclusion on Binance Futures
Once again, Binance is the leader with its new platform, this time for margin trading. Low fees, a simple and complete interface, everything you need to trade in the best conditions!
Binance Futures also has a substantial insurance fund, which will reassure traders in all circumstances.