By trading cryptocurrencies, savvy investors can make huge sums of money in a short time. This is because governments have no control over crypto assets, and their prices can rise and fall independently of government decisions and central banks’ regulations. Thus, the high volatility of digital currencies is driving the development of trading. It has fostered the emergence of numerous trading platforms that make it possible to make money with sophisticated trading instruments.
However, trading has always been associated with risks. Therefore, if you want to be part of this industry, this article will mention some important things you should know about trading. Let’s answer the question, “What are futures in crypto?”.
How Does Crypto Futures Work?
Сrypto futures are a type of trading that allows investors to profit from both falling and rising markets. When trading futures, two parties enter into a contract to buy or sell a crypto asset at a pre-agreed price at a precise date in the future. Each participant chooses between a “long” and a “short” position. Long means that the user expects the price to go up, while short means the price will go down. Therefore, futures trading allows users to profit even if the value of the asset falls.
Some tips for beginners:
- Before getting into difficult types of trading such as cryptocurrencies, you need to understand the most important things about the market: how it works, how to trade, what is trading volume, leverage and liquidity. You should also be able to read cryptocurrency charts and do your own market research.
- Choose established assets for futures trading (ETH, BTC, SOL), as they have the potential for moderate growth in the future. Be cautious of new assets emerging in the market.
- Follow the news. The news background often influences the cryptocurrency market, so keep up with the latest developments in this industry.
For more information on cryptocurrency trading, visit the WhiteBIT Blog, and to practice crypto futures, use the WhiteBIT demo account.