How to trade Bitcoin Futures?
To answer this question, we need to address some of the more basic questions like bitcoin and future contracts?
Bitcoin:
The cryptocurrency is the first-ever cryptocurrency to hit the market. There are instances where people traded a couple of bitcoins for a pizza, and those bitcoins now are worth millions of dollars.
Bitcoin was created by an anonymous user Satoshi Nakamoto back in 2009. The whole idea was to eliminate the presence of third-party banks who were involved in transactions between two parties,
The way bitcoin works was astonishing at that time, but as of now, Blockchain Tech has taken the world by storm. Almost all the cryptocurrencies that the world now sees are made up of blockchain technology only. The programmers have gone one step ahead with it by using the tech to create whole worlds around it. For example, Etherium is using blockchain to create integrated environments around the tech.
Coming back to bitcoin, it was the first cryptocurrency and was launched back in 2009. Fast forward to the fall of 2020, and Bitcoin saw one of its greatest bull runs ever. There were people who were being called crypto billionaires just because they bought some bitcoins when they had the chance. As of now, Bitcoin trades at around $51K per coin.
Now let us understand what futures contracts are:
Futures:
To put it into layman terms, a futures contract is a legal agreement between a buyer and seller who decide to buy or sell a financial instrument on a predefined date in the future at an agreed-upon price. The good thing about futures contracts is that the trader doesn’t need to own the underlying asset. This is something that gives the futures traders an upper hand over the traditional traders.
What are the risks involved with Futures?
Not many risks are there with CFDs or futures; however, every broker with an online presence makes sure to declare that CFDs are a risky trading instrument with futures. The truth is that the traders who trade on CFDs and futures don’t know how to speculate properly. There can be chances that they enter the market and then learn how to survive there.
This can be a bad approach because the risks are all live once you have entered the market. The things that you probably have read about ( we pray so) are now very real. Tackling them is a hard task now since real money is on the loose.
With futures or any derivative instrument, the game is all about speculations. You speculate right, and the money is made, and if you are wrong, bad consequences await you. The risk is all about what will happen and honestly. No one knows that.
Traders look at technical aspects of a stock(Bitcoin, in this case) and make their assumptions. The only risk that persists is that the prediction might go wrong.
What are cryptocurrency futures?
Crypto futures are futures contracts that expose the traders to the world of cryptocurrency trading without holding the asset at all. Bitcoin futures are an example of crypto futures. The cryptocurrency futures.
The major constituent of Crypto futures is leverage and margin.
The world of cryptos is volatile. And since that is the case, there are a lot of margin requirements for the traders to fulfil. The bigger the trade, the larger are the margin requirements. Apart from that, leverage also plays an important role here.
So before you enter the arena of crypto future trading, learn how leverage and margin works.
Where can I trade bitcoin futures?
The traders can trade bitcoin futures via the popular online broker HFTrading. The broker has been in the market for a long time and is regulated; HFTrading is a trading partner for CTRL investments Pvt. Ltd. and is regulated by the Cyprus securities and exchange commission (CySEC). The traders can trade over more than 200 CFD tradable assets via three different trading accounts.
What is the perfect platform for Trading bitcoin futures?
The best platform to trade BTC futures is MT4. HFTrading readily provides the platform. MT4 was originally designed for trading in currency pairs, but since the market has evolved into something larger, the platform offers a better approach to trade in the world of futures trading.
Bottom LIne:
Bitcoin and futures both are risky trading instruments. Bitcoin is volatile, and Futures are hard to predict.Ensure you know what you are doing before you get into the market and ensure that the risks are calculated enough. Keep the facts like limited use of leverage and margin in the head before you trade on anything that is even close to a futures contract or a CFD.
