FUTURES TRADING MEANING CRYPTOSeptember 17, 2022 / by Marco / Categories : Cryptocurrency
Futures trading is a financial instrument which is close to speculation. The essence is that two parties bet on the future value of a commodity. It may be gold or grains, or assets. The parties make a contract indicating the end date when they have to fulfill their obligations and the price. The party that makes the correct prediction for the asset’s price receives rewards or income. That is how futures work in simple terms.
Futures Crypto Meaning
Futures trading is a popular financial tool for the crypto market. Due to the high volatility of digital assets, parties have many chances to receive profit. However, successful crypto futures trading requires sufficient knowledge of the crypto industry and experience. Otherwise, it is just betting and guessing, which cannot bring fruit.
Crypto futures meaning includes some key things a trader should be aware of:
- Basic knowledge of the market. A user must have an in-depth understanding of how the market works and know how specific coins behave. Unlike traditional commodities, crypto assets have lower capitalization, meaning they are risky while at the same time having a higher potential for growth.
- Understanding key concepts of market capitalization and trade volume, ability to read crypto charts, identify candlesticks and patterns, and, more importantly, use that knowledge skillfully.
- Understanding the fundamentals of a project. Before investing in crypto, it is necessary to investigate the project’s key indicators and learn how the asset behaves during different market trends. Also, it is essential to know the technology underlying the project and evaluate the development team and founders.
- Join the project’s community to keep track of their updates and news. Big plans for new cooperations, partnerships, and updates can cause an increase in the asset’s price. It helps to predict the asset’s rate in crypto futures trading.
- Monitor the news background and track what is happening in the market and the global economy.
Futures meaning crypto is a much riskier trading option because sometimes it is just impossible to predict the future price of an asset. However, to begin with, you should start with small amounts and have a lot of practice. If you register on the WhiteBIT crypto exchange, you will have the opportunity to try yourself in this complex type of trading using a demo account.
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