Is it profitable to trade crypto futures in 2022?

With the advent of new players entering the crypto space, cryptocurrency futures trading is getting more and more attention. Firstly, it can be used as an additional tool that can help you hedge your portfolio, while you continue to execute your regular trading strategies. Furthermore, you can take advantage of any market state in the crypto space with futures trading in crypto space. 

In the same way as spot trading, bitcoin futures are all about predicting the coin’s price. However, you do not own the asset or deal with storing or selling your digital assets. The fact is that you can open short positions for assets you do not actually own. Although futures trading often appears complex, it is in reality similar to spot trading in many ways. 

Trading Crypto Futures: The Basics

The mechanics of futures contracts is quite straightforward. Suppose that there are two traders, one of whom wants to sell a coin at a certain price in the near future, while the other agrees to buy it at a certain time in the future. They enter into an agreement hoping to profit from the changes in asset prices. 

Further, futures trading allows for the possibility of limiting negative price trends. In other words, let’s say you expect the price of an asset that you hold to dramatically decrease in the next couple of months. In this case, you can create a futures contract to sell at a current price regardless of whether the price changes later on. 

So how does one actually starts trading futures? 

As a first step, you should look for an exchange that supports futures trading; note that they are usually available in both Bitcoin and Ethereum. In choosing the right platform, it is important to make sure it is secure, well-established, and easy to use. As an example, HitBTC has a crypto futures trading tool available for both the web and the HitBTC Android app. Also available is a platform for trading crypto futures. 

The next thing you need to do once you have chosen your investment and made a deposit is to come up with a trading strategy and decide whether to trade long or short. If you look at the market trends, you can get an idea of the direction the asset will go. You will go long if you forecast an increase in price, and you will go short if you forecast a decrease in price. 

The most important thing to remember when planning your trades is to figure out the level of risk you are willing to take with each trade and stick to it. If you do not feel comfortable with this, it would be a good idea to start with a demo account and practice before going all in. 

Final Thoughts

In the same way as any other type of trading, futures contracts are also associated with certain risks. It is important to do your research on the market, use additional tools such as indicators and technical analysis, and establish goals and risks for every trade to minimize the risks. Furthermore, a good broker is essential. With the availability of virtual accounts and reasonable fees, a reputable exchange can simplify and secure the entire process of trading for its users.

BTCC

The BTCC Cryptocurrency Trading Platform was founded in June 2011 with the goal of providing users with a reliable trading platform for cryptocurrencies.

The exchange is registered in the UK and holds cryptocurrency financial licenses in the United States, Canada, and Europe. For the past 11 years, it has passed hundreds of thousands of major market tests with its top-notch technology. Since BTCC was founded in 1985, it has been focusing on facilitating transactions, growing with the industry, and always leading a fair and simple transaction environment.