Trading Bitcoin Futures on Gate.io | Gate.io Futures

This is where futures come into play. Cryptocurrency futures allows you to buy or sell bitcoin at a future date. When you first buy a future, you will be buying a legal contract for the bitcoin instead of the bitcoin itself. Trading bitcoin futures can be quite confusing, especially if you are not familiar with the trading of normal. In this article, we’ll tell you everything you need to know about crypto futures.

We’ll also see how you can trade bitcoin futures on gate.io.

Crypto Futures

As you know, the crypto market is known for its price fluctuations. From bitcoin to most major alts, almost every crypto coin experienced a major price fluctuation at least once. Crypto futures protect investors from major price fluctuations. Usually, in a three-month period, it isn’t uncommon to see a bear market.

During bear markets, you don’t really gain much from your crypto holdings. However, with futures, you can avoid too many losses. You can either go long if you believe the price will increase in the long term or go short if you want to bet against the coin.

The advantage of crypto futures is that it allows people without too much crypto knowledge to get in on the action as well. So you don’t have to miss out just because the market is too volatile as you can decide in which period you want to place your option.

Another major advantage of bitcoin futures is that there is always someone willing to take the other side for better odds or better profits. In addition, bitcoin futures is one of the most liquid markets in the entire crypto space. As a result of these, the risk is considerably less compared to investing in the coin itself and will also incur less trade slippage.

Crypto futures also helps build a diverse portfolio in the crypto space. You can choose from a lot of trading strategies such as short selling, arbitrage, etc. Many platforms also provide the feature of margin trading with futures. Margin trading can bring you great profits or incur heavy losses. You have to determine the risk of your investment and ensure you’re comfortable with it before using margin trading.

Margin trading allows you to take advantage of relatively small price movements and make huge profits from them. However, this also works in the other direction. If the price movements are negative, you may lose a significant amount of assets too.

Futures trading helps you make some profits from the crypto space without being involved too much. There are many types of crypto futures like bitcoin futures, ether futures, USDM futures, etc. Now, let us see how to trade bitcoin futures on gate.io quickly and easily.

Investing in bitcoin futures

Investing in bitcoin futures can be very profitable if you’re familiar with the market. Usually, spot traders use the futures options to hedge against their positions in the market. Let’s say if a spot trader is planning on holding bitcoin for a long time, they may short bitcoin futures to minimize any losses they may face if there is a bear run.

Moreover, miners are also known to use futures to ensure a return on mining investments. Along with the regular traders, we also have speculation traders. Speculation traders mostly use future trades to gain short and long-term profits without any risk-minimizing strategy that spot traders or miners employ.

Investing in bitcoin futures is also quite safe for beginners. Since you won’t hold a bitcoin, you don’t need to create a wallet to trade futures. There won’t be a physical exchange of a bitcoin in the transaction and hence it reduces the overall investment maintenance costs for the end-user.

Types of BTC Futures

There are usually two types of bitcoin futures: fixed maturity and perpetual trading. Fixed maturity futures are valid for a fixed period of time. Popular exchanges offer quarterly or bi-quarterly bitcoin futures. You need to pay a fee when you open the position for a fixed time.

Perpetual contracts operate a bit on the wild side of the equation. There is no fixed time or price for your options. Instead, the fee keeps varying every four hours or eight times a day. The fees depend on your position and the market movements in general, along with several other factors.

Bitcoin Futures Investment Methods

Speculation Trading

Speculation trading is a beginner-friendly trading method that many future investors use at one or the other point. To succeed in the future with speculation trading, you need to brush up on your observation skills. You have to understand the market movement, changes to the spot price, and many other factors like major events in the crypt space.

An excellent way to start your speculation trading journey is to observe the market momentum. Usually, in most of the crypto market moves, bitcoin is moving. If you see red candles in the bitcoin market and green candles everywhere else, it may be an indication that bitcoin may rise soon.

Speculation trading comes with a lot of risks. Even when observing market momentum as a whole, sometimes, things just don’t work out. We saw bitcoin stomping all the alts in its bull run to hit 60k earlier this year. In this case, even though bitcoin was in a bull run, the alts like ETH, DOT, took a major hit.

Educated Trading

In educated trading, you need to make an informed guess on where the price will be in the future. It is critical to have multiple exit strategies when using this trading method. For starters, you need at least two exit strategies, one covering the profits scenario and the other, the loss.

Knowing when to stop is a critical aspect of educated trading. Price volatility is still a major issue to be concerned with. So knowing when to cut losses or when to call it a victory dictates the success of educated trading.

Bitcoin Futures Trading Strategies

Cash-and-carry Futures Arbitrage

The main principle behind cash-and-carry futures arbitrage trading is taking advantage of pricing inequalities. This strategy has a market-neutral approach. The market-neutral approach minimizes the loss in a bear market and maximizes profits in a bull one.

Usually in this strategy, investors open two trading positions at the same time: One a long position and another a short. The investor would purchase the bitcoin directly instead of going long in the bitcoin futures. Then, the investor would open a short position for the same amount to minimize the losses.

Even though the cash-and-carry arbitrage trading strategy is well-tested and minimizes risk, it is not foolproof. For starters, you need to carefully determine the short position you want to take in the bitcoin futures to reduce the risk. Other costs such as fees, margin costs, and other such small expenses can slowly chip your profit away.

Inter-Exchange Premium Arbitrage

In this strategy, the investor seeks to make a profit from the price difference in the future options between various platforms. For instance, if the price is low on one platform, you can buy there and sell it on a platform where the price is relatively high.

Sounds simple enough, right? Well, it is. Even though there are numerous factors you need to consider, like the trading fees, you can make a decent profit by observing different platforms instead of the bitcoin market movement itself.

The advantage of this trading strategy is that there are a number of crypto trading bots on the internet prepared for tasks like this one. You can leverage these trading bots to increase profits and minimize the loss.

One of the major disadvantages of this trading strategy is the time involved. The crypto space is a very volatile one. Your profits depend on how quickly you can transfer funds between exchanges. If the timing is a little off, or if the assets take too long to transfer, you may actually lose money because of the trading costs and price movements.

When you first start futures trading, understanding these strategies can be a difficult task. However, you can naturally pick them up when trading with some experience. None of the trading strategies are completely risk-free. And as we know, the crypto space is as volatile as it comes.

It can be confusing to trade futures on just any platform. Gate.io is a great place for both beginners and experts alike when it comes to futures trading. Now that we’ve gone over the basics of crypto futures and bitcoin futures, let us see how we can trade bitcoin futures on gate.io.

Trading bitcoin futures on Gate.io

Trading bitcoin futures on gate.io is pretty simple. First, you need to create an account on the platform to start trading futures. Follow the below steps to do that.

1. On the signup page of gate.io, enter all the relevant details.

2. After entering the details, you need to select a second password called the fund password. This password can’t be the same as the account password for advanced protection.

3. Once you complete the anti-bot challenge, you will have to click on the link you receive in your mail to activate your gate.io account.

4. Gate.io also sets up two-factor authentication. You need both the password and the code you receive in your mail to log in to your account.

5. You can then click on ‘Deposit’ and deposit some crypto into your account.

6. You can also directly buy crypto coin using Gate.io and do normal spot trading as you would on any other exchange.

Then, you can head on to the futures section and start trading your way to profits. Follow the below steps to start futures trading on gate.io.

1. After opening an account and depositing the money, hover your mouse over the ‘Trade‘ option in the navbar.

2. You should see the perpetual option in the options box.

3. Click on the ‘perpetual’ block and you will be taken to a new page.

4. On this page, you can choose whether you want to trade USDT marginalized perpetual or BTC marginalized perpetual.

5. Click on ‘BTC marginalized perpetuals’ and select the trading pair you want to invest in.

6. You can then select the price you want to place your option at, the amount, and then either go long or short.

7. There! You just successfully placed your first options on the gate.io platform now.

Here are some things you need to know about trading perpetual futures on gate.io.

Perpetual Contract Bonus

Gate.io has a special feature called Perpetual contract bonus. You can use this bonus to pay for margin and deduct losses, fees, etc. You can use the perpetual contract bonus to experience the function of contract bonuses all the while eliminating the risk of contract trading.

It is pretty easy to obtain perpetual contract bonuses on the gate.io platform. You can get the perpetual contract bonuses on gate.io through giveaways. If you received any perpetual contract bonuses on gate.io, you could collect them on the trading page. You can use this bonus directly as a trading principal, trading fees, funding fees, etc.

You can do a lot of things with perpetual bonuses. However, they do have some limitations. You cannot transfer or withdraw your perpetual bonus. Moreover, perpetual contract bonuses are only valid for 30 days from the day you obtained them, so be sure to check your account regularly.

The trading fees for trading perpetual futures on gate.io are pretty low. You only have to pay a maker fee of -0.025% and a taker fee of 0.075%. You can get further discounts on the trading fee using point.

You can also trade delivery futures on gate.io. Follow the below steps to trade delivery futures.

1. After opening an account and depositing the money, hover your mouse over the ‘Trade‘ option in the navbar.

2. You should see the perpetual option in the options box.

3. Click on the ‘delivery’ block and you will be taken to a new page.

4. On this page, you can choose whether you want to trade weekly, bi-weekly, or quarterly.

5. The options will be valid for the period mentioned and you will have to pay a fixed fee when choosing delivery futures trading.

6. You can then select the price you want to place your option at, the amount, and then either go long or short.

7. Ta-Da! You just successfully placed your first delivery futures options on the gate.io platform now.

Conclusion

Crypto futures are a great way to get in on the crypto action without owning any tokens themselves. Trading futures allows you to make profits off of the crypto space with reduced volatility and risk.

Gate.io is one of the best places to trade either perpetual futures or delivery futures. The special perpetual contract bonus feature is a great deal if you need some help getting started in the world of futures trading.