Perpetual Futures Beginner's Guide
-
What are Perpetual Futures?
-
-
Go Long: You profit if the market price rises.
-
Go Short: You profit if the market price falls.
-
-
Core Trading Terms
-
Leverage: This allows for larger trades with the same principal, magnifying both gains and losses. For example, with 10x leverage, a 5% increase in the underlying price can result in a 50% return, while a 5% drop results in a 50% loss.
-
Margin: The initial capital needed to open a position.
-
Initial Margin: The minimum amount required to open a position.
-
Maintenance Margin: The minimum amount required to keep a position open.
-
-
Mark Price: A price based on weighted external market data used to determine liquidations. It helps prevent unnecessary liquidations caused by market manipulation or lack of liquidity in the intraday trading price.
-
-
Position Modes
-
Isolated Mode: The margin is fixed for a specific position. The maximum loss is limited to the margin allocated to that position.
-
Cross Mode: All positions share the account balance as margin. While this improves the ability to withstand price fluctuations, liquidation could result in the loss of your entire account balance.
-
-
Risk Management: Liquidation & ADL
-
Liquidation: Triggered when the margin balance falls below the maintenance margin level (maintenance margin level ≤ 100%).
-
Insurance Fund: This fund is used to cover losses exceeding the margin (bankruptcy) to ensure the stability of the trading system.
-
Auto-Deleveraging (ADL): If the insurance fund cannot execute a liquidation order, the ADL system selects opposing high-profit traders to reduce their positions. You can monitor your ADL risk via the lights (signal icons) on the website; more lit lights indicate a higher probability of being deleveraged.
-
-
Tips for Beginners
-
Lower Leverage: Avoid excessive leverage to prevent liquidation from minor market fluctuations (e.g., 100x leverage can trigger liquidation with only a 0.5% price move).
-
Set Stop Loss: Predetermine your loss limits to prevent further capital erosion.
-
Diversify Risk: Do not invest all your funds into a single high-risk position.
-
You May Also Like
Futures Strategy Trading Beginner Guide
Futures strategy trading is an automated futures trading tool that executes trades via trading bots based on parameters preset by users. Compared with traditional trading, it significantly reduces the impact of emotional decision-making, enabling users to trade according to preset rules even during periods of extreme market optimism or pessimism.
Futures Copy Trading Beginner’s Guide
Futures Copy Trading is a feature that allows users to automatically replicate the trades of professional futures traders. You can select a lead trader on the platform and follow them with a simple click. When the trader opens or closes a position or adjusts their strategy, the system will mirror the trader’s actions in real time and automatically execute the same trades in your account.
Futures Protection Fund Beginner's Guide
Futures Protection Program is a subsidy program offered by CoinW for futures traders. If a user's position is forcibly liquidated, they can claim a USDT subsidy based on their accumulated Futures Protection Fund. The subsidy can be used to offset liquidation losses, trading fees, or margins, helping reduce the overall trading risk.