In traditional finance, traders measure daily price change by calculating the average closing price changes. Leverage is the most appealing aspect of futures contracts, but it is worth noting that these instruments have long been used in stock markets, commodities, indexes, and foreign exchange (FX). ![]() These leveraged futures contracts are synthetic, and it is even possible to short or place a bet on the downside. ![]() ![]() However, those who often rely on incorrect information when trading futures contracts end up with heavy losses rather than profits. These instruments have benefits and can improve a trader's outcomes. However, unlike spot (regular) trading, the trader cannot withdraw from a futures market position until it has been closed. To enter these markets, a trader has to first deposit collateral (margin), which is usually a stablecoin or Bitcoin (BTC). Today, almost every cryptocurrency exchange offers leveraged trading using derivatives. The temptation to boost potential earnings by twenty times or more is often irresistible for most novice traders. This condition creates a FOMO-like situation where everyone gets greedy. ![]() The crypto sector is in a bull market, and frequent evidence comes from anonymous traders who post their five-, six- and seven-figure investment returns as screenshots on Crypto Twitter.
0 Comments
Leave a Reply. |