How to choose the best futures trading strategy?

Crypto futures traders will not directly operate the underlying assets, but profit from the price trend. The futures market does not need to have real assets, and it often provides better liquidity than the spot market. The choice of futures trading strategies is closely related to profitability. Of course, a good future trading platform is essential. Here, we recommend the best crypto exchange CoinW.

What are the crypto futures trading platforms?

At present, the world’s major crypto futures trading platforms include CoinW, OKEX, BitMEX, Coinbase Pro, ZB, Bittrex, Poloniex, Bitfinex and OKCoin. Among them, CoinW is the best choice for you. It not only proposes a zero service charge measure in a variety of crypto transactions, but also its security. Since the birth of CoinW in 2017, there has never been a security incident, which is unique on many futures trading platforms.

How should crypto futures trading strategies be formulated?

1. Pay attention to market fluctuations

The most important thing for trading crypto and crypto futures contracts is to be aware of the high volatility. Since high volatility is a risk in itself, it also brings more opportunities to short-term traders who like to predict rapid price movements.

2. Expand your potential profits

You can use leveraged trading to strengthen your contract returns, which allows you to use a small amount of capital to increase your position. However, this approach may also significantly increase the risk of liquidation. Beginners should avoid betting on high leverage when trading futures contracts. However, low leverage is also a good choice.

3. Further trading Strategies

In terms of short-term trading strategies, crypto futures contracts provide more options than general crypto trading markets. When operating futures contracts, you can predict the decline of asset prices and short them. Of course, you cannot do this in the spot market.

The most stable crypto futures trading strategy

Futures Spread Trading is a market neutral strategy. Investors seek to profit from the change of short and long price difference of two futures contracts of the same asset with different delivery dates, or from the futures contracts of two different assets with the same delivery date and related prices. The price difference (or point difference) is the price difference between two futures contracts. This difference is not constant and depends on several factors (discussed below). The price of a futures contract is equal to the spot price plus the cost incurred from holding the asset to the maturity date of the futures contract. Holding cost refers to the cost of holding assets until the expiration of futures contracts.

The price of each futures contract is formed by the market according to the market participants’ expectation/calculation of the future price of the asset on the maturity date and the estimated cost of holding the asset to the maturity date. Because each futures contract is traded in different markets and has different liquidity, the price fluctuation of each contract may be different, resulting in changes in the differences between contract prices.

Final thoughts

Crypto futures trading is a high-risk strategy, involving frequent trading of cryptocurrencies in pursuit of long-term profits. Anyone interested in encryption of futures trading should know where they plan to trade, formulate detailed futures trading strategies, and adhere to their entry and exit points. If you want to master more crypto futures trading strategies, you may as well register your CoinW account and obtain the relevant skill manual.