I see many new traders always ask about futures, so today I want to share some practical experiences.

What is futures trading? Simply put, it is a method of placing orders to predict the price trend of a coin. You can guess the price will go up (called Long) or down (called Short). Most exchanges today support this feature for most coins, and if your prediction is correct, you make a profit; if wrong, you incur a loss.

But the danger here is leverage. This is a concept that allows you to borrow money from the exchange to trade with a larger capital. For example, if you have $1 and use 100x leverage, you can trade with $100. However, because it is borrowed money, the risk is very high. If your order goes in the wrong direction and loses enough to wipe out your principal, the exchange will automatically liquidate your assets (liquidation), and you will lose 100% of your funds.

That’s why understanding what futures trading is must go hand-in-hand with risk management. I’ve learned that you need to use two important tools: SL (Stop Loss) and TP (Take Profit). Most exchanges have automatic features to set these points, helping you avoid liquidation or missing out on profits.

Based on my experience, I have a few basic principles for beginners:

If trading BTC, only use up to 5x leverage. For ETH and altcoins, 3x or less is safer. Another tip is to split your capital into small portions, adding gradually to increase your ability to withstand losses when the market fluctuates. Pay special attention to the liquidation level—try to set it as far from the current price as possible, so that a quick market move doesn’t send you an email about your assets being liquidated.

Remember, this is just personal experience sharing, not investment advice. You should do thorough research before starting. If you enjoy trading-related content, follow me for more updates.