I have received quite a few questions about what trading futures is, so today I decided to write it down for your reference. Its core is quite simple – it is a trading method that uses leverage on crypto exchanges. Instead of just buying or selling normally, you can forecast that the price will go up (Long) or down (Short) and place orders accordingly. If your prediction is correct, you make a profit; if wrong, you lose – the mechanism is very clear.

The tricky part is the leverage. Most exchanges allow up to X100, meaning if you have $1, you can borrow an additional $99 to make a $100 position. It sounds attractive, but that’s also why many people get wiped out. When the trade goes against you and the loss reaches your initial capital, the exchange will automatically liquidate, and you lose 100% of your money. So before trading futures, you must understand this risk clearly.

I want to share a few small personal tips. First, when placing an order, always set up a Stop Loss (SL) and Take Profit (TP) – these are two basic risk management tools. SL helps cut losses promptly, TP helps automatically lock in profits before the price reverses. This is very important and should not be overlooked.

Regarding leverage, if you’re trading BTC, I recommend keeping it at X5 or below, enough to be safe while still making a profit. For ETH and other altcoins, X3 is the best. Another tip is to divide your capital into multiple smaller investments instead of going all-in at once, as this increases the risk of liquidation. Also, pay attention to the liquidation level – try to keep it as far from the current price as possible, so that just stepping away from your computer won’t trigger a liquidation.

Remember, this is just personal experience, not investment advice. Everyone has different risk tolerance, so you should evaluate your own ability before participating in futures trading.