Tutorial - Binance Futures

Cryptocurrency

Tutorial - Binance Futures

Binance Futures, the leader in futures

Overall, this platform strongly resembles that of Binance's spot exchange. For users, the experience is just as smooth and the execution of transactions is relatively intuitive.

Since its deployment, Binance Futures has quickly established itself as a prominent place among the platforms dedicated to futures. In just 7 months, Binance Futures has even become the most used platform on the market, ahead of Huobi, OKEx, and BitMEX.

However, the latter is not to be put into everyone's hands and will generally be reserved for traders who already have knowledge in the field as well as good risk management.

Even though leverage may seem like a good way to make significant gains, you must keep in mind that the risks involved are significant. Liquidation can be almost instantaneous if the leverage chosen is too high or your strategy is not suitable.

For these reasons, I will explain to you step by step how this platform works while detailing the different aspects of such trading.

How to open an account on Binance Futures?

Before you can open a Binance Futures account, you must have a regular Binance account.

If you already have an account, click the link below to access Binance Futures.

https://www.binance.com/en/register?ref=39534459

Now that you are on the platform, go to the bottom right and click on Open Now:

Binance Futures interface

Once your account is activated, you now have access to all the features of Binance Futures as well as its interface. Let's take a look at what this interface is made of and how it differs from Binance.

At the very top is the Binance Futures menu. The latter allows you to access guides on futures trading, manage your APIs, switch to the spot trading platform, access the referral program and deposit funds:

Just below, you will find a lot of information related to the pair you have previously selected, here BTC / USDT.

This is where you can:

  • choose the contract you want to negotiate.
  • consult his live course.
  • consult the last market price of the contract. This is the price used for the profit and loss calculation. It may differ from the live price in order to avoid manipulation.
  • view the payment rate exchanged between buyer and seller for the next financing.
  • view various other market data, such as changes and volume over the past 24 hours.

To change the contract, click on the BTCUSDT and choose the one that interests you:

Compared to the competition, Binance Futures offers you futures contracts for a significant number of cryptocurrencies. It includes: ETH, BCH, XRP, EOS, LTC, TRX, ETC, LINK, XLM, ADA, XMR, DASH, ZEC, XTZ, BNB, ATOM, ONT, IOTA, BAT, VET, NEO, QTUM, IOST .

Below, you will find the graph of the evolution of the selected contract. You have the possibility to change the unit of time (minutes, hours, days, etc.), to add indicators (MACD, volume, etc.), and to use several drawing tools to do technical analysis: trend lines, supports / resistances, etc:

On the right of the chart is all the information on pending orders. The first tool on the left of this section allows you to get a quick overview of the situation between buyers and sellers. You can zoom in and out using your mouse wheel.

On the right, you can see live buy and sell orders as well as the latest transactions. You can adjust the precision of the orders in the drop-down menu located in the upper right corner of this area (0.01 by default):

On the far right, this is where you can place your orders and change your leverage. I detail this section in the rest of the tutorial:

Just below is the section devoted to deposits, withdrawals, recharging your Binance Futures wallet:

Finally, the bottom section allows you to monitor your trading activity. You can check the current status of your positions, view your pending orders as well as get a complete history of past transactions:

Transfer funds to your Binance Futures account

To use Binance Futures, you must first deposit funds there. Each platform has its own wallet, the funds it contains cannot be mixed.

However, you can transfer funds back and forth between the Binance wallet and your Binance Futures wallet. The transfer is almost instantaneous and free of charge. It is only possible to transferTether(USDT) and BNB between the two portfolios.

To transfer funds to your Binance Futures wallet, click the Transfer button at the bottom right of the page. Define the cryptocurrency and the amount you want to transfer and click on Confirm transfer:

Adjust your leverage

Binance Futures allows you to manually adjust the leverage for each of the available contracts.

To adjust the leverage, click on the button with the "20x" in the order placement section. Specify the degree of leverage by adjusting the slider, then click Confirm:

Note that the larger the amount of your order, the less leverage you can use. Likewise, the smaller the amount of your order, the higher the multiplier you can use.

Be careful, be careful when using a leverage greater than x3. The greater the leverage, the greater the risk of liquidation. If you are new to trading, learn how to trade without leverage first before you consider using it.

Available orders and their use

On Binance Futures, 4 types of orders are available to you. Even though you are probably familiar with some of them, let's go over how they work.

The interface itself is pretty straightforward. The choice of order is made at the top. Based on your current leverage, Binance will tell you how much USDT it will cost you to execute your position.

On the capture below, I want to place an order with x20 leverage including 1 BTC. The tool therefore tells me that I would take a position with plus or minus 340 dollars depending on whether it is a long or a short.

The limit type order

The limit order is an order for which you place your position in the order book with a specific price that you determine in advance. When you place a limit order, the trade will only be executed if the market price reaches the price you specified.

So you can therefore use limit orders to buy at a lower price or to sell at a price higher than the current market price. Its use is shown in the screenshot above.

Market type order

The market order is an order to buy or sell at the best price currently available in the order book. It is executed in relation to the limit orders which were placed previously.

Additional feature of such an order, you will be subject totaker type fees, therefore higher than those of the maker type.

To place such an order, you just have to fill in the amount you want to commit and click on the desired button. The execution of a market order is instantaneous.

Stop-Limit order

This order, more interesting than the others, includes several components, a stop price and a limit price. The stop price is simply the price at which the limit order will be triggered. The limit price is the price at which the limit order will be triggered.

This means that once your stop price has been reached, your limit order will immediately be placed in the order book.

For example, I indicate in Stop the price at which I want my order to be triggered, here 6900 USDT. In the event that the BTC reaches this value, a limit order will then be added to the order book according to what is indicated in Price, here 6950 USDT:

Stop-market order

Like the stop-limit order, the stop market order uses a stop price as the trigger. However, when the stop price is reached, it triggers a market order instead.

In the example below, knowing that the BTC is at 6850 USDT, I want to open a long order once its price exceeds 6900 USDT. Otherwise, if I click on the short button, a short position will be opened as soon as the BTC reaches 6900 USDT:

What is Post-Only, Time in Force and Reduce-Only

When using limit orders, you can define additional instructions in parallel. Additionally, with Binance Futures, you can add optional features to your orders by clicking the Advanced button, above the Buy and Sell buttons:

Three options are available to you, Post-Only, Time in Force (TIF) - itself composed of 3 options - and Reduce-Only. Let's see in detail what they are used for:

The Post-Only:

If you check the Post-Only box, it means that your order will always be added to the order book first and will never be executed against an existing order in the order book. This option is often used by market makers, in order to increase the order book without selling their assets. This is a technique of stock market manipulation, called spoofing.

Time in Force:

The Time in Force option allows you to specify how long your orders will remain active before being executed or expiring. Three options are available to you:

GTC (Good Till Cancel): The order will remain active until it is executed or canceled.

IOC (Immediate or Cancel): The order will be executed immediately. If it is only partially executed, the unfilled part of the order will be canceled.

FOK (Fill Or Kill): The order must be filled in full and immediately. Otherwise, it will not be executed.

Note that Post-Only cannot be used in conjunction with the TIF option.

The Reduce-Only:

Checking the Reduce-Only box ensures that any new orders you set will only decrease, and never increase your current open positions.

How to use Binance Futures Calculator?

Binance Futures also includes a calculator that will allow you to verify your orders before executing them. The latter allows you to calculate a lot of data that you need before opening a long or short position. Operation is very simple and you can also adjust the leverage you want there.

To activate it, click on the calculator-shaped button in the upper right corner of your interface:

This option, although discreet, turns out to be a great ally in order to verify any order that you are about to open. I strongly advise you to use it consistently. The Binance Futures calculator consists of 3 tabs:

NLP - This tab is used to calculate your initial margin, profit and loss and return on equity based on expected entry and exit price and position size.

Target Price - This tab is used to calculate at what price you will have to exit your position to achieve the desired percentage return.

Clearance Price - This tab is for your estimated liquidation price based on your portfolio balance, expected entry price and position size.

For example, with x20 leverage, I want to know at what value I need to exit my long position to get a 4% ROI. In the event that I enter $ 6700, the calculator tells me that I should exit at $ 6713.40:

When are your positions likely to be liquidated?

You may be liquidated when your “Margin Balance” falls below the required “Maintenance Margin”.

The margin balance is your Binance Futures account balance, including your unrealized PnL. Thus, your profits and losses will lead to a change in the value of the latter.

The “Maintenance Margin” is the minimum value necessary to keep your positions open. This varies depending on the size of your positions. Thus, larger positions require a higher maintenance margin.

To help you visualize all this data, a tab at the bottom right of the Binance Futures interface is dedicated to it. This tool allows you to quickly monitor any potential risk of your open positions being liquidated.

If your margin ratio reaches 100%, your positions will be liquidated. This tool is proving to be a great ally for monitoring your trading, don't let it go.

In the event of liquidation, all of your pending orders are canceled. It is best to closely monitor your positions to avoid any potential reverse charge, which involves additional fees.

If your position is about to be liquidated, I advise you to close it manually rather than waiting for the reverse charge. So don't wait to reach 100%, it is better to make a decision as soon as the margin ratio reaches critical percentages.

Ratings and reviews on Binance Futures

With its simple and clean interface similar to that of the main platform, Binance Futures will make your first steps in trading with leverage much easier.

In just a few months, Binance Futures has become the leader in its sector by becoming the most popular platform for traders, ahead of BitMEX and OKEx.

In addition, the many cryptocurrencies available on the platform allow Binance Futures to offer a much larger catalog than its competitors. In addition, although the markets are numerous, their liquidity remains high and makes it possible to reduce the risks of price manipulation.

Binance Futures also comes with a substantial insurance fund that will reassure traders and investors in many circumstances. Offering such coverage to its clients is now essential for exchanges dealing with futures contracts.

However, although the platform seems accessible to the greatest number, it is nonetheless dangerous for your wallet. Trading with leverage is not to be taken lightly and the risks of liquidation are real, especially if you are using an indecent multiplier.

Before you get started on Binance Futures, learn enough about spot trading and be well aware of the risks that come with futures contracts. With a sufficient knowledge base, Binance Futures will give you its full potential without you needing to take unnecessary risks.

Congratulations 🎉 You have reached the end of this tutorial! You now know how to use the features of Binance Futures and you can start trading there.

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Louis choquet
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