Guide to Trading Futures Contract on BingX for Beginners

By simplifying the futures contract trading process, BingX has been helping both newcomers to the market and cryptocurrency experts to manage and use leverage confidently and effectively. The total value of perpetual futures contracts on BingX is estimated to be up to $14 billion, so mastering futures trading on this platform will be a prerequisite. Here is everything you need to know if you plan to participate on this platform in 2024. Table of Contents:

• Steps to Trade Futures Contracts on BingX
• What are Derivatives Trading and Pre-Market Trading?
• How Does the BingX Derivatives Trading Interface Work?
• BingX Derivatives Trading Features
• Risk Management on BingX
• Why Choose BingX?
• Trade Futures Safely on BingX
• Frequently Asked Questions

Steps to Trade Futures Contracts on BingX

In general, to start trading derivatives products on BingX, users will need to follow a few basic steps:

• Register and verify their account
• Deposit funds into the Funding wallet
• Transfer funds to the Futures wallet
• Select the trading pair
• Choose the order type
• Focus on the necessary leverage (if any)
• Open and close orders accordingly

To help you understand better, we can combine them into 3 main steps and let's go into the details of each step on this platform.

Create a BingX Account

Step 1: Create an Account

Here are some additional steps to complete the registration on the BingX trading platform:

• Registration: Access the homepage and click "Register". You need to fill in your email/phone number and create a password to proceed to the verification process. You can also register using your existing social media account.
• KYC Verification: Upload your ID and wait for the BingX team to approve it.
• Access the Trading Interface: Once on the platform, you need to find the Derivatives section and select "Perp Futures" or "Standard Futures", depending on your experience level and trading performance.

After completing the above steps, you may consider depositing funds into your BingX account to start trading. To trade futures contracts on BingX, you must transfer funds into your Futures wallet. This fund is separate from your Spot or Funding wallet, which are used for spot trading and deposits. You can transfer funds to the Futures wallet by selecting the amount you want to allocate for futures trading. You can do this directly within the app or web interface under the "Transfer" option.

Step 2: Explore the Derivatives Section on BingX

After you've found the right segment of the BingX "Derivatives" trading ecosystem, there are a few more minor steps involved:

• Activate Futures Trading: Since futures trading carries high risk, users must read the user agreement, risk notice, and answer a questionnaire related to trading before being allowed to access the dashboard.
• Check the Dashboard: After successfully answering the futures trading-related questions, you can activate this option and access the dashboard. You may need to navigate through the market, trading tools, and order book to see how the elements operate during the trading process.

BingX Trading Interface

Step 3: Open and Close Positions

This step involves selecting the trading pair you want to trade. After that, you need to choose "Long" or "Short" depending on how you see the price movement of the trading pair over time. Specifically:

• When you expect the asset to rise, choose Long.
• If you are bearish on the asset, consider Short.

Open/Close Positions

To close a trade, you can use the market order or take profit option. Additionally, you can also choose risk management tools like stop loss or trailing stop loss to automatically close your position if the pre-set conditions are triggered.

It's important to note that any variation of a stop loss order is not considered a way to close a trade. It's more like a safety measure to minimize losses if and when your trade goes against you. On the other hand, the "take profit" option helps you realize gains in a volatile market.

After handling these factors, you need to perform two actions:

• Place the Order Type: BingX allows you to place market orders (executed immediately at the current market price) or limit/trigger orders (executed when a specific price level is reached).
• Adjust the Leverage: Leverage allows you to amplify your trading position by borrowing funds. On BingX, you can use up to 125x leverage, meaning you can control a much larger position with a smaller amount of capital. However, higher leverage not only brings the potential for greater profits but also increases the risks you face. You need to enter the desired margin ratio.

Adjust Leverage on BingX

Your futures trading positions on BingX may be liquidated based on the leverage and market volatility. While higher leverage can be useful to capture more profits, it can backfire in a volatile market where 2% to 5% drops are common and expected.

The ability to liquidate increases if you increase leverage at a time of high market volatility. For example, if you are using 50x leverage, you will be liquidated if BTC drops 1.8%. This is why trading with high leverage is riskier and vice versa. For 1x or lower leverage, your BTC price would need to drop close to 50% to trigger the liquidation process. Therefore, lower leverage will be better if you feel the market will be chaotic for a while. What are derivatives trading and pre-launch trading? If you are exploring how to trade futures contracts on BingX, you should also learn a bit more about what derivatives trading in general is. Accordingly, derivatives trading, especially in the cryptocurrency field, allows traders to profit from asset price fluctuations without directly owning them. Concept of derivatives trading Derivatives in general are financial contracts whose value is derived from an underlying asset, such as cryptocurrencies, stocks, or commodities. In the cryptocurrency market specifically, derivative products allow traders to speculate on price changes or hedge their positions, often using leverage to amplify their potential profits. BingX offers various derivative options, such as futures contracts and perpetual futures contracts, allowing users to speculate on cryptocurrency prices without actually owning them. Pre-Launch Futures: BingX's Newest Product BingX's Pre-Launch Futures feature allows users to speculate on the future price of new tokens before they are officially listed on the market. BingX even allows users to trade pre-launch futures, providing early access so users can potentially profit from new assets. Traders can leverage market predictions and speculation models to determine the token's value. Unlike traditional pre-market spot trading, which can freeze capital and limit liquidity, pre-launch futures allow for more efficient capital utilization and superior flexibility. Here's how it works: - Users can participate in futures contracts for new tokens, betting on whether the token price will rise or fall. This gives traders the opportunity to lock in potential profits before the token is available for trading on the broader market. - Similar to traditional futures trading on BingX, pre-launch futures allow users to trade with leverage. This enables traders to amplify their potential profits (or losses) by borrowing capital to increase the size of their positions. - Unlike pre-market spot trading, where liquidity can be constrained, pre-launch futures provide superior liquidity. Users can trade without their capital being frozen, which often occurs in pre-launch trading. - Like any futures contract, pre-launch futures carry the risk of liquidation if the market moves against the trader's position. BingX provides tools like stop-loss orders and margin management to help mitigate the risks. The process involves a composite pricing mechanism sourced from market makers. The price is not based on the spot trading value but instead relies on speculation models and other factors such as pre-sale price, market demand, and expected initial trading volume. After the token is officially launched or listed, the futures contracts are typically settled based on the actual market price. Here's a flow diagram of each process: BingX pre-launch derivatives Types of Derivatives On platforms like BingX, you'll find perpetual futures and standard futures contracts. Options are not available on BingX but are a common derivative instrument. Perpetual futures interface - Futures Contracts: Contracts to buy or sell an asset at a fixed price on a future date. These are the most common derivative as they allow traders to capitalize on price predictions. - Perpetual Futures Contracts: As the name suggests, these contracts have no expiration date, making them ideal for long-term strategies. - Options: These contracts give the trader the right, but not the obligation, to buy or sell the underlying asset at a predetermined price before a specific date. Options trading is like booking a hotel room. Imagine you're booking a room for a vacation. You pay a small fee to reserve the room, but you're not obligated to actually stay there. If your plans change, you can simply forgo the room, and the only cost you'll incur is the reservation fee. How Does the BingX Derivatives Trading Interface Work? As mentioned earlier, BingX offers specific portfolio options for derivatives trading. These include standard futures contracts and perpetual futures - one with an expiration date that requires contract renewal, and the other that allows holding the contract until expiration. It's important to note that BingX's perpetual futures ecosystem supports both USD-M and Coin-M settlements. USD-M settles in USD, while Coin-M settles in the specific cryptocurrency pair. The standard futures contracts are simpler to operate for the average trader/investor.

Standard Futures Contract

BingX Derivative Trading Features

Let's take a closer look at the features that BingX provides for its over 10 million users:

• High Leverage: BingX offers up to 125x leverage for perpetual futures contracts, giving traders the opportunity to amplify their positions. However, it is important to use leverage carefully, as it can increase both profits and risks simultaneously.
• Competitive Fees: BingX's trading fees are 0.02% for makers and 0.05% for takers on futures contracts. VIP users enjoy even lower fees.

Did you know? For VIP Level 1, with a 30-day trading volume of at least 50,000 USDT, traders can enjoy maker and taker fees as low as 0.0140% and 0.04%, respectively.

• Global Reach: The platform operates in over 100 countries, allowing traders worldwide to access its services in multiple languages.
• Transparency: BingX places a strong emphasis on user security, providing features like Proof of Reserves and various compliance certifications in regions like Europe and Australia.

Risk Management on BingX

You must always prioritize and focus on the safety of your cryptoassets. To do this, ensure you only click on official links, carefully check your details before confirming transactions, and be confident in the necessary steps before starting futures trading.

Futures trading has the potential to generate significant profits, but it also comes with risks, especially when using leverage. To mitigate these risks, BingX provides various tools and strategies that traders can use to protect their capital, including:

• Stop-loss orders: Allow traders to automatically close their positions when the market reaches a specific price, limiting large losses.
• Take-profit orders: By setting take-profit levels, traders can automatically lock in profits when the market reaches favorable prices.
• Margin options: Choose between isolated margin, which allocates risk to a specific position, and cross-margin, which uses the entire account balance to maintain positions, offering more flexibility but higher risk.
• Leverage management: Traders should adjust their leverage based on their risk appetite. Higher leverage can lead to greater profits, but also greater potential losses.
• Futures calculator: BingX provides a futures calculator tool to help you determine liquidation prices, potential profits, and other key information for a given asset price.

BingX Futures Calculator

Did you know? BingX offers a Dual Price Mechanism to protect users from forced liquidations due to extreme market volatility. This ensures that forced liquidations only occur when market conditions are truly critical.

Why Choose BingX?

There are many cryptocurrency exchanges to choose from, and users should try out a few to understand which one best suits their needs. Here are some key things to know about BingX and the benefits it offers traders.

• First, as a global centralized exchange (CEX) established in 2018, BingX provides spot, derivative, and copy trading services, as well as crypto-related asset management services. BingX supports over 780 coins and more than 840 trading markets or pairs.
• Second, according to CoinMarketCap rankings, BingX is one of the top 15 spot exchanges in 2024, ranked by traffic, liquidity, trading volume, and the legitimacy of reported trading volume. The platform is also known for its prominent campaigns and various sports partnerships, including with Chelsea Football Club and two UFC champions.

Additionally, BingX offers several unique features that enhance the trading experience for both beginners and experienced traders. Let's take a closer look at some of the platform's strengths and features.

User-Friendly Interface

The simple design ensures that even new traders can access advanced features like futures trading and risk management without feeling overwhelmed.

Copy Trading Support

One of BingX's best features is the Copy Trading tool, which allows users to follow and replicate the strategies of successful traders. The platform provides various customization options, enabling traders to copy based on fixed margins or position ratios.

BingX has further enhanced this feature with the Feed, where professional traders share their in-depth market insights and analysis, contributing to a collaborative trading environment.

Grid Trading Options

BingX also supports grid trading, offering various versions such as Spot Grid and Futures Grid.

Grid Trading on BingX

"In the rapidly changing world of cryptocurrencies, manually executing trades can be a challenge, especially for busy individuals. This is where grid trading on @BingXOfficial really shines!"

Vivian Lin, Product Director, BingX

These tools automatically buy low and sell high within a predefined price range, making them an ideal way to potentially profit from the volatility of the cryptocurrency market.

Multilingual Support

By 2024, this platform will support a number of languages, including English, French, Italian, and Vietnamese, making it easy for traders around the world to participate in the platform without language barriers.

BingX supports multilingual

Advanced Trading Tools

This platform provides advanced trading analysis tools, including detailed asset charts, volume data, and various technical analysis models.

BingX Academy

BingX provides educational content through BingX Academy, including guides and articles on topics such as technical analysis, futures trading, and market trends... The platform also organizes webinars and regularly updates the market.

BingX Academy allows traders to access many guides, articles, and tutorials, covering topics such as cryptocurrency basics, technical analysis, and advanced trading strategies including futures and derivatives.

For users looking for something beyond futures trading, BingX offers an asset section, including a Shark Fin service with principal protection and some yield-generating tools for flexible and fixed-term products.

BingX Academy

Trade Futures Safely on BingX

While this guide has presented how to trade futures on BingX, the best way to get a grasp of the situation is to try it out for yourself. To maximize your experience and get a feel for futures trading, you should start with a small amount of capital, leveraging to assess and familiarize yourself with this form.

Always prioritize the safety of your assets. Only click on official links, thoroughly check your details before confirming trades, and ensure you are confident with the necessary steps before starting futures trading.

Frequently Asked Questions

What is the difference between a Futures Contract and a Perpetual Futures Contract on BingX?

A Futures Contract is a standard derivative contract with a specific expiration date. However, a Perpetual Futures Contract has no expiration date, allowing you to hold a position indefinitely.

How does BingX ensure the security of the platform and user funds?

BingX uses bank-grade custodial solutions and multi-factor authentication (MFA), and regularly undergoes security audits by firms like CertiK and SlowMist. The company also provides 100% Proof of Reserves to ensure user funds are fully backed.

How do I contact BingX customer support?

BingX provides 24/7 customer support through live chat and email channels. You can also access help through the Help Center on the platform's website.

Disclaimer: Futures trading, especially leveraged trading, carries a high risk and may not be suitable for all investors. The cryptocurrency market is highly volatile, and traders may incur significant losses, even losing their entire margin deposit.

It is crucial to thoroughly understand the risks and apply appropriate risk management strategies. The information provided here is for educational purposes only and should not be construed as financial advice. Always do your own research and consult a financial advisor before engaging in futures trading.