We recently conducted a very interesting interview about the future and impact of the Binance exchange in Latin America to our friend Mariangel Garcia who is the Community Manager of Binance LATAM.
This time we bring another interesting interview with the Binance Angel, Mire Acosta, in which we will talk a little about the benefit that leveraged futures trading can bring to Binance traders.
As we know, the Binance futures platform has been taking over the vast majority of the futures trading volume of the entire cryptocurrency market and for this reason we have decided to give this platform a space for conversation.
- To start, can you give us a brief explanation about the purpose of the Binance Futures platform?
Look: A futures contract is an agreement to buy or sell a commodity, a currency or any financial instrument at a certain price in the future, what differentiates it from the traditional spot market is that in a futures market you are not buying and selling the asset as such, but a representation of it. In this case, you are not buying bitcoin, but rather speculating on the price of bitcoin in the future. Perpetual futures never close, so you could have your trade there until you reach your planned earnings.
Futures contracts allow the user to hedge and manage risks:
For example, you buy $ 1,000 in bitcoin on the spot market thinking that it will rise and at the same time open a trade for $ 20 short at 50x which is equal to the same thousand dollars. In case the price drops you would be winning with the futures trade.
Short exposure– Traders can bet on the performance of an asset even without having it. This would be a case similar to the previous one, if you believe that bitcoin is going to go down, enter a short and you do not have to have bitcoin to do it, it only requires being in usdt.
Leverage: Traders can enter with positions larger than their account balance: in the previous example we saw that with $ 20 we opened a position of 1000.
two. Do you consider Binance Futures to be a simple platform to use for new users?
Look: Binance futures is a friendly and intuitive platform, this has characterized binance products in general and also offers a demo version for those who do not want to risk learning with real investments, they give you a testnet money to operate. My recommendation regarding this is that they only take with an amount of money similar to what they can do in real life, that is, if I have a margin of 100,000 dollars, they will probably never pay me, but if I have only 50, yes.
On the other hand, despite being very simple, it offers several types of orders that allow a safer operation, it is necessary to inquire about how they are used. This is all in the guides.
3. What contribution does Binance Futures make to the general adoption of cryptocurrencies?
Look: The contribution of binance futures in addition to being a very simple platform as we have already expressed, makes crypto assets trading available to anyone since there you can start operations from $ 1 while in the spot market it is generally from $ 10 . This makes the crypto market very special because we know that many financial markets require large sums of money to start.
Four. Do you think the futures platform has given him great support and helped the growth of the Binance exchange as such, why?
Look: The binance futures platform has had rapid growth since its launch and has been an unexpected success in terms of volume, the platform's deep liquidity allows traders to trade easily.
He currently offers 31 perpetual futures contracts, our beloved DOGE being his latest addition.
This accelerated growth is not free, the future binance platform has the lowest rates in the market and may be even lower for those who pay with bnb and have differentiation by maker and taker and by VIP level as well.
Stable and fast motor: The binance matchmaking engine is unprecedented in the industry, it is the most stable and fastest known in the crypto world. This that almost all of us do not know is very important because it allows us to manage up to 100,000 orders per second. Other well-known exchange engines process 100 or fewer orders in the same period of time, on the other hand to avoid spikes during future high volatility periods use the last price (last Price) and the brand price (mark Price). This basically translates into the ability to handle extreme volatility and avoid unnecessary settlements
The ease of changing futures to spot quickly allows traders to move between spot and futures in periods of volatility to capitalize on market movements. In conclusion, future has been a success for the liquidity of the exchange and for the improvement of technical tools.
5. What advice would you give to new users entering the world of futures trading?
Look: That they manage their risk management very well, that they always operate in an isolated margin and using stop limits or stop markets depending on market volatility. While it is true that with leverage you can earn a lot, also in case the position goes against they can be liquidated, so keep a conservative leverage, hopefully less than 20X.
6. How can the leverage that Binance Futures offers investors help?
Look: In binance futures the trader can manually choose their leverage up to 125x, starting with the default 20x, high risk warnings at the leverage level start to appear. The larger the position size, the lower the amount of leverage that can be used, the settlement price must always be taken into account. Novice traders should avoid leverages above 5x in my opinion.
7. Do you consider that it is extremely important to have a defined strategy when trading futures?
Look: The strategies are always necessary. Know the profit taking price, the stop limit price, have confirmations to make an entry. All this type of data is necessary in all operations. Personally, it seems to me that futures lends itself perfectly to trading in scalping but this is already defined by each trader.
8. And finally: What message would you give to people who have not yet tried the Binance Futures platform so that they dare to try it and learn more about it?
Look: Binance futures is the perfect opportunity to enter the world of financial markets, the low investment required, the number of tutorials that exist, and the ease of operating the platform undoubtedly make it an excellent option to start trading.
It has been a great pleasure to have a member of the Binance team again to discuss the products offered by this great exchange.
We want to thank our friend Mire Acosta for taking the time to answer the above questions and thus giving her the vision that a great trader like her has on this platform and the benefits it can bring for everyone.
If you want to get into the world of futures trading, we recommend reading this tutorial on how to get started on Binance Futures and with this link you can open a Binance account with a 10% discount on trading fees.