Bitget App
Trade smarter
Buy cryptoMarketsTradeFuturesCopyBotsEarn
Trading BasicsBeginner's guideFutures Trading
Bitget Beginner's Guide — How To Make Your First Futures Trade

Bitget Beginner's Guide — How To Make Your First Futures Trade

Beginner
2024-04-10 | 15m

Overview

● This beginner's guide is designed to help you make your first futures trade, using USDT-M Futures as an example.

● Before you begin your journey, please ensure that you familiarize yourself with the concepts discussed in the article and understand the process of futures trading along with its potential risks.

● Bitget strongly recommends newcomers to futures trading to start with a small sum of money for their first trade. This approach allows for a better understanding of the product's characteristics.

As mentioned earlier, futures are a form of derivative that can amplify both your gains and losses, which makes them distinct from conventional spot trading. We understand that certain aspects of futures trading can be confusing, so be sure to go through each section thoroughly before diving into futures trading.

Transferring funds to your futures account

First, let's start with the different account types. When you make your first deposit, the funds typically appear in your spot account. However, if you want to start trading futures, you'll need to transfer the funds first. Bitget offers multiple account types, including funding, spot, and futures accounts, which are designed to help users manage their risks more effectively. When you deposit funds into your Bitget account, they will initially go into your spot account. To begin futures trading, follow these steps to transfer funds from your spot account to your futures account:

App:

Step 1: Tap on Assets in the bottom right corner of the screen, then select Transfer to move funds from your spot account to your futures account. You'll also need to select the futures type when you make the transfer, as Bitget offers USDT-M, USDC-M futures, and Coin-M perpetual/delivery futures. For this guide, we'll focus on Bitget's USDT-M Futures.

Bitget Beginner's Guide — How To Make Your First Futures Trade image 0

Step 2: Each futures type requires a specific cryptocurrency as margin. On Bitget, USDT-M Futures require the USDT stablecoin, USDC-M Futures require the USDC stablecoin, and Coin-M futures require cryptocurrencies such as BTC and ETH. Select the appropriate funding option, enter the amount you want to transfer to your futures account, and tap Confirm.

Step 3: Return to the app's home screen, tap on Trade in the bottom navigation bar, then tap on Trade again, and select Futures.

After completing these three steps, you'll enter the futures trading page. However, refrain from placing an order immediately. Although the futures trading page is user-friendly, beginners should take time to understand the options, parameters, and concepts of futures trading. Once you've mastered the basics, you'll be ready to trade futures.

Website:

The steps on the Bitget website are similar to those on the app, with slight differences in button placement due to page design. If you decide to trade futures on the Bitget website, you'll also need to transfer funds from your funding account to your futures account. Simply click the [Wallet] icon at the top right corner, then select Transfer. On the "Transfer" page, choose the futures type, cryptocurrency, and enter the transfer amount. The process is shown in the images below:

Bitget Beginner's Guide — How To Make Your First Futures Trade image 1

Getting started with futures trading

Now that you have funds in your futures account, you can begin trading immediately. Below is a detailed guide on how to place your first futures order:

Bitget Beginner's Guide — How To Make Your First Futures Trade image 2

App:

Step 1: Choose your futures trading pair. When you enter the futures trading page, Bitget will display "BTCUSDT perpetual" in the top left corner by default. You can tap on this pair to select other trading pairs such as ETHUSDT, SOLUSDT, and more.

Step 2: Choose cross or isolated margin mode. This is a crucial step in futures trading. You can see explanations about cross and isolated margin modes when you click on the margin mode.

Note that if you choose cross margin mode, your available funds in the futures account will be used for all trades. If you prefer to closely monitor risks for specific trades, it's better to switch to isolated margin mode. In this mode, the maximum loss is limited to the available funds in the isolated margin account. In other words, cross margin is an "all-in" approach, while isolated margin is a relatively safer strategy.

Step 3: Set the leverage. On the right side of cross/isolated margin, you'll see a 10X icon. Clicking on it allows you to select your leverage level. Taking the BTCUSDT futures as an example, the minimum leverage is 1X and the maximum is 125X. If you're new to futures trading, it's recommended to keep your leverage under 10X.

Step 4: Select the order type. Since this is your first trade and you don't have any existing positions, you only need to open a new position. However, within the limit order, there are several options that determine your buying cost and timing, which is crucial in futures trading.

Bitget offers five order modes to users: limit order, advanced limit order, market order, trigger order, and trailing stop-loss. Here, we'll introduce three simple and common order types for beginners.

Limit order: When you select a limit order, the price of that pair is automatically displayed below. You only need to enter the amount of cryptocurrency you wish to buy or sell. The limit order is placed in the order book at a specific limit price, which is determined by you. The order is only executed when the market price reaches, or is higher than, the current bid/ask price. Limit orders help users buy low or sell at a price higher than the current market price. Unlike a market order, which executes immediately at the current market price, a limit order is placed in the order book and only triggered when the price is reached.

Market order: This is the "lazy" mode where the system selects the best available price to execute an order. If the order is partially filled or not filled, the system continues to execute it at the next best price.

Trigger order: Some users prefer to buy or sell a cryptocurrency only when it reaches a specific price point. Trigger orders fulfill this requirement by placing an order at a pre-determined quantity and price, which is triggered only when the market price reaches the trigger price. Funds will not be frozen before the order is triggered. It's important to note that trigger orders are somewhat similar to limit orders, but the latter involves a system-determined price, while the former requires manual input from you.

Step 5: Set take-profit/stop loss and place buy/sell order. Bitget strongly advises new users to set stop-loss or take-profit when venturing into futures trading for the first time. This will help you better manage risks and understand the impact of leverage on your account assets. Buying or selling an order means you are going long or short respectively. Choose "Buy" if you are feeling bullish and expecting a cryptocurrency to rise in price; otherwise, choose "Sell".

Website:

With a larger screen size, the website is more convenient for users who prefer doing technical analysis and are skilled at reading candlestick charts.

Bitget Beginner's Guide — How To Make Your First Futures Trade image 3

Whether you choose to trade futures on the website or the app, once you've gone through all the steps above and clicked on "Buy" or "Sell", you have executed a futures trade. While the steps may seem straightforward, there are still some matters you need to be aware of before making a futures trade.

Understanding orders and positions

Funding rates

Funding rates are also known as funding fees. Using USDT perpetual futures as the article's basis, since perpetuals do not have a delivery date, profits and losses are calculated differently compared to standard futures contracts. Bitget's funding rates reflect the profits and losses of traders, and they are updated and calculated every 8 hours based on the price difference between the futures market and the spot market. Bitget does not charge funding fees, and they are paid to winning accounts with funds taken from losing accounts, based on the unsettled positions.

Margin

The leverage in futures trading is facilitated through margin, which means you do not need to pay the full amount for the asset. Instead, you only need to invest a small amount of funds at a specified rate based on the futures value as collateral. This fund is known as margin.

Example:

User A holds a long 2X position in EOS/USDT with a current margin of 0.15314844 USDT. If A increases their leverage, the margin will reduce accordingly. Conversely, if User A reduces their leverage, the margin will increase accordingly.

Opening margin

Opening margin is the minimum amount of margin required to open a position, which is displayed as the "order cost" when placing an order.

Opening margin = (position value ÷ leverage multiple) + estimated opening fee at the time of opening a position When the order is fulfilled, any remainder after deducting opening fees will be automatically returned to the available funds.

Position margin

After creating a position, you can check the margin for that specific position in the Positions section of the futures trading page.

Initial position margin = position value ÷ leverage You can also adjust the margin of the position by using the "+/-" button or by adjusting the leverage.

Available margin

Available margin refers to the margin that can be used to open a position. This margin will be partially released, increasing the utilization rate of funds, due to the state of the hedge position where a larger margin is taken, and the actual state of the transaction shall prevail.

Maintenance margin

Maintenance margin refers to the minimum value you need to keep your positions open. It varies according to the current size of your positions.

Transaction fees

For beginners, fees are a major concern, just as they are in spot trading. Futures transaction fees are calculated based on a percentage, which may vary depending on the product type. Additionally, whether the trader is a maker or a taker also influences the percentage. For specific fee rates, please refer to the fee schedule.

Bitget Beginner's Guide — How To Make Your First Futures Trade image 4

Bitget's futures fee structure is open and transparent, and is calculated as follows:

Transaction fee = (position size × transaction price) × transaction fee rate = order value x transaction fee rate

Note: Order value = futures order amount × transaction price

For example, A buys a BTCUSDT futures using a market order and B sells a BTCUSDT futures using a limit order. If the transaction price is 60,000 USDT,

A's taker fee = 1 × 60,000 × 0.06% = 36 USDT

B's maker fee = 1 × 60,000 × 0.02% = 12 USDT

The key to success in futures trading

When trading financial products or derivatives, no strategy guarantees consistent profits without incurring losses. Even experienced traders like Warren Buffett have encountered setbacks throughout their long careers. However, one thing is certain—you need to manage your emotions, maintain the right mindset, and allocate your positions sensibly. For leveraged products like futures, any price fluctuation could significantly impact your assets, so it’s important to remain calm throughout the process. Remember, futures trading is not a sprint but a marathon.

Recommended reads:

Bitget Beginner's Guide — What Are Futures?

Bitget Beginner’s Guide — How to Avoid Liquidation