In the cryptocurrency market, the concept of what is future is a matter of concern for many investors. Futures trading in the Crypto market is no longer strange to investors. However, not everyone knows how to understand the concept and how futures work in detail. Today, let’s join Learn Crypto Trading to learn more about this futures contract trading method.

What is the basic concept of the future?

Today, futures trading not only applies to traditional coins but also to Altcoins. Futures trading allows investors to manage risk in the market.

Learn about future coin trading in Crypto

Future coin trading in Crypto has attracted many investors since Crypto began to develop. Trading futures contracts with underlying coins. For example, BTC futures contracts and ETH futures contracts. These contracts involve an agreement to buy and sell coins at a certain price. Today, the number of investors choosing to trade future coins is increasing. This has made the Crypto market grow and has many new opportunities.

What is the basic information about the future?

What is the basic concept of the future? This is a form of contract agreed upon by both buyers and sellers. This contract is for a fixed asset that has been pre-valued at a specified date. In the Crypto market, these agreements allow investors to trade futures contracts. 

Futures contracts are designed to prevent risks related to price fluctuations. Investors can settle future coin transactions in two ways: settlement with assets or cash. Asset settlement requires the investor to hand over actual assets. If settling in cash, the money position will be transferred to the account.

What components does Trade Coin Future include?

Future coin trading will include 4 main components: underlying asset, settlement process, contract size, and expiration date. Take a simple example of ETH futures. Contract sizes must be standardized. With ETH futures contracts, it will correspond to 5 ETH. By trading ETH futures. Investors can completely rely on the future price of ETH without having to own actual assets.

See more: Knowledge you need to know about Coin trading

Types of future coin transactions on the Crypto market

Currently, in the Crypto market, there are two main types of future coin transactions. Including settlement in cash and settlement in real assets.

What is futures real asset trading?

Trading future coins using real asset contracts requires the investor to deliver physical Crypto upon contract expiration. At the contract’s expiration date, investors will receive actual Crypto instead of cash. However, this process requires investors to buy actual Crypto at a certain price beforehand. This method requires Crypto to settle by delivering physical assets. This property must belong to the person making the contract.

What is futures cash trading?

Besides settling contracts with real assets, investors can also settle in cash. Cash contract settlement involves exchanging cash equivalent to the value of the Crypto at the time of contract expiration. This means that both the buying and selling parties transfer cash based on the current price of the Crypto. The price of Crypto will be calculated according to the settlement time of the futures contract. 

Unlike other contracts settled with real assets. Cash-settled futures contracts will allow investors to speculate on the future price of Crypto. Even investors who do not own Crypto can still speculate.

What is a technical analysis of future coin trading?

Technical analysis when trading futures is necessary and important. In the process of researching, an overview of basic factors and market factors. Drawing conclusions based on the index will help investors know which trend the market is in. At this time, if investors use technical analysis, there is no basis for making a trading strategy. There is a very high chance that there will be a risk of loss.

That’s why using the index accurately predicts the market trend. However, without incorporating technical analysis, investors can still make wrong predictions on the market. Using technical analysis to trade coins in the future will help investors find more reasonable entry points. Besides, to be able to take full advantage of the trading sessions. Technical analysis of futures contracts is even more important. They will help investors closely monitor price fluctuations.

Technical analysis of coin trading using Elliott waves

What are Elliott waves? Elliott Wave is a technical analysis method based on price patterns during trading sessions. These statistics are entirely based on observation and analysis of historical data in Crypto. Elliott’s wave theory concludes that the market has a cyclical repeating wave pattern. 

The Elliott wave principle is related to the behavior of investment groups and shifting psychology. Elliott Wave will include 11 wave patterns along with specific names and chart patterns. Elliott Wave helps investors identify cycles and predict market trends when trading futures.

See more: Open a Bybit account: Explore the world of Crypto

Should we replace basic trade coins with altcoins?

Altcoin is a combination of “Alt” and “coin”, which is an alternative currency. Up to now, the two largest Altcoins in the Crypto market are Ethereum and Ripple. Currently, there are two official Altcoin groups: Stablecoin and Digital Tokens. Replacing basic coins with Altcoins is completely unnecessary. Traditional coins have been around for a long time and are completely irreplaceable. The appearance of Altcoins helps investors have more choices when trading. When trading futures contracts, investors can also choose Altcoins. 

Conclude

Above is the answer to the question “What is the future? ” that Learn Crypto Trading wants to send to readers. Futures contract trading brings countless benefits to investors. The important thing when trading futures contracts is to clearly understand the types of contracts and come up with a reasonable trading strategy. By regularly updating news information, investors can gain a lot of investment experience. Don’t forget to follow Trading Crypto to get more news.

FAQs

Is trading futures contracts on the Crypto market profitable?

Futures trading will bring profits to investors. However, there are also risks in investing

What is the main purpose of futures contracts?

Futures contracts help investors mitigate risks. They also allow investors to manage price fluctuations in the market.

What are the benefits of futures trading?

Trading futures contracts helps investors determine price trends and increase market liquidity.