Crypto Trading : Why Futures Might Wreck Your Finances

Over time, the way crypto is traded has changed in a lot of ways. What was once restricted to spot trading has expanded to cover other types of trade. One of which is futures contract.

Futures trading was first offered In the latter part of 2017. Since then it has gone on to be a regular features on various exchanges.

As stated earlier, there was just spot trading available before the advent of futures trading. It came and opened up more Opportunities in trading the cryptocurrency market. The market could now be more fully utilized by traders. One can profit from the the market irrespective of prevailing market conditions.

As opposed to standard spot market, one could now benefit whether the market was bullish or bearish. This changed the game for a lot of cryptocurrency traders. It becomes even more alluring when you take into account the possibility of increasing your returns to unprecedented levels.

Nevertheless, Contrary to expectations, if one were to sample opinions, one would find that a lot of individuals are quite terrified trading futures, In spite of the enormous advantages if offers. A lot of people have really burned their fingers trading this market. Which is quite understandable .

Futures trading is a very high-risk method of trading,especially if you are newbie .

Funny enough, it's one of the easiest and quickest way to profit from the market for experienced traders.

As already said, one major benefit and a core reason why so many people choose futures, is the opportunity it offers in any market condition . With futures, you can make money whether the price is rising or falling. You have the choice to go long or short on the market, depending on your expectations.

Another possibility is ability to employ leverage to increase the returns on your trades. Through the use of high leverage, I have read about and observed individuals who were able to gain over a hundred times their initial investment, in the shortest amount of time. But doing so carries a great risk.

The possibility of losing it all, which occurs frequently, especially for novice traders, is a significant drawback. I've also witnessed instances where folks go from 100 to 0 in a flash . In futures, The likelihood of losing your money is very high.

People frequently overlook, perhaps ignorantly, the truth that leverage is a killer and actually a two-way road. The value of a possible gain is equal to the value of a prospective loss. In actual reality , I will gain or lose 20 times on a trade if I use 20x leverage. Most people only approach this market with thoughts of winning alone.

The thing is, I don't necessarily need to employ all the leverage available to me, truly makes no sense. Especially as a novice.

In addition, most individuals see trading, especially in futures, or even spot, as a get rich quick thing. Sadly, they get to realise it is not what they think. They end up blowing up their money.

Yes, a lot of people becomes successful taking this high risks. But statistics shows more people lose their savings than they win them.

Trading takes time and patience, whether it be in futures, spot, or forex. Above all, effective risk management is highly important and a fundamental tool for successful traders.

Greed is a killer, and it doesn't always lead to success.