Futures
Future - future. A futures contract is a contract for a future price. It is one of the types of derivatives. This is not actual trading of an asset or commodity. This is a kind of bet on price changes.
In the futures market, you cannot withdraw commodities/assets specified in the futures contract. That is, you can deposit US dollars on the CME exchange, enter into a futures contract for the price of Bitcoin to rise (bet on growth), but you will not be able to withdraw the Bitcoins themselves. You can only withdraw US dollars. After you close this contract. Or the exchange will forcefully close your contract upon expiration of its term (futures expiration date).
Only futures and swaps are traded on the Bitmex.com exchange. There is no spot market there at all. Only Bitcoins can be entered and deposited. All accounting of commissions and bonuses is also carried out only in bitcoins.
Trading on the spot market
This option is suitable for both beginners and experienced traders. When purchasing an asset on the spot market, the participant physically owns the purchased assets.
Coming to the exchange, a trader buys the desired coin and keeps it in his account until he wants to sell it.
Remember the main rule: buy cheaper, sell more!
In this case, asset owners receive equal rights to participate in staking and vote for major forks.
To make a trade on the spot market, a trader must specify the desired purchase price and the required number of coins. Instead of the latter, you can write down the amount or share of the portfolio that you want to spend on the transaction. In this case, the number of coins will be set automatically by the system. Next you need to click the “Buy”
and wait for the order to be executed.
The same algorithm applies when selling coins.
The number of assets held can be viewed on the Binance exchange in the “Wallet”
.
Life hack: after making transactions, Satoshi coins may remain in your account. In the “Wallet” section, you can exchange them for BNB, which is not only a good investment in the long term, but also helps reduce the cost of fees by 25%.
CFD
Contract for difference. Here, too, bets are made on an increase or decrease in the price of an asset or commodity (or cryptocurrency). However, unlike futures, where two ordinary clients enter into a contract with each other, CFD is a contract against a company. That is, either the client or the company will receive a profit, and the other party will receive a loss. Or, as they like to say, “playing against the office.” Futures are traded not against the “office”, but against other ordinary clients of the exchange. At least officially. Because there are also “kitchens”.
How to top up a spot wallet
There are three deposit methods: cryptocurrency, fiat and peer-to-peer. All sections are located in the “ Buy Cryptocurrency ” drop-down menu.
Using a stablecoin
Stablecoins differ from standard crypto in that they are tied to a physical asset: fiat currency or valuable resources. As a rule, the rate of such tokens is more stable.
The control panel for your wallet (in the English version of wallet) and coins is located in the “ Wallet ” > “ Fiat and Spot ” menu:
The spot panel has three sections:
- Balance. Four values: total, fiat, cryptocurrency deposit and PNL (the difference between the wallet for yesterday and today, calculated by the formula).
- Fiat. Detailed statistics on the number of official currencies with their equivalent in Bitcoin.
- Crypt. Dashboard of purchased cryptocurrency.
The screenshot shows an example with Monero (XMR), the equivalent of the token for convenience is displayed by Binance in BTC. To deposit coins, click on the “ Enter ” button next to the trading pair:
Afterwards, a window will open with the address for transfer and instructions. Fill in the fields and confirm the withdrawal with an SMS code.
We top up with fiat
Crypto is purchased through fiat gateways (acquiring companies) Binance, Simplex or Mercuryo. In the interface of the exchange itself, you just need to enter and save the card once.
Receiving via P2P
This method is only available to verified Binance users.
P2P (short for Peer-To-Peer) is a direct market where traders directly exchange tokens without commission, for example, to withdraw Ethereum, Ripple or LiteCoin to a cash (USD or USDT) exchange you need to pay a commission, and exchangers will do it for free.
The only negative is fraud: the transaction can be interrupted by appropriating all the coins. For security, you need a guarantor; for Binance, this is the company itself. You can also identify scammers by negative reviews.
To withdraw directly to the card, I advise you to look for buyers on forums (the industry is well developed) or the crypto exchange itself:
What is Peer2Peer
The P2P market is only available after basic verification.
Kitchen
There is no generally accepted definition of what is considered cuisine and what is not. But it is believed that “kitchen” is a negative opinion about a company that is not honest with its customers.
Traditionally, any CFD is considered a “kitchen”. Simply because the company has the ability to deceive its customers. This does not mean that the company will deceive clients, has deceived or is deceiving - it just means it can. And it will be profitable for the company to do this. That is, the interests of clients stand against the interests of the company.
Choosing cryptocurrencies for trading
The starting capital can be any, but the higher the amount, the greater the profit. The most difficult thing about this strategy on the cryptocurrency exchange is the selection of assets.
As already mentioned, you need to choose tokens with a drawdown of up to 30%. It’s not difficult to find them; it’s easy to monitor drawdowns through different services and inside exchanges:
The technique is designed to quickly make a profit, so it makes sense to consider the drawdown in the next 24 hours.
Of the coins presented in the example, Vertcoin is ideal at the moment. As you can see, the price of this currency is now $8.5, but today it has decreased by almost 15%.
If you understand what the Bitcoin exchange rate depends on, you will understand why the price of other coins falls or rises.
You need to manually select at least 20-30 currencies, of which, at best, you will only conduct transactions on 5 tokens.
Why? Because not all coins will begin to gain in price. For some cryptocurrencies, the downward trend will continue; buying them is simply pointless.
What's worse?
CFDs and binary options (not to be confused with real options) are a bad idea anyway. Even if the company is very honest and really doesn’t intend to deceive anyone. The fact is that bets are placed against the office, and if clients suddenly win a large amount of money, then the office simply will not be able to pay out that much, since they simply do not have such an amount. In this case, the company will be forced to either declare bankruptcy (which means you lost money), or change the terms of the game or change the schedule retroactively (and they do this). That is, the honest intentions of the office are not a sufficient condition, since they may simply not have enough money for these honest intentions.
Example of a spot trade transaction
For most people, currency trading is of interest, so let’s look at an example in the context of foreign exchange transactions. Let's say we have a brokerage account and we want to make transactions. Then everything will depend on the direction of the operation:
- We want to buy dollars for rubles . To do this, you need to choose a contract that has the minimum cost. From the above it follows that this will be a TOD contract, moreover, it is the most popular contract, which is traded with fairly high turnover. And in general, for reference, the dollar pair makes up 90% of all ruble trading. Purchased dollars are sent to the details specified by the client. That's it, the trading operation is completed, dollars arrive on the same day.
- We want to sell dollars for rubles on the spot market . In this case, we should choose the opposite direction, that is, the longest possible contract. But it’s not always convenient there, so they usually settle on an intermediate option, that is, TOM. This is what you should use. The dollars sold will be returned in the form of rubles the very next day. And they can be transferred wherever needed, including to an existing brokerage account in rubles. However, only those days when the exchange is open are taken into account, so weekends and holidays must be taken into account.
In general, the system is quite simple and intuitive.
Here the question arises - why do we need exchangers if all operations can be carried out through the exchange.
The answer is quite simple - people are simply not interested in this and cannot imagine that the buying and selling rates may differ by pennies, and not by tens of pennies or even rubles. And this is beneficial for banks, which is why they have such services in order to earn extra money. Well, we can also say that people do not really trust the electronic spot market, but prefer traditional cash.
Bitmex.com - kitchen?
And this is where things get interesting. On the one hand, Bitmex.com offers a futures market, not CFDs. But this is only the official version. The exchange itself is not regulated. Therefore, theoretically, an ordinary client could enter into a futures contract against a “fake” client, which would actually be an account of the exchange itself. In this case, Bitmex.com could be called "Kitchen". However, there are no signs or incidents of such actions on the part of the exchange. Not only is there no evidence, but there are no incidents themselves—complaints. There is no going to court or anything like that.
Spot market
In principle, a spot market can be considered any market in which transactions are carried out within the period specified above. But taking into account the fact that now all global trading is carried out electronically on the corresponding exchange or over-the-counter markets, this type of contract has its own characteristics.
Let's look at the example of what is offered to trading participants on the Moscow Exchange:
- SPT is actually what is most often meant by spot. This is a normal transaction with delivery due in two days.
- TOM is a contract for which delivery will be made the next day. This follows from the name – TOM is short for English tomorrow.
- TOD - under this contract, delivery will be made today, also from the English today.
It is clear that prices differ; this is due to the fact that for each day an interest rate on the currency is added, which must be divided by an annual period. By the way, a currency swap, with which Forex traders are well familiar, is formed using approximately the same principle.
It turns out that the most profitable contract is TOD, all others are obtained with an increase. This is usually reflected in futures, but not so significantly compared to the impact the trend has, sometimes causing large-scale contangos and backwardation of tenths and even whole percentages.
Within the framework of stock trading, a situation arises in which the transaction itself is concluded on the spot section of the exchange today, but the specific shares are delivered two days later. This scheme is indicated as the delivery time T+2, which means an increase of two days. That is, in principle, everything remains the same as described, within the period, but there are no “faster” contracts. This is explained by the fact that when working with shares, even in spot transactions, it takes time to register the new owner of the share. Simply put, you need to enter data, because the register of shareholders is maintained strictly and within the framework of the regulations.
At the same time, another extremely popular market, Forex, is over-the-counter, so trading is carried out instantly, liquidity is maximum and allows you to make transactions of almost any scale and volume right here and now. The turnover of this kind of currency trading is more than 5 trillion dollars per day, while currency futures together give only hundreds of billions, that is, the turnover of the derivatives market is quite insignificant compared to the spot market.
But this only applies to Forex; on stocks, futures are traded as actively as possible, as well as on commodities.
What is a Spot Bitcoin ETF?
A typical spot Bitcoin ETF is one that tracks the price of real, physical Bitcoin. The core idea is to allow investors to gain exposure to BTC through a regulated and financially familiar product, without actually owning the underlying asset.
This offers some advantages, especially for investors who are not crypto savvy and coming from traditional finance. Some of them include:
- Bitcoin price exposure through a regulated product.
- Easy access
- There is no need to store Bitcoins.
- No need to manage private keys
- Possibility to reduce the price of Bitcoin.
This last point is important because spot investing does not allow users to bet that the price will go down. If there is an ETF, investors can short the ETF shares and benefit from the move down.
What should you pay attention to?
To begin with, several currencies are easily selected, then the selection from the list begins. Again, as an example, we will further consider Vertcoin.
You need to familiarize yourself with the complete data of the crypt using different services. The main ones are the forum. Both resources provide all the necessary data for verification:
Cryptocurrency capitalization
It makes no sense to invest in completely nameless tokens. Their rates may fall and never rise again, because no one is interested in coins. Therefore, first of all, you need to check how large the capitalization is.
It is desirable that it be at least more than 3-5 million dollars:
In our case, the capitalization is impressive, this indicates the stability of the crypt. In addition, pay attention to the drawdown and price. While we were writing the article, the rate had already risen by 10 cents, and the drawdown had decreased.
If we had bought the coins in advance, we could now sell them at a higher price. However, it will still rise during the day.
Course schedule
The next way to ensure that a cryptocurrency is suitable for applying a strategy is to evaluate the chart. It should be directed upward, and the drawdown should look like a temporary phenomenon.
Let's go back to the currency we chose as an example. Since May 2022, Vertcoin has been growing in price:
Most likely, today's drawdown of 15% is a temporary phenomenon. The exchange rate will recover and this will help you make money. If you see the opposite picture on the chart, i.e. the chart has gone down and there are also serious deviations from the corridor, it is better to refuse the deal.
Popularity of cryptocurrency
Investing in unknown currencies is too risky. Even if their rate increases, it may take too long. This is not suitable for our strategy for making money on cryptocurrency. Find useful information on the most famous BitcoinTalk forum.
Register and see what professionals write about the selected tokens.
Many topics are in English, because the forum is popular all over the world. This is not convenient, you have to use translators, but you simply won’t find the same large databases on the Internet.
Most importantly, find out what the cryptocurrency is based on and what it is used for. Due to this, it is possible to figure out whether it has a chance of rising in price.
Reliable cloud mining Eobot allows you to automatically earn different cryptocurrencies. And thanks to the daily bonus, you can start without investment.
At first everything is difficult, you have to spend a lot of time. But gradually you begin to remember which coins are suitable for transactions and without lengthy analyzes you start trading.
