The Art of Swing Trading on the Binance Futures Market

Binance’s futures market has grown substantially in the past few months and it’s now second only to BitMEX in terms of volume traded. However, unlike BitMEX which offers perpetual contracts, Binance’s futures have expiry dates which traders must consider when trading on this platform. With careful consideration of supply and demand fundamentals and the use of stop-losses, swing trading futures on Binance can be very profitable. In fact, you can use futures to leverage your existing crypto holdings without actually buying more crypto! Let me show you how it works… Diversify Your Portfolio While many swing traders focus on finding and selling undervalued assets, others look for overvalued ones and buy them at a lower price. This strategy requires technical and fundamental analysis to determine which assets to trade. While this strategy can be profitable, it is not for everyone.  Using multiple asset classes and sectors is essential. Diversifying your portfolio is important if you want to achieve consistent, long-term trading success. It helps protect your capital, manage your risk, enables you to withstand market volatility, and realize gains from only a few positions. Although, it is very tempting to buy a single asset and hold it for a long period. Instead, you should diversify your portfolio to avoid losing a significant amount of money. Before you start swing trading on the Binance Futures Market, make sure you understand investing basics. While it might seem like a safe option, many risks are involved. Investing in a single asset, especially a volatile one, exposes you to high risk and can cause your entire portfolio to lose value in a day. Calculate Stop-Losses Swing traders often use the multiple-day high/low method, where they place their stop-losses at the high and low prices of a particular trading day. They may replace their lows at the two-day low as well. Based on larger trend analysis, indicator stops are also common, collectively with technical indicators. As a result, large blocks of stock may not respond well to stop-loss orders. In addition, brokers charge differently for different orders. To protect themselves from large losses, traders must use proper risk management strategies. The primary goal of margin trading is to minimize losses by implementing mechanisms to mitigate risk and survive market volatility. One of these mechanisms is stop-losses, which must be calculated and placed carefully. Generally, stop losses are set at two to three percent of the trade size. Some traders choose to set their stop losses below swing lows. The Fibonacci approach offers traders a systematic and objective way to set stops. This method eliminates subjective decisions. In addition, the Fibonacci levels are static once a trader draws them. It is a better-defined method, making it easier to spot potential stop-loss levels. The same principles apply to using stop-losses for other types of trading. Develop A Trading Strategy There are several important trading strategies to consider when trading on the Binance Futures Market. However, to achieve success, traders must understand the differences between these strategies and how they collaborate.  First, traders need to understand the types of orders available on the Binance Futures Market. There are Limit Orders, Market Orders, and Stop-Limit Orders. Limit orders are for setting a price that a trader is willing to pay for a specific asset. These orders can be long-term or short-term. For example, traders can set a price limit for their trades and then wait for the order to fulfill the price. To create a winning trading strategy, beginners need to understand the fees that come with Binance’s futures marketplace. The default level carries a 0.02% maker fee and a 0.04% taker fee. In addition, Binance users also need to keep a minimum amount of Binance Coin in their accounts and maintain a decent BTC turnover volume. However, once they’ve mastered these steps, it is time to make their trading strategy work on the Binance Futures Market. The Binance Futures Market offers a wide variety of contracts. There are Bitcoin Futures, Ethereum Futures, and Litecoin Futures. Among the most popular of these is the BTC/USD trading pair. This trading pair also features a quarterly futures contract. A futures contract is a legal contract between two parties, different from a traditional futures contract. Limitations Of Swing Trading There are numerous technical definitions of swing trading, but one thing is certain – you can make money doing it on the Binance Futures Market. Swing trading is different from intraday trading, where you only take positions every day, and the market’s volatility is low. You hold your positions for several days, weeks, or even years in swing trading. The risks of swing trading are low, but the time frame is longer than a day for traders. One of the advantages of swing trading on the Binance Futures market is its short expiration. … Continued

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