Why You Cannot Get Profit From The Crypto Futures Contract? Here Are The Reasons

Why You Cannot Get Profit From The Crypto Futures Contract? Here Are The Reasons

Crypto futures contract is a well-known derivative in the cryptocurrency trading market which helps traders to hedge or get the excess return. However, most people are losing while they are trading crypto futures contracts. Why? One of the reasons is because of the lack of trading techniques. The other reason is that some of the tricky exchanges have a lot of traps that obstruct you to win. This article is going to reveal the “traps” and help you select your own exchange.

What is the crypto futures contract? Why is important?

Crypto futures contract is derivative which traders can buy or sell the underlying asset at the predetermined price on a settled date in the future. Different from the crypto spot trading, the crypto futures contract has the following characteristics.

  1. Leverage, the crypto futures contract is usually along with leverage. It does not require traders to invest full of collateral as margin. For example, in BitMex or Bex500 exchange, Trader with leverage of up to 100x, they can invest 1 bitcoin as margin and hold 100 bitcoin valued contracts which allowing traders to trade with only a small amount of the asset and speculate on the future value of its products with bigger power.
  2. Bi-directional trade available, crypto futures contract allows traders to invest the rise or decline of the price to earn profit or hedging. For example, In Bitmex or Bex500 perpetual contract, trade can set long(buy) or short(sell) position, either the bitcoin price goes up or falls down, traders can get profit from the difference of price movement.

Crypto futures contract is the important implement of the crypto trading market, which gives traders the great tools to hedge the risk and earn massive profit from the market.

Why traders hardly earn profit from crypto futures products? The tricky exchange may be the main reason.

However, if you search the crypto futures contract in Google, there are some posts that warn you that stay away from the crypto futures because it is difficult to catch the profit. The reason why you cannot gain from the crypto futures contract may due to the lack of the trading technique. Crypto futures are the high-risk trading product, if you are not prepared, you may suffer great losses from it. Therefore, some exchanges, such as BitMex or Bex500 exchange launch the simulation mode to help traders to practice before they get into the “real fight”. Moreover, the other reason why traders may stick to the loss is because of the tricky exchanges. They usually lay following traps to increase the difficulties of trade.

  1. Intricacy and confusing rules

Some of the crypto exchanges are adept in using intricacy and confusing rules which increase the learning cost and risk to traders. In addition, some exchanges set the trick trading rules of the margin. Some exchanges have both cross margin mechanism and isolated margin mechanism in the same operating system. When traders open a position with a cross margin with high leverage, the total margin should maintain the position away from liquidation. However, later on, if the traders opened a position with an isolated margin, the trading rules regulate that all orders should switch to the isolated margin. The first order which trader placed is isolated from the total margin. In this situation, the order is easier to be liquidated. This kind of tricky rule tries to steal funds by liquidated the orders. Traders will suffer lots of untold costs from those tricky rules.

  1. Extremely hard-to-used operation system and complex interface

The intricate operation system from some exchanges gives a catastrophic trading environment to traders. There will be massive operation guide and bottom, unintelligent control of the limit or conditional orders. The complexity operate system and complicated interface can stand in the way of between you and the profits

What exchanges you should select to start your trade?

  1. Easy to use operating system and friendly interface

The accessible operation system and friendly interface helps traders to trade and react to the market easily. For example, Bex500 exchange has a clear interface and easy to use operating system. Traders’ funds status is concise and integrated in the trading window. Moreover, Bex500 provide Profit and loss calculation helps traders to control their risk form various market. Furthermore, Bex500 has an intelligent limit order widget which can automatically predict the trading tendency which trader only needs one move to set up a full stop loss or take profit order. All those designs are effective to save traders time and decrease the operate turnover.

  1. Clear rules.

Traders should stay away from the exchanges which have tricky and unclear rules. Bitmex has detailed and professional rules which are fair to all users but it may be a little complex to new traders. Bex500 may be the other good choice which the rules are clear and easy. It follows the cross margin mechanism which is not able to modify the leverage of the existed order which In addition, even though there are 40+ trading products in the Bex500 exchange, the rules are clear and settled on one page. Both mature traders and beginners can understand in a few minutes.

In conclusion, a good exchange with a concise interface and accessible rules makes the trade easier and effectively lower the risk which gives the profitable trading environment of the crypto futures contract market to all traders.

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