How to Bitcoin Futures with @actualadvicebtc
So apparently there are a bunch of casual traders that want to get into the futures game but have a fuzzy understanding of how it actually works. This super brief guide will cover the main places to trade bitcoin futures at the moment, okcoin.com
Okcoin's website is much cleaner than before but people say its oddly counter-intuitive to use. To be frank im pretty impressed that they manage to have much documentation and explanations that seem make it more complicated than it is.
Getting Set Up
1. Go make an account with this promo code: https://www.okcoin.com/?invid=2011818
2. Once you get through the onerous verification hoops, click account -> deposit -> btc deposit or this link: https://www.okcoin.com/account/rechargeBtc.do?symbol=0
3. Click trade -> btc futures -> fund (its that tiny orange button labeled 1 below)
4. Move money from your main trading account to futures. Leverage ranges from 10x to 20x (dont ever go 20x, and if you do, don't blame me).
5. Click on Settings. Choose USD, contracts and generally fixed margin, unless you are more experienced.
6. Click "Charts" and pick the futures market you want to trade.
Ok great, locked and loaded, lets get into some details now.
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What are futures? Well, it get complicated if you're trading wheat futures. But as far as crypto currency trading is concerned, its the same as a normal exchange trade except that all positions are closed against an index price at 8am UTC every Friday on weekly contracts at the index price, which is just a weighted average of the prices on major exchanges.
THIS IS NOT ALWAYS THE SAME PRICE AS WHAT THE FUTURES MARKET IS TRADING FOR!
As you can see, there are 3 (previously 4) futures markets offered. Generally you want to stick only to "Weekly" and "Quarterly" since they have the highest volume. Personally, I almost always trade the quarterly contract.
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What Am Looking at?
1. Go to https://www.okcoin.com/future/market.do?symbol=0 (for Weekly contracts)
2. I mentioned that I put the settings to display USD, Cont and fixed margin mode, and refresh time to 1s. I think 99% of traders should follow these settings. Why? Because its super simple this way. Each contract is 100 dollars, when you see a contract you know the order size is times 100. However, once you start getting the hang of things, CNY might be more useful to follow because of the influence of Chinese exchanges and the finer units.
3. This is the trading interface in the chart page. Lets go over it.
Entering an Order: you enter your price and amount in the top row. You can also click individual orders under order information to have it filled out automatically. You can choose your leverage (10x or 20x, but 20x only works in fixed margin).
The Order: your order is only displayed for whichever contract period you're looking at. They all have a code name in this format: [Currency][month of expiry][day of expiry][leverage amount]. So the contract shown is a Bitcoin long at 20x margin that will expire on the 26th of December.
- UPL estimates how much you are gaining or losing if you close your position right at the market price with no slippage. Likewise, the UPLR is the percentage change. Remember, at 10x the UPLR is 10x the %change in price and etc. for 20x. E.g. if price goes from 1000 to 1010 on 20x leverage, you just made 20%.
- Margin Call is the price where ur order will get forced closed and uou basically lose everything. This is why they have stop losses, which I will go over in a bit.
- Closing unlike bitfinex, you can't cancel out a long with a short and vice versa. So when you close your position you have to enter the price and amount in the order row. Close at market closes your position at any available price.
- Pending/Unfilled Orders once you enter an order or a close, it shows up on the right bar under "unfilled orders". You can cancel these, or watched as they go from "partial fill" to fully cleared.
Grouping: You look at the order information below and decide on an entry/exit. If you are trading large amount of contracts ( >500) its probably better to group the orders. Grouping the orders helps you see past icebergs (when someone wants to put in a large order but splits them into smaller ones around the same price level).
4. Stoploss - are super important! I'M DEAD SERIOUS!!!! 10x or 20x profits sounds lucrative, but you could be wrecked by a 5% pullback even when the trend is going your way!! Some people have this mentality where they avoid stop losses because of stop hunts. This is a different story for 3.3x at finex than it is in 20x. For 10-20x you definitely want a stop loss. At least you can recover from a 50% loss over time, but getting wiped out is GAME OVER.
So that is pretty much the basics of trading BTC futures on Okcoins. If i missed anything or if you have problems, please tweet me @actualadvicebtc on twitter (Promise I won't bite ;P )
5. Adding Margin - Remember how we chosed fixed margin instead of cross margin? Cross margin means that you can use ur unrealized profits to open new trades, but the risk is that your entire futures balance is in play. Since we are in fixed margin, you position is limited to losing the collateral you put in. If you think the price is going to fall below your margin call before bouncing, or you just want to add more buffer for your position, you can add more margin here:
Honestly though, in my experience if you are that close to getting liquidated, you might as well concede a loss and live to die another day instead of throwing more money at it. However, there are some special circumstance where this might be useful.
Other Things to Check Out
Index stats: If you go here:
You get these sweet statistics on what the top 100 traders are doing. The top graph just shows how many of them are long vs. short. Each trader is basically 1%, so you could read the above as 53% of top traders are long. The graph below shows how much margin is used, as per the description.
Also, make sure you get okcoin's sweet app for iOS and Android! It really is the best (only) exchange app out there!
