KuCoin Futures Trading Tutorial 2022 (Full Step-by-Step Guide)
what's going on my name is simon and in this video i'll show you step by step how to trade futures on cue coin we're gonna be covering everything you need to know so after watching this video you'll be all set and ready to trade futures on cue coin if you don't already have a qcoin account feel free to use my qcon referral link down below in the video description by using that link you can get a signup bonus worth up to five hundred dollars as well as a 10 trading fee discount you'll find all the topics we're gonna cover down below in the timestamps so let's get right into the video first thing we're going to do is log in to our q coin account once logged in we're going to go to derivatives on the top menu here we have some different options futures classic futures lite and futures brawl if you're serious about trading futures then futures classic is what you're looking for future slide is just a simplified and very limited version of the future classic trading interface and futures brawl is basically a game that you can play against other qcon users betting on if a price will move up or down in this video we'll look at futures classic as this will give us all the features we need to trade futures so let's click on futures classic that will take us into the trading interface first thing i like to do here is change to the dark theme because it's a lot better for the eyes especially when you look at the trading screen for a very long time so we can come over here click on layout and change the theme in this video i'm not going to go in depth on what everything means on the screen as this is a futures trading tutorial i assume you've already done some trades in the spot market and you already know the basics if you are a complete beginner i recommend watching my beginner kucoin tutorial that you'll find down below in the video description overall the future trading interface looks kind of similar to the spot trading interface we have the price chart in the center we also have the order book the most recent trades and the window where we can place our orders now before we can trade futures we'll need to transfer some funds to our futures wallet to do that we're gonna go down to the bottom right to the assets window now if you don't already have some funds on your qcoin account you can simply click on buy crypto to transfer funds onto q coin in my case i already have funds in my q coin main wallet so all i need to do is transfer over those funds to my futures wallet so i'm gonna click on transfer almost all futures on cue coin are settled in the stablecoin us dollar tether that's why i'm gonna transfer over usdt into my futures wallet from my main q coin account and i'm gonna transfer over 100 usdt and now under available balance we can see 100 usdt that we can now use and trade with now we can choose the future contract that we want to trade over here we can find all the available future contracts but first let's go over what a future actually is a future is basically a contract saying that we will buy or sell a specific asset at a set price at a specific time in the future so for example when we are trading a bitcoin future we are not really buying or selling bitcoin itself like we would do in the spot market but we are entering a contract saying that we will buy or sell bitcoin in the future so for example when we go long on a bitcoin future contract we expect the price of bitcoin to go up so we enter a contract saying that we will buy bitcoin at a later date but at a price which is determined right now which is usually close to the current bitcoin price so let's say we go along on a future contract for one bitcoin at a price of 25 000 us dollars per bitcoin on the delivery date which is when the future contract expires we'll have to look at the bitcoin price to see if we actually made a profit or if we've lost money if at the delivery date bitcoin is trading at thirty thousand dollars per bitcoin we've made five thousand dollars in profit because we have locked in the price of twenty five thousand dollars per bitcoin when we entered the futures contract on the opposite side if at the expiry date bitcoin is trading only at twenty thousand dollars per bitcoin we have lost five thousand dollars unlike in the spot market future contracts also allow us to profit when assets are going down in value so for example if we expect the bitcoin price to fall we will go short on a future so let's say the current bitcoin price is 25 000 and we go short one bitcoin that means that we agreed to sell one bitcoin at five thousand dollars in the future if bitcoin actually falls to twenty thousand dollars until the delivery date will make a five thousand dollar profit and if bitcoin rises to thirty thousand dollars we lose five thousand dollars so when trading futures we are basically speculating if the price of an asset will go up or down in practice we don't actually need to wait until a future contract expires to get out of our position if we want to close our long position all we need to do is open a short position for the exact same amount and that will cancel out our long position getting us out of the trade the profit or loss is equivalent to the difference in price when we open the long position and when you open the short position and even though we might enter a future contract about buying or selling bitcoin or any other underlying asset in practice we don't actually need to buy or sell the asset itself instead we can just use any available asset as collateral also called margin to fund our trade and pay up when we close our positions on cue coin we have usdt amp futures and coin amp futures usdtm stands for us dollar tether margin futures which means that these futures are settled in the us dollar stablecoin usdt so we need to have usdt on balance to trade these futures coin m stands for coin margin futures and means that these futures are settled in coins so we would need bitcoin ethereum polka dot or ripple to trade these futures most people trade usdtm futures because it does make sense to use a stablecoin as margin rather than an asset like bitcoin or ethereum which fluctuates in price a lot also there's a lot more contracts to choose from in the usdtm future market so let's look for a bitcoin future contract by typing in btc here we can see that we have two perpetual future contracts and one quarterly future contract the quarterly future is the one that has a delivery date or expiry date which is the date when our position would be automatically closed so here it would be september 30th the two first digits are the month and the last two digits are the day of when this future will expire the perpetual futures on the other hand don't have a delivery date meaning they will never expire and we can stay in our position until we manually close them so we don't need to worry about our future expiring on cue coin almost all future contracts are perpetual contracts so let's go ahead and choose the usd tm perpetual future contract for bitcoin then here we can see the price that this future is currently trading at which is the same price we can also find here in the order book or here at the top for the most recent trades usually the future price is very close to the current price of the underlying asset which in this case is bitcoin then what's special for the futures market is that we also have a mark price and an index price the index price is the average bitcoin price across multiple different exchanges also outside of q coin the mark price is then calculated from the index price and the funding basis which we're going to look at in a moment q coin uses the mark price as a basis for liquidations liquidation basically means that kucoin will automatically close our position whenever the price moves too far against us the reason why cue coin doesn't use the actual last price to determine when a position should be liquidated is to avoid unnecessary liquidations whenever the market is highly volatile or is being manipulated so the mark price represents a more fair price to determine when a position needs to be liquidated then we have the funding rate this is specific to perpetual future contracts because these contracts don't have a delivery date to settle the contracts exchanges use funding rates to ensure that future prices and index prices don't move too far away from each other this is achieved by having traders with a long position pay traders with a short position or the other way around depending on if the funding rate is positive or negative when the funding rate is positive the price of the future contract is usually higher than the index price in this case traders who are long pay for short positions when the funding rate is negative then the short positions pay for long positions on cue coin that happens every eight hours so three times a day and here we can see a countdown of when the next funding will take place so let's say trader a is currently in a long position worth 10 000 usdt and the funding rate is plus 0.01 percent when the countdown hits zero in this case the funding for trader a is 0.01 percent of 10 000 usdt so one usdt this funding of one usdt will then be paid from trader a to trader b who holds a short position worth 10 000 usdt when the funding rate is minus 0.01 then trader b would have to pay one usdt to trader a however if we close our position before the funding settlement countdown hits zero then we are not participating in this funding settlement now let's look at leverage leverage trading is one of the main reasons why people want to trade futures in the first place using leverage simply means we are able to exaggerate our profits but also our losses here we can adjust the leverage for our trades it goes from 1x all the way up to 100x which is insanely high so for example let's say we choose a 10x leverage and the bitcoin future is currently at 20 000 per bitcoin with a 10x leverage we're able to buy approximately 10 times more than the amount we have in our futures wallet so if we wanna buy a future of one bitcoin it will only cost us around two thousand dollars so a tenth of the actual price if we go totally crazy and choose a 100x leverage we would only need to pay 200 for a future of one bitcoin if then our bitcoin future goes up just one percent we have already doubled our 200 investment so you can see why using a high amount of leverage can seem quite attractive however on the other side if bitcoin goes down just 0.5 percent we would get
liquidated and lose our entire 200 investment so at that point even if the future goes back up we are already liquidated and we can't make any profit from an increase in price so as you can see using high leverage can make a lot of profits fast but will also wipe us out clean very very quickly especially in a volatile crypto market so now we know all the basics and we are ready to place our first order in the futures market again over here we're going to choose the future contract that we want to trade i'm going to choose the bitcoin usor tether perpetual future contract now here on the right side is where we can place our order we can choose between a limit and a stop limit order for now we're going to stick with limit and later in the video i'll also show you how a stop limit order works when we click on this bolt icon this is essentially going to make this a market order meaning that it will just take the best available price in the order book and open our position immediately so let's just do that for now then i'm gonna choose a 5x leverage which means i'm able to open a position worth about five times my margin balance which currently is 100 usdt here we can either enter an amount of how much in bitcoin futures we'd like to buy or we can just select a percentage of our margin balance to invest so let's go ahead and choose 50 down here we can also see how much we will be investing for this position because we have a 5x leverage the size of the position will be around 5 times our investment and then let's say we believe that the bitcoin price will increase so we're gonna click on buy long then we're gonna have to confirm our order because it's a market order it has been filled immediately and we can see it down here under positions the contract name appears in a green color which means that this is a long position next to the contract we can see our position size the current value of our position and our entry price here we can see the allocated margin for this position this represents how much we have invested into this position and how much we could potentially lose if the price moves in the wrong direction then here we have the mark price and the liquidation price if the mark price reaches the liquidation price then liquidation will be triggered the more leverage we use for our trades the quicker we will reach the liquidation price which essentially means more risk however we can always add margin to our positions and thereby reduce our leverage we can simply click here and allocate more funds to this position as we can see this will lower our leverage and decrease the liquidation price for our long position we can also automate adding margin to our position by turning on the auto deposit margin feature when this is turned on and our position is getting close to the liquidation price then kucon will continually add margin from our available balance to this position to avoid liquidation so using this feature can lower the chances of getting liquidated however it can also lead to losing our entire available balance in the futures wallet if eventually our wallet balance hits zero and we do get liquidated so definitely be careful when using the auto deposit feature the unrealized p l profit and loss shows us how much we would profit or lose if we were to close this position right now then we also have the realized p l this shows us exactly how much we have profited or lost selling a percentage of our position as well as the fees involved with opening holding and closing this position if we want to get out of the trade and close our position there are a few ways how we can do that the quickest way is to simply click on market choose 100 and then click on confirm and that will close our position immediately at the best available price or we can click on limit and set our target sell price then once we click on confirm we can see our limit sell order under open orders right here once the price hits our target price our position will be automatically closed of course we can also cancel any of our orders by just clicking on cancel another way to close our long position would be to simply place a short position for the exact same amount so we can come over here and enter the size of our open long position but now we will go short so we click on cell short and that will cancel out our long position and get us out of the trade if we don't want to close our entire position we could also just reduce it so let's say we want to reduce our position by fifty percent we can just click on market choose how much of our position we want to sell in my case fifty percent and then click on confirm if you want to reduce our position at a specific price we can click on limit and type in the price right here and when we confirm we have a new sell order of 50 of our position at our target price if we want to increase our position we'll have to do that up here so let's say we want to double our current long position what we're going to do is look at the current value of our position and enter that amount right here for the next order then we simply click on buy long and that will add that amount to our current long position let's do another example but now we're gonna go short bitcoin so we believe that the bitcoin price is going to decrease i'm going to do another market order so i'm going to click on this bolt icon and i'm going to use the slider to set a 3x leverage then i'm going to invest 50 of my balance into this position and i click on cell short under our open position we can now see that the contract name appears in a red color which means that this is a short position we also see that the liquidation price is above the current bitcoin price which makes sense because we are going short and we want the price of bitcoin to go down however when the price instead moves in the other direction we're losing money on this trade and if the price goes all the way up to the liquidation price we will get liquidated in order to manage our risk we can also set a take profit and or stop loss for each position all we have to do is click on this edit icon under take profit and stop loss and then here we can set our take profit price which means that when this price is reached then the position will be closed to lock in our profit for the stop loss we can do the same thing just set a target price where we want our position to be closed at to limit our losses when we click on confirm we can see our take profit and stop loss prices here we can also already set our take profit and or stop loss before we open a new position we would just have to activate the tpsl function which stands for take profit and stop loss for long positions we take tpsl of long and for short positions tpsl of short and then we just enter our take profit and stop loss before submitting the order until now we've only been using market orders but of course we can also do limit orders as well we just need to make sure that the bolt icon is deactivated so we can set our entry price here we put in the order by going long or short and it will be visible right here in the open orders tab it will stay here until the future price reaches our entry price which is when it will automatically open our position at that specific price then we also have the stop limit order with a stop limit order we're able to set a price range for wherever we'd like to open our position so for example we can tell the system that we want to go long when the bitcoin future price goes up to 22 000 and we are willing to buy in at any price between 22 000 and 23 000 using this type of order makes sense whenever the market is very volatile because then we're basically giving the system a price range where it's allowed to open our position in if we just use a normal limit order the system is only allowed to trade at our specific entry price but with a stop limit order the system is allowed to take the best price within the price range we have set and when we click on this bolt icon we make this a stop market order in this case we are telling the system at what price the market order should be triggered so as soon as our stock price is reached our market order will be fulfilled at the currently best available price by now you've probably also noticed the reduce only option right here whenever we activate reduce only the system will only allow us to reduce our current position so for example let's say we have an open long position for bitcoin now when reduce only is activated the system will not allow us to increase our long position because as the name says it's reduce only we also cannot put in a cell order that is larger than our current long position because that would mean that our long position would not only be cancelled out but it would also change into a short position which isn't allowed with reduce only activated so again like the name says whenever reduce only is ticked we can only make our position smaller or cancel it out altogether so basically it's just a safety feature to make sure we don't make any mistakes when wanting to reduce our position whenever you want to turn on or off specific features just head over to the preferences right here and then make those adjustments if this video was helpful to you please make sure to go long on the like button below this video because i can assure you it can only go up from here and make sure to use the link down below in the video description for a sign up bonus of up to five hundred dollars as well as a ten percent trading fee discount when creating your qcoin account
2022-09-07 02:34
