Which BitMart contract or leverage is suitable for beginners?

For novice traders starting with BitMart, USDT-Margined Perpetual Contracts with low leverage (10x or below) or Coin-Margined Perpetual Contracts with isolated leverage (5x-10x) offer a conservative approach to minimize risk.

Dec 02, 2024 at 01:32 am

Which BitMart Contract or Leverage is Suitable for Beginners?

Introduction

BitMart, a leading cryptocurrency exchange, offers a range of contract and leverage trading options for its users. However, navigating these options can be daunting for beginners. This comprehensive guide will delve into the different types of BitMart contracts and leverage, providing insights into their suitability for novice traders.

Types of BitMart Contracts

• USDT-Margined Perpetual Contracts:

  • Traded in USDT, pegged to the US dollar, minimizing price fluctuations.
  • Suitable for traders familiar with perpetual contract trading.
  • Higher leverage limits (up to 100x) compared to Spot.

• Coin-Margined Perpetual Contracts:

  • Traded in the underlying asset's quote currency (e.g., BTC-USDT).
  • Potentially higher profits and lower maintenance margins.
  • Riskier due to fluctuations in the underlying asset's price.

• Quarterly Futures Contracts:

  • Traded with a specific expiration date (e.g., BTCUSD-0930).
  • Designed for long-term price speculation.
  • Lower leverage limits (up to 20x) compared to perpetual contracts.

Types of Leverage in BitMart

• Cross Leverage:

  • Allows traders to share their account balance as collateral for multiple positions.
  • Increases the total leverage available, but also amplifies potential losses.

• Isolated Leverage:

  • Limits leverage to a specific position, preventing collateral sharing.
  • Reduces portfolio risk, but also limits potential profits.

Suitable BitMart Contracts and Leverage for Beginners

For beginners, it is crucial to start with a conservative approach to trading. Here are the recommended options:

1. USDT-Margined Perpetual Contracts with Low Leverage:

   • USDT-Margined contracts offer the stability of a stablecoin as the collateral.
   • Leverage of 10x or below is suitable for reducing risk and minimizing potential losses.
   • This option allows beginners to familiarize themselves with contract trading while limiting downside exposure.

2. Coin-Margined Perpetual Contracts with Isolated Leverage:

   • Coin-Margined contracts offer potential profits, but come with higher risk.
   • Isolating leverage limits the risk to a specific position, making it a manageable option for beginners.
   • Start with low leverage (5x-10x) to minimize price exposure.

Tips for Beginners

• Start with a small trading amount to avoid significant losses.
• Do thorough research and understand the underlying assets being traded.
• Manage risk by using stop-loss orders and prudent leverage.
• Avoid over-leveraging, which can lead to significant losses.
• Consider demo trading before using real funds, to gain practical experience.

Conclusion

When selecting a suitable BitMart contract or leverage, beginners should prioritize low-risk options, such as USDT-Margined Perpetual Contracts with low leverage or Coin-Margined Perpetual Contracts with isolated leverage. By understanding the different types of contracts and leverage, beginners can navigate the BitMart trading platform with confidence and mitigate potential risks.