How to operate CoinEx contract

Trading contracts on CoinEx offers high leverage, enabling traders to amplify potential profits but also elevating the risk of significant losses due to price volatility and market manipulation.

Nov 27, 2024 at 05:52 am

How to Operate CoinEx Contract

CoinEx contract trading offers a range of benefits, including high leverage, the ability to trade long or short, and the opportunity to profit from both rising and falling markets. However, it's important to approach contract trading with caution, as it also carries a high level of risk.

1. Understand the Basics of Contract Trading

Before you start trading contracts on CoinEx, it's important to understand the basics of how they work. Contracts are derivative products that allow you to speculate on the price of an underlying asset without actually owning it. This means that you can make a profit if the price of the asset moves in the direction you predicted, but you can also lose money if the price moves in the opposite direction.

2. Choose a Trading Pair

The first step to trading contracts on CoinEx is to choose a trading pair. A trading pair is simply a pair of assets that you are trading against each other. For example, you might choose to trade the BTC/USDT pair, which means that you are trading Bitcoin against Tether.

3. Margin Allocation

Setting the margin is one of the most critical steps to contract trading. The margin is the amount of collateral you will need to deposit in order to trade a contract. The higher the margin, the more leverage you will have. However, it's important to note that higher leverage also means higher risk.

4. Place an Order

Once you have chosen a trading pair and set your margin, you can place an order. There are two types of orders that you can place: limit orders and market orders. A limit order is an order to buy or sell a contract at a specified price. A market order is an order to buy or sell a contract at the current market price.

5. Monitor the Position

Once you have placed an order, you need to monitor the position closely. The price of the underlying asset can move quickly, and you may need to adjust your position or close it out entirely to avoid losses.

6. Settlement

The settlement is the process of closing out the contract at the end of the trading period. The settlement price is equal to the spot price of the underlying asset at the time of settlement. If the price of the asset has moved in your favor, you will receive a profit.

7. Margin Recovery

On a leverage contract, the order won’t be suspended simply due to reaching liquidation price, your position will be closed first.

8. Lossless Mode

If it’s really stressful to manage the position timely, you can choose to switch to Lossless Mode, which will get rid of the potential liquidation risk fully. When the position profit reaches the earnings of lossless mechanism fee, the corresponding portion of the position will be converted into lossless mode; when the market turns favorable, the lossless position will be released and changed back to normal position.

FAQs

What are the benefits of trading contracts on CoinEx?

There are a number of benefits to trading contracts on CoinEx, including:

• High leverage: Contracts allow you to trade with high leverage, which can amplify your profits.
• Ability to trade long or short: Contracts allow you to trade long or short, which means that you can profit from both rising and falling markets.
• Opportunity to hedge your risk: Contracts can be used to hedge your risk against other investments.

What are the risks of trading contracts on CoinEx?

There are also a number of risks associated with trading contracts on CoinEx, including:

• High leverage: High leverage can also amplify your losses.
• Price volatility: The price of underlying assets can move quickly, which can lead to losses.
• Market manipulation: The contract market is subject to manipulation, which can lead to losses.

How can I avoid the risks of trading contracts on CoinEx?

There are a number of things you can do to avoid the risks of trading contracts on CoinEx, including:

• Understand the basics of contract trading before you start trading.
• Only trade with money that you can afford to lose.
• Use stop-loss orders to limit your losses.
• Monitor your positions closely.