How to play AscendEX contracts

Through AscendEX's suite of contract trading products, traders can speculate on cryptocurrency price fluctuations without owning the underlying asset, enabling them to potentially profit from market movements.

Nov 24, 2024 at 05:56 am

How to Play AscendEX Contracts: A Comprehensive Guide

AscendEX, a leading global digital asset financial platform, offers a robust suite of contract trading products for both experienced and novice traders. This guide will delve into the intricacies of playing AscendEX contracts, providing step-by-step instructions and comprehensive insights to empower traders in navigating the complex world of contract trading.

1. Understanding Contract Basics

Contracts, also known as futures or perpetual contracts, are financial instruments that allow traders to speculate on the future price movements of cryptocurrencies. Unlike spot trading, where you buy or sell an asset outright, contract trading involves taking a position on the price direction without actually owning the underlying asset. This enables traders to profit from price fluctuations without needing to hold the physical asset.

2. Choosing a Contract

AscendEX offers a wide range of contract products based on different cryptocurrencies, including Bitcoin, Ethereum, Litecoin, and Ripple. Each contract has its own unique specifications, including the underlying asset, leverage, margin requirements, and expiration date. Traders should carefully consider these factors when selecting a contract that aligns with their trading strategy.

3. Funding Your Account

Before initiating any trades, traders must fund their AscendEX account with sufficient funds to cover the initial margin requirement for their intended contract position. Margin refers to the amount of capital required to open and maintain a contract position. Traders can deposit funds into their account using a variety of methods, including bank wire, credit card, or cryptocurrency transfers.

4. Placing an Order

To place an order on AscendEX, traders navigate to the 'Contracts' tab and select the desired contract. They can then specify the order type, order quantity, and leverage. The order type determines the specific parameters for executing the trade, while the leverage amplifies the potential return (and risk) by multiplying the trading capital.

5. Monitoring Your Position

Once an order is placed, traders should closely monitor their position's performance. AscendEX provides real-time market data and interactive charting tools to enable traders to track price movements and manage their risk. Traders can also set stop-loss and take-profit orders to protect their capital and secure profits.

6. Managing Risk

Risk management is crucial in contract trading. Traders should employ disciplined risk management strategies to minimize losses and preserve capital. This involves setting realistic profit targets, using stop-loss orders to limit downside risk, and diversifying trades across multiple contracts.

7. Closing a Contract

Contracts can be closed at any time before their expiration date by placing an opposite order. For example, if a trader has opened a long position, they can close it by placing a short position of the same size. Closing a contract realizes the profit or loss based on the difference between the entry and exit prices.

8. Understanding Leverage and Margin

Leverage is a tool that allows traders to amplify their potential returns. However, it comes with increased risk as losses are also multiplied. AscendEX offers a range of leverage options, and traders should carefully consider their risk tolerance and trading experience when selecting the appropriate leverage for their trades.