How to trade perpetual contracts in Deepcoin

Perpetual contracts, offered on Deepcoin, provide perpetual exposure and liquidity for traders seeking versatile trading instruments.

Nov 30, 2024 at 09:41 am

How to Trade Perpetual Contracts in Deepcoin

Perpetual contracts are a versatile trading instrument that offer several advantages over traditional futures contracts. They are perpetual, meaning they do not have an expiry date, and they are traded on a centralized exchange, which provides liquidity and security.

Step 1: Create a Deepcoin Account

To trade perpetual contracts on Deepcoin, you will need to create an account. The account creation process is simple and takes only a few minutes. You can sign up on Deepcoin's website or through the mobile app.

Step 2: Deposit Funds

Once you have created an account, you will need to deposit funds into it. Deepcoin supports a variety of deposit methods, including bank transfer, credit card, and cryptocurrency.

Step 3: Choose a Perpetual Contract

Deepcoin offers a variety of perpetual contracts, including Bitcoin, Ethereum, and Litecoin. Each contract has a different underlying asset, leverage ratio, and funding rate. You can choose the contract that best suits your trading needs.

Step 4: Place an Order

Once you have chosen a perpetual contract, you can place an order. Deepcoin supports a variety of order types, including market orders, limit orders, and stop orders. You can also choose the leverage ratio for your order.

Step 5: Monitor Your Position

Once you have placed an order, you can monitor your position in the "Positions" tab. You can see the current price of the contract, your profit/loss, and your margin. You can also close your position at any time by clicking the "Close Position" button.

Trading Strategies for Perpetual Contracts

There are a variety of trading strategies that you can use to trade perpetual contracts. Some of the most popular strategies include:

• Scalping: Scalping is a short-term trading strategy that involves taking small profits on frequent trades. Scalpers typically use high leverage and trade on short timeframes.
• Day trading: Day trading is a trading strategy that involves entering and exiting trades within the same trading day. Day traders typically use a combination of technical analysis and fundamental analysis to identify trading opportunities.
• Swing trading: Swing trading is a trading strategy that involves holding trades for a few days or weeks. Swing traders typically use technical analysis to identify trading opportunities.
• Position trading: Position trading is a trading strategy that involves holding trades for a long period of time. Position traders typically use fundamental analysis to identify trading opportunities.

Tips for Trading Perpetual Contracts

Here are a few tips for trading perpetual contracts:

• Use a stop loss order to limit your risk.
• Don't trade with more leverage than you can afford to lose.
• Be aware of the funding rate.
• Monitor your position regularly.
• Don't overtrade.

Understanding the Funding Rate

The funding rate is a fee that is paid by traders who are holding a long position to traders who are holding a short position. The funding rate is designed to keep the price of the perpetual contract in line with the spot price of the underlying asset.

The funding rate is calculated every 8 hours. The amount of the funding rate is determined by the difference between the perpetual contract price and the spot price of the underlying asset.

If the perpetual contract price is higher than the spot price, the funding rate will be positive. This means that traders who are holding a long position will pay a fee to traders who are holding a short position.

If the perpetual contract price is lower than the spot price, the funding rate will be negative. This means that traders who are holding a short position will pay a fee to traders who are holding a long position.

The funding rate is an important factor to consider when trading perpetual contracts. Traders who are not aware of the funding rate may be surprised to see their positions being liquidated due to a negative funding rate.