How to make money with AscendEX contracts

Through leverage of up to 100x and low trading fees, AscendEX's contract trading provides traders with opportunities to maximize profits while carefully managing their risk.

Nov 24, 2024 at 07:08 am

How to Make Money with AscendEX Contracts

AscendEX, a leading global digital asset trading platform, offers a comprehensive suite of contract trading products that provide traders with the potential to generate substantial profits. Here is a detailed guide on how to make money with AscendEX contracts:

1. Understanding AscendEX Contracts

AscendEX contracts are perpetual futures contracts that allow traders to speculate on the price fluctuations of cryptocurrencies without taking physical delivery of the underlying asset. These contracts are cash-settled, which means that traders only receive or pay the difference between the opening and closing prices of the contract. Perpetual futures contracts offer several advantages, including:

• Leverage: AscendEX contracts offer leverage of up to 100x, which amplifies both profits and losses. However, it is crucial to use leverage prudently, as it can lead to significant losses if not managed properly.
• Low fees: AscendEX has competitive trading fees, making it cost-effective to trade contracts. The fees are typically charged on a taker-maker basis, where takers pay slightly higher fees for removing liquidity from the market and makers receive rebates for providing liquidity.
• High liquidity: AscendEX is one of the largest crypto asset exchanges in the world, with high liquidity across its contract markets. This liquidity ensures that traders can enter and exit positions quickly and efficiently at competitive prices.

2. Choosing the Right Contract

AscendEX offers a wide range of contract trading pairs, including major cryptocurrencies such as Bitcoin (BTC), Ethereum (ETH), and Binance Coin (BNB), as well as altcoins and DeFi tokens. When selecting a contract, traders should consider the following factors:

• Trading volume: Contracts with higher trading volume generally have tighter spreads and lower slippage, making them more suitable for scalping and high-frequency trading.
• Market volatility: Contracts tied to volatile assets offer more opportunities for profit but also carry higher risk. Traders should assess their risk tolerance and choose contracts accordingly.
• Correlation: Traders can diversify their portfolios by trading contracts with different correlations. This helps mitigate risks and improve overall returns.

3. Formulating a Trading Strategy

A well-defined trading strategy is essential for success in contract trading. Traders should develop a clear set of rules and triggers based on technical analysis, fundamental analysis, or a combination of both. Common trading strategies include:

• Trend trading: This involves identifying and following the overall price trend to capitalize on momentum. Traders can use moving averages, trendlines, and other technical indicators to determine the trend.
• Range trading: This involves trading within a defined range based on support and resistance levels. Traders buy when the price approaches the support and sell when it nears the resistance.
• Scalping: This involves making frequent, short-term trades with minimal profit targets. Scalpers rely on high liquidity and fast price action to capture small profits from market inefficiencies.

4. Managing Risk

Risk management is paramount in contract trading. Traders should employ proper risk management techniques to protect their capital and minimize losses. Important risk management practices include:

• Setting stop-loss orders: Stop-loss orders automatically close a position when the price reaches a predetermined level, limiting potential losses.
• Using take-profit orders: Take-profit orders automatically close a position when the price reaches a target profit margin, locking in gains.
• Position sizing: Traders should carefully determine the position size based on their risk tolerance and account balance. Larger positions increase both potential profits and losses, so it is crucial to maintain a balanced risk profile.

5. Monitoring and Adjusting

Contract trading is a dynamic process that requires constant monitoring and adjustment. Traders should track their open positions, monitor market conditions, and make adjustments as needed. This involves reviewing charts, analyzing technical indicators, and adjusting risk management parameters based on market behavior. Regular monitoring allows traders to stay informed and react promptly to changes in the market.