Navigating a cryptocurrency exchange can seem daunting at first, but understanding the core functionalities simplifies the process. This guide breaks down the primary trading methods available on most major platforms: spot trading, margin trading, and futures contracts. We will explore how to execute orders, manage risk, and utilize different trading modes effectively.
Understanding Spot Trading
Spot trading is the most straightforward method for buying and selling digital assets. It involves the immediate exchange of cryptocurrencies between traders at current market prices. Transactions are settled instantly, or "on the spot," once an order is executed.
How to Place a Spot Trade on Desktop
Step 1: From the main dashboard, navigate to the "Trade" section and select "Spot."
Note: Ensure you have transferred tokens from your Fiat, Margin, or Futures wallet into your Spot wallet. You may also need to deposit funds from an external wallet.
Step 2: Select the trading pair you wish to trade, such as "BTC/USDT," or use the search function to find a specific asset.
Step 3: Choose your order type based on your strategy: "Limit," "Market," or "Stop-Limit."
- Limit Order: Select "Limit," enter your desired "Price" and "Quantity," then click "Buy BTC" or "Sell BTC" to place the order.
- Market Order: Select "Market," enter the total "Amount" you wish to spend or receive, and click "Buy BTC" or "Sell BTC" for immediate execution at the best available market price.
- Stop-Limit Order: Select "Stop-Limit," enter the "Trigger Price," your "Limit Price," and the "Quantity." Click "Buy BTC" or "Sell BTC" to activate the order once the trigger price is hit.
Step 4: Monitor your order status under "Open Orders," "Stop-Limit Orders," or "Order History" at the bottom of the trading interface.
How to Place a Spot Trade on Mobile App
1. Open your exchange app and tap the [Trade] button at the bottom to access the spot trading interface.
Note: Confirm that your assets are in your Spot wallet. Transfer them from other wallets if necessary.
2. Choose the trading pair you want to trade, for example, BTC/USDT.
3. Select either a limit or stop-limit order.
- Limit Order: Tap "Buy" or "Sell," select the "Limit" order type, enter your "Price" and "Quantity," and then confirm the order.
- Stop-Limit Order: Tap "Buy" or "Sell," select the "Stop-Limit" order type, enter the "Trigger Price," "Limit Price," and "Quantity," and then confirm.
4. Once the order is placed, you can review active orders under the "Open Orders" or "Stop-Limit" tabs.
Exploring Margin Trading
Margin trading allows users to trade with borrowed funds, amplifying both potential profits and losses. It enables traders to open larger positions than their account balance would normally allow. Successful trades can yield higher returns, but unsuccessful ones can result in the loss of your entire margin balance.
Getting Started with Margin Trading: A 5-Step Process
- Activate Your Margin Account: Navigate to the Margin trading section and agree to the terms to enable your account.
- Transfer Assets: Move assets into your Margin wallet to serve as collateral for loans.
- Borrow Funds: Use your collateral to borrow additional funds to trade with.
- Execute Trades: Go long (buy) if you expect the price to rise or go short (sell) if you expect it to fall.
- Repay the Loan: Repay the borrowed amount plus any accrued interest.
Detailed Margin Trading Walkthrough
Step 1: Open a Margin Account
After logging in, find [Trade] in the menu bar and click [Margin]. On the margin market interface, click [Open a margin account], read the agreement, and confirm activation.
Step 2: Transfer Assets
Click [Transfer], choose the tokens (e.g., BTC, USDT), specify the amount to move to your Margin wallet, and confirm. Your borrowing power is based on the value of your collateral.
Step 3: Borrow Funds
Click [Borrow] in "Normal" mode. The system will show the maximum amount you can borrow based on your collateral. Enter the desired loan amount, review the hourly interest rate, and confirm the loan.
Step 4: Execute Trades (Long/Short)
- Buy/Long: If you believe BTC's price will increase, borrow USDT to buy BTC. You can use Limit, Market, or Stop-Limit orders. Sell later at a higher price to profit, then repay the loan.
- Sell/Short: If you believe BTC's price will decrease, borrow BTC and sell it at the current price. Later, buy back the BTC at a lower price, return it to repay the loan, and keep the difference as profit.
Step 5: Repay the Loan
Go to [Assets - Account] - [Margin Account]. Find the token you borrowed, click [Repay], select the loan, enter the amount, and confirm. Ensure you have sufficient funds in your Margin wallet for repayment.
Auto Mode for Simplified Margin Trading
The Auto Mode streamlines the borrowing and repayment process.
- Auto Borrow/Repay: The system automatically borrows funds when an order exceeds your available balance and repays loans when orders are canceled or partially filled, minimizing interest costs.
- Available Amount: The available balance displayed factors in your selected leverage and total margin assets.
- Outstanding Loans: If you have an unpaid loan, transferring assets to your margin account will trigger an automatic repayment of interest first, then the principal.
Using Stop-Limit Orders in Margin Trading
A Stop-Limit order combines a stop-loss and a limit order to manage risk. You set a trigger price and a limit price. Once the trigger price is hit, a limit order is automatically placed.
Settings:
- Trigger Price: The price at which the order is activated.
- Price: The limit price for the buy/sell order.
- Quantity: The amount to buy or sell.
Note: High market volatility can affect available borrowing power, potentially causing a stop-limit order to fail.
Example: If EOS is trading above 2.5 USDT and you believe that price is a key support level, you can set a stop-limit buy order with a trigger at 2.7 USDT and a limit price of 2.5 USDT. If the price falls and hits 2.7 USDT, a limit buy order for 2.5 USDT will be placed automatically.
How to Place a Stop-Limit Order:
- On the Margin trading page, select your mode and click [Stop-Limit].
- Set your trigger price, limit price, and amount. Click "Buy" or "Sell."
- Monitor the order status in the [Stop-Limit Order] interface. Once triggered, it will appear in the "Open Orders" list.
Trading Perpetual Futures Contracts
Perpetual futures contracts are derivatives that allow you to speculate on an asset's future price without an expiry date. Coin-margined contracts are settled in the underlying cryptocurrency (e.g., BTC).
Trading Futures on Desktop
Step 1: Log in and navigate to "Derivatives" > "Futures" to access the trading page.
Step 2: Familiarize yourself with the interface. You'll see price charts, an order book, recent trade history, and your position/order information.
Step 3: Select a coin-margined perpetual contract pair, like BTC/USDT.
Step 4: Ensure your contract account is funded. Transfer assets from your Spot wallet or make a fiat deposit if needed.
Step 5: With funds available, you can place an order. Set your price and number of contracts, then click "Buy/Long" or "Sell/Short."
Step 6: Adjust your leverage. Exchanges often support leverage up to 125x. You can set different leverage levels for long and short positions in cross margin mode. Higher leverage increases both potential profit and risk.
Step 7: Choose Your Margin Mode:
- Cross Margin: Margin is shared across all positions in the same settlement currency. Profits from one position can help prevent the liquidation of another. This mode offers flexibility but risks your entire balance for that currency.
- Isolated Margin: Margin is allocated to a single position. Your maximum loss is limited to the funds in that isolated position, protecting the rest of your account balance.
Step 8: Going Long or Short
- Long: Profit from a price increase.
- Short: Profit from a price decrease.
Order Types for Futures Trading
- Limit Order: Set a specific execution price. Prioritizes price over speed.
- Market Order: Execute immediately at the best available market price. Prioritizes speed over price.
- Stop-Limit Order: A limit order is placed once a specified trigger price is reached. Used for stop-losses or take-profits.
- Immediate-or-Cancel (IOC): The order must be filled immediately, either completely or partially; any unfilled portion is canceled.
- Market-to-Limit (MTL): Submitted as a market order. Any unfilled portion is canceled and resubmitted as a limit order at the price the filled portion was executed.
👉 Explore more advanced trading strategies
Trading Futures on Mobile App
Step 1: In the app, tap "Futures" and select your contract (e.g., BTC/USD coin-margined).
Step 2: Access price charts, indicators, and settings from the top of the screen.
Step 3: Select your desired trading pair.
Step 4: Transfer funds to your futures account from your Spot wallet if necessary.
Step 5: Place your limit order by setting the price and contract amount, then execute with "Buy/Long" or "Sell/Short."
Step 6: Adjust your leverage settings for each position to manage risk.
Step 7: Select between Isolated Margin (limited risk) or Cross Margin (shared margin) modes.
Step 8: Execute trades based on your market outlook (long for price rises, short for price falls).
Frequently Asked Questions
What is the main difference between spot and margin trading?
Spot trading involves buying and selling assets with your own funds for immediate settlement. Margin trading involves borrowing funds to trade larger positions, which amplifies both potential gains and losses. It is inherently riskier than spot trading.
How does leverage work in futures trading?
Leverage allows you to open a position worth much more than your initial margin. For example, with 10x leverage, a $100 margin can control a $1,000 position. While this can magnify profits, it also magnifies losses, potentially leading to the liquidation of your position if the market moves against you.
What is the purpose of a stop-loss order?
A stop-loss order is a risk management tool designed to limit an investor's loss on a position. It automatically triggers a market sell order if the asset's price falls to a specified level, helping to prevent larger losses during sudden market downturns.
Can I switch between isolated and cross margin modes?
Most exchanges allow you to switch from isolated margin to cross margin at any time. However, switching from cross margin back to isolated margin is often restricted if you have open positions, as it would require reallocating collateral.
What happens if my margin position gets liquidated?
Liquidation occurs when your position's losses approach the value of your collateral. To protect the lender, the exchange automatically closes your position. In isolated margin, you only lose your initial margin. In cross margin, other assets in the same currency may be used to prevent liquidation, but you could lose more than one position's margin.
Is futures trading suitable for beginners?
Futures trading is complex and involves significant risk due to leverage. It is generally not recommended for beginners. It is crucial to have a solid understanding of markets, leverage, and risk management strategies, and to start with very small positions or use demo accounts before trading with real funds.