How to play AscendEX exchange contracts

Understanding contracts, selecting trading pairs, and adjusting leverage are crucial steps in maximizing AscendEX's exchange contracts potential.

Nov 23, 2024 at 07:07 am

How to Play AscendEX Exchange Contracts

Introduction

AscendEX has emerged as a popular cryptocurrency exchange among traders who seek advanced trading features such as contracts. AscendEX exchange contracts offer a flexible and potentially lucrative way to speculate on the price movements of various cryptocurrencies. This comprehensive guide will walk you through the intricacies of trading contracts on AscendEX, empowering you to harness the exchange's potential.

Step 1: Understanding Contracts

Contracts, commonly referred to as perpetual contracts or perpetual futures, are financial instruments that enable traders to speculate on the future price of an underlying asset, in this case, cryptocurrencies. Unlike traditional futures contracts with predetermined expiry dates, contracts offer perpetual exposure, allowing traders to maintain their positions indefinitely.

Step 2: Choosing a Trading Pair and Leverage

AscendEX offers a wide range of cryptocurrency contracts, each representing a specific trading pair, such as BTC/USDT or ETH/USDT. These pairs allow traders to speculate on the price relationship between two cryptocurrencies. Additionally, traders can adjust the leverage they apply to their trades, which amplifies both potential profits and potential losses.

Step 3: Depositing Funds to Your AscendEX Account

In order to initiate trading, traders must first deposit funds into their AscendEX account. The exchange supports various deposit methods, including bank transfers, credit/debit cards, and cryptocurrency deposits. After successful deposit, traders can transfer funds from their spot wallet to their contract wallet.

Step 4: Opening a Contract Position

With funds available in the contract wallet, traders can open a contract position either by going long or short. A long position represents a bet that the underlying cryptocurrency's price will rise, while a short position represents a bet that the price will fall. Margin is required to open a contract position, with the initial margin varying depending on the leverage used.

Step 5: Managing Risk and Setting Stop-Loss Orders

Trading contracts involves significant risk, and it is crucial to implement effective risk management strategies. AscendEX provides stop-loss orders, which automatically close positions when the price reaches a predefined level, protecting traders from excessive losses. Additionally, traders can adjust their position size and use take-profit orders to capture potential gains.

Step 6: Monitoring and Adjusting Positions

Once a contract position is open, traders need to monitor market conditions and adjust their positions accordingly. Trailing stop-loss orders can be employed to trail the market and lock in profits. Furthermore, traders may add to their positions or close them out partially to realize profits or mitigate losses.

Step 7: Closing a Contract Position

When ready, traders can close their contract positions by placing the opposite order to the one that opened the position. For instance, if a trader opened a long position, they would close it by placing a short position. Closing a position settles the contract and releases any profit or loss incurred during the trade.