How to play perpetual contracts on DigiFinex

To trade perpetual contracts on DigiFinex, beginners can open an account, fund it, choose a trading pair, understand margin and leverage, place an order, monitor their position, and close it when desired.

Nov 27, 2024 at 05:26 am

How to Play Perpetual Contracts on DigiFinex: A Comprehensive Guide for Beginners

Introduction

Perpetual contracts, also known as perpetual futures, are a type of derivative contract that allow traders to speculate on the price of an underlying asset without owning the asset itself. They are similar to futures contracts, but perpetual contracts do not have an expiration date. This means that traders can hold a perpetual contract indefinitely until they decide to close it. This guide will provide a comprehensive overview of how to play perpetual contracts on DigiFinex, a reputable cryptocurrency exchange known for its user-friendly platform and robust trading features.

Step 1: Open an Account on DigiFinex

To trade perpetual contracts on DigiFinex, the first step is to open an account. Visit the DigiFinex website and click on the "Sign Up" button. Enter your email address, create a password, and complete the account registration process. Once your account is created, you will need to verify your email address and identity.

Step 2: Fund Your Account

Before you can start trading perpetual contracts, you need to fund your DigiFinex account. DigiFinex supports a variety of deposit methods, including cryptocurrencies, credit cards, and bank transfers. Choose the deposit method that is most convenient for you and follow the instructions on the screen to complete the deposit process.

Step 3: Choose a Trading Pair

DigiFinex offers perpetual contracts on a wide range of cryptocurrency pairs. Choose the trading pair that you want to trade based on your market analysis and trading strategy. Common trading pairs on DigiFinex include BTC/USDT, ETH/USDT, and BNB/USDT.

Step 4: Understand the Margin and Leverage

Perpetual contracts are traded on margin, which means that you can borrow funds from the exchange to increase your buying power. The margin requirement is the minimum amount of capital that you need to maintain in your account in order to trade perpetual contracts. Leverage is the ratio of borrowed funds to your own capital. Higher leverage allows you to trade with a larger position size, but it also increases your risk of losing money.

Step 5: Place an Order

Once you have chosen a trading pair and set your margin and leverage parameters, you can place an order to open a perpetual contract. There are two types of orders that you can place:

Market order: A market order is executed immediately at the current market price.
Limit order: A limit order is executed only when the market price reaches a specified price level.
Enter the order size, price (for limit orders), and order type. Click on the "Buy" or "Sell" button to place your order.

Step 6: Monitor Your Position

Once your order is executed, you will need to monitor your position. The DigiFinex trading interface provides real-time updates on your position size, profit/loss, and margin level. You can adjust your position size or close your position at any time by placing an opposite order.

Step 7: Close Your Position

When you are ready to close your position, place an order in the opposite direction of your original order. For example, if you opened a long position by buying a perpetual contract, you would close your position by selling a perpetual contract of the same size.