Best strategies for Bybit futures

Bybit offers inverse and linear futures, with key differences in denomination, P&L calculation, and risk—always confirm contract type before trading.

Jul 23, 2025 at 01:56 pm

Understanding Bybit Futures Contracts

Bybit offers both inverse and linear futures contracts, each catering to different trader preferences. Inverse futures are denominated in cryptocurrency (e.g., BTCUSD), while linear futures use stablecoins like USDT (e.g., BTCUSDT). Traders must understand this distinction because it affects profit/loss calculations, margin requirements, and risk exposure. For example, in inverse contracts, gains in BTC terms may appear smaller due to BTC price fluctuations, whereas linear contracts provide stablecoin clarity. Always check the contract type before entering a trade—this prevents unexpected slippage or margin issues.

Choosing the Right Leverage

Leverage amplifies both gains and losses, making it one of the most critical decisions in Bybit futures trading. Bybit allows up to 100x leverage, but using such high leverage is risky for inexperienced traders. Instead, start with 5x to 10x if you're new. Adjust leverage dynamically based on market volatility—lower it during high volatility (e.g., news events) and increase cautiously during stable trends. To change leverage on Bybit:

• Navigate to the trading interface
• Click the leverage slider or input field
• Select your desired level
• Confirm the change in the pop-up window
  This process must be repeated for each position if you're running multiple trades.
  

  Implementing Stop-Loss and Take-Profit Orders

  
  Bybit allows both stop-loss and take-profit orders to automate risk management. These are essential for preserving capital and locking in profits without constant monitoring. When setting a stop-loss:
• Right-click the order book or use the order panel
• Enter the price level where you want to exit if the market moves against you
• Choose between "Market" or "Limit" execution
  For take-profit:
• Set a price target above (long) or below (short) your entry
• Use "Limit" to avoid slippage on smaller positions
  These orders remain active until triggered or canceled—even if you log out of Bybit.
  

  Using Technical Indicators for Entry and Exit Signals

  
  Bybit integrates TradingView charts, enabling traders to apply technical indicators directly. Popular strategies include:
• RSI (Relative Strength Index): Use 30/70 thresholds to spot overbought or oversold conditions
• Bollinger Bands: Look for price touching upper/lower bands as potential reversal signals
• MACD: Watch for crossovers between the MACD line and signal line for momentum shifts
  To add these on Bybit:
• Click the "Indicators" button on the chart
• Search for the desired tool (e.g., RSI)
• Customize parameters (e.g., period length)
• Apply to chart
  Combine at least two indicators to reduce false signals—e.g., RSI divergence + Bollinger Band touch.
  

  Managing Position Size Based on Risk Tolerance

  
  Never risk more than 1–2% of your total account balance on a single trade. This rule minimizes the impact of losing streaks. To calculate position size:
• Determine your maximum risk in USD (e.g., 1% of $10,000 = $100)
• Identify your stop-loss distance in price (e.g., $100 from entry)
• Divide risk amount by stop-loss distance: $100 / $100 = 1 contract
  Bybit displays position size in USD or contracts depending on the pair. Always verify the size before confirming the order—it’s easy to misread when trading high-leverage pairs.
  

  Monitoring Funding Rates for Cost Efficiency

  
  Funding rates are periodic payments between long and short holders, occurring every 8 hours on Bybit. Positive funding means longs pay shorts; negative means the reverse. High funding rates can erode profits over time, especially in sideways markets. To check funding rates:
• Scroll to the bottom of the futures trading page
• View the "Funding Rate" section
• Compare across pairs to find cost-efficient trades
  Avoid holding positions through funding times (00:00, 08:00, 16:00 UTC) unless the trend strongly supports your direction.
  

  Frequently Asked Questions

  How do I switch between cross and isolated margin on Bybit?
  
  Click the margin mode button next to the leverage slider. Select "Cross" to use your entire wallet balance as margin, or "Isolated" to allocate a fixed amount per position. Isolated is safer for beginners—it limits loss to the allocated margin.

  Can I trade Bybit futures with a mobile app?
  
  Yes. The Bybit mobile app supports all futures features: placing orders, setting stop-loss/take-profit, adjusting leverage, and viewing charts. Tap the three-line menu, select "Derivatives," then choose your contract.

  What happens if my position gets liquidated?
  
  Bybit uses an Auto-Deleveraging System (ADL) if the insurance fund is exhausted. Your position is closed at the bankruptcy price, and remaining losses may be covered by other traders' positions. You’ll receive a notification and can review the liquidation in your order history.

  Does Bybit offer copy trading for futures?
  
  Yes. Navigate to the "Copy Trading" tab, select a proven trader, and set your allocation. You can mirror their futures trades automatically—ideal for learning strategies from experienced users. Adjust your risk settings to match your tolerance.