How to trade perpetual contract with BitFlyer

Perpetual contracts on BitFlyer allow traders to speculate on future crypto asset prices without physically holding the underlying assets, enabling continuous trading without settlement.

Nov 11, 2024 at 07:04 am

A Comprehensive Guide to Perpetual Contract Trading on BitFlyer

1. Understanding Perpetual Contracts

Perpetual Contracts are a type of crypto derivative that simulate the price movements of an underlying asset, such as Bitcoin or Ethereum. Unlike traditional crypto futures, which have an expiration date, perpetual contracts are designed for continuous trading without settlement. This unique contract type allows traders to speculate on the future price of an asset without physically holding the underlying asset.

2. Choosing a Trading Pair

The first step to trading perpetual contracts on BitFlyer is to select a trading pair. BitFlyer offers perpetual contracts on a range of crypto assets, including Bitcoin, Ethereum, Litecoin, and many more. Consider your market analysis and the volatility of each asset when making your selection.

3. Funding Your Account

Before you can begin trading perpetual contracts, you must fund your BitFlyer account with cryptocurrencies or fiat currencies like the Japanese Yen (JPY). BitFlyer supports multiple funding methods, including bank transfers, wire transfers, and credit card deposits.

4. Placing an Order

Once your account is funded, you can start placing orders. Perpetual contracts on BitFlyer can be executed in two ways: market orders and limit orders. Market orders are instantly executed at the current market price, while limit orders are only executed when the market price reaches a specific price point you set.

5. Managing Your Margin

Perpetual contracts are traded on margin, which is a loan provided by BitFlyer to amplify your buying power. Margin trading allows you to multiply your potential profits, but it also comes with increased risk. It's crucial to manage your margin carefully and always trade within your risk tolerance.

6. Monitoring Your Position

After placing an order, it's essential to monitor your position regularly. BitFlyer provides real-time market data and charts to help you track the performance of your perpetual contracts. Keep a close eye on the market sentiment and make adjustments to your positions as needed.

7. Closing Your Position

To exit your perpetual contract position, you need to place an order in the opposite direction. For example, if you have an open long position, you would need to place a short order to close it. Once your closing order is executed, your position will be settled, and any profits or losses will be realized.

8. Advanced Trading Strategies

As you gain experience with perpetual contract trading, you can explore advanced trading strategies to enhance your profitability. Some popular strategies include scalping, swing trading, and automated trading using bots. It's essential to study these strategies thoroughly before implementing them in your trading.