How to trade perpetual contracts on Poloniex

Perpetual contracts allow for speculative trading on an underlying asset without necessitating its actual acquisition or storage, making them a popular option for cryptocurrency exposure.

Nov 25, 2024 at 11:05 am

How to Trade Perpetual Contracts on Poloniex

Perpetual contracts are a type of futures contract that allows traders to speculate on the future price of an underlying asset without having to take delivery of the asset itself. This makes them a popular instrument for traders who want to gain exposure to the cryptocurrency market without having to deal with the complexities of owning and storing digital assets.

Poloniex is one of the largest and most popular cryptocurrency exchanges in the world, and it offers a wide range of perpetual contracts for trading. In this guide, we will show you how to trade perpetual contracts on Poloniex, step by step.

Step 1: Create a Poloniex Account

The first step is to create a Poloniex account. To do this, visit the Poloniex website and click on the "Sign Up" button. You will then be asked to provide your email address, username, and password. Once you have filled out all of the required information, click on the "Create Account" button.

Step 2: Fund Your Account

Once you have created an account, you will need to fund it with cryptocurrency. Poloniex accepts a wide range of cryptocurrencies, including Bitcoin, Ethereum, and Tether. To deposit cryptocurrency into your account, click on the "Deposit" button in the top navigation bar. You will then be given a list of all of the supported cryptocurrencies. Select the cryptocurrency that you want to deposit and then follow the instructions on the screen.

Step 3: Choose a Perpetual Contract

Once you have funded your account, you can start trading perpetual contracts. To do this, click on the "Perpetual" tab in the top navigation bar. You will then be shown a list of all of the available perpetual contracts.

Each perpetual contract is based on a different underlying asset. For example, the BTC/USDT perpetual contract is based on the price of Bitcoin in US dollars. The ETH/BTC perpetual contract is based on the price of Ethereum in Bitcoin.

When choosing a perpetual contract, it is important to consider the following factors:

• The underlying asset: What asset do you want to speculate on?
• The leverage: How much leverage do you want to use? Leverage is a tool that can magnify your profits, but it can also magnify your losses.
• The funding rate: What is the funding rate for the contract? The funding rate is a fee that is paid by long or short traders to the counterparty.

Step 4: Place an Order

Once you have chosen a perpetual contract, you can place an order. To do this, click on the "Buy" or "Sell" button in the order form. You will then be asked to specify the following information:

• The order type: There are two types of orders: market orders and limit orders. Market orders are executed immediately at the current market price. Limit orders are executed only if the price reaches a specified level.
• The order size: This is the number of contracts that you want to buy or sell.
• The order price: This is the price at which you want to buy or sell the contracts.

Once you have filled out all of the required information, click on the "Place Order" button. Your order will then be submitted to the Poloniex order book.

Step 5: Monitor Your Order

Once you have placed an order, you can monitor its status in the "My Orders" tab. Here, you can see the following information:

• The order status: This will tell you whether your order has been filled, partially filled, or canceled.
• The order price: This is the price at which your order was executed.
• The order size: This is the number of contracts that you bought or sold.
• The order time: This is the time at which your order was placed.

You can also cancel your order at any time by clicking on the "Cancel Order" button.

Step 6: Close Your Position

When you are ready to close your position, you can do so by placing an order in the opposite direction. For example, if you bought 10 BTC/USDT perpetual contracts, you would need to sell 10 BTC/USDT perpetual contracts to close your position.

Once you have placed your order to close your position, you can monitor its status in the "My Orders" tab. When your order has been filled, your position will be closed.

Tips for Trading Perpetual Contracts on Poloniex

Here are a few tips for trading perpetual contracts on Poloniex:

• Use leverage wisely. Leverage can magnify your profits, but it can also magnify your losses. Only use leverage that you can afford to lose.
• Be aware of the funding rate. The funding rate can have a significant impact on your profits or losses. Make sure you understand how the funding rate works before you start trading.
• Manage your risk. Risk management is one of the most important aspects of trading. Make sure you have a plan for managing your risk before you start trading.
• Don't trade with more money than you can afford to lose. Trading perpetual contracts can be risky. Never trade with more money than you can afford to lose.