Futures is a financial instrument known and used for hundreds of years. It is the way to speculate on the value of different commodities such as gold, grains, or any other valuable goods. The fact is that it is a prediction and betting on it. The essence of futures trading is to make the correct forecast for the future price and then, depending on it, to purchase or sell commodities or any other underlying goods.
Futures for crypto is also a popular tool. An underlying asset is a digital currency. A trader analyses its prospects based on many factors from the past and builds a prediction on its price for the future. The time frame can be different.
What must be analysed:
• Crypto chart and price indicators, patterns
• Updates and changes in the project and how they will affect the price
• External conditions and factors in the world economy, inflation, crisis, etc.
• The market trend and possibilities for its changes.
Depending on the conclusion made, a trader picks a long or short position:
1. Long - states for a trader’s plans to sell digital assets when their price grows.
2. Short - means selling coins beforehand and then buying them back when the value decreases.
That may seem to be easy, but that is definitely not a simple thing to trade futures. It is one of the most advanced trading tools because it requires a trader to know the market so well that he is able to predict its fluctuations, collecting all the factors that can affect it. When the forecast is made wrong, the trader bears enormous losses.