Author

Topic: Questions about perpetual trading (Read 132 times)

legendary
Activity: 1652
Merit: 1208
Gamble responsibly
February 19, 2024, 04:59:52 AM
#11
In all of these can we say that a risk management strategy is to not long the market? Because in as much as with or without leverage a trader can still get liquidated, there to manage the risk involved in not using leverage is to long the market. Correct?
Trading is not easy at all. Also as you can make money from long position, you can also make money from short position. Just make sure you use a very low leverage. You might go long and the market might start going in the short direction which is against your position. What that is best is to know when to use stop loss, I mean for you to just close the position for more losses not to happen. Losses can occur with in long or short position. It is you that should be able to manage the risk by using low leverage and using a good strategy to trade.
sr. member
Activity: 728
Merit: 444
February 17, 2024, 12:50:22 PM
#10
If it is long position, you may not be liquidated. But if it is a short position, you might be liquidated, especially if trading altcoins that can increase 2 times of its price within some hours or some days.
Thank you all for responding, from what I understand with no leverage I could be liquidated if I short the market but not if I long
In all of these can we say that a risk management strategy is to not long the market? Because in as much as with or without leverage a trader can still get liquidated, there to manage the risk involved in not using leverage is to long the market. Correct?
legendary
Activity: 1652
Merit: 1208
Gamble responsibly
February 17, 2024, 04:08:56 AM
#9
Here the author of the topic has some confusion in terms. 1x leverage is margin trading, that is, trading using borrowed funds from the trading platform. And you can be liquidated both long and short if you don't use a stop loss. If you use a stop loss, there will be no liquidation.
Future and perpetual future trading are not the same as margin trading. The leverage in margin trading is derived from borrow funds, but that is not how future trading works.

If we mean buying perpetual Bitcoin futures without leverage, then there is no liquidation, but in the long term such assets gradually degrade in price, no matter in which direction they open due to constant rebalancing.
There is no such thing. If you are trading perpetual future, you have to use leverage.

Thank you all for responding, from what I understand with no leverage I could be liquidated if I short the market but not if I long
Yes you are correct. But you are not getting it correctly. If you use 1x, you still use leverage. Even some exchanges can let you go 0.5x which is still leverage.  Example is if you have $100 to trade and go short position with 0.5x, that means the position will be opened with $50.
member
Activity: 75
Merit: 21
February 17, 2024, 02:42:29 AM
#8
Thank you all for responding, from what I understand with no leverage I could be liquidated if I short the market but not if I long
hero member
Activity: 2002
Merit: 534
February 17, 2024, 02:02:24 AM
#7
Hi everyone,

I have 2 questions about perpetual trading:

1/ If I don't use leverage (i.e. x1) do I risk being liquidated if my trade doesn't go in the right direction?

2/ If I don't use leverage (i.e. x1) can I keep a BTC contract, how can I do this in the Spot market?

Thank you

There is no risk of being liquidated in the spot market. You own the underlying coins and hopefully keep them stored safely outside of the exchange. There is no contract that says you lose everything if the coin drops 50%. So as long as you are not actively selling your coin you are not realizing any loss. The only situation would be when the project is discontinued and removed from the exchange. You might not be able to trade anymore and the exchange liquidates any existing coins. What exactly is a BTC contract? If you are trading with x1 you should be buying bitcoins directly. It's not a contract, you own the coins and nobody can force you to liquidate your coins.
copper member
Activity: 2198
Merit: 1837
🌀 Cosmic Casino
February 16, 2024, 06:54:04 PM
#6
Hi everyone,

I have 2 questions about perpetual trading:

1/ If I don't use leverage (i.e. x1) do I risk being liquidated if my trade doesn't go in the right direction?
Yes, your position will be liquidated if the price falls below the liquidation price. Remember, in crypto, anything can happen. For example, remember the LUNA crash? Even people with extremely low leverage got their positions liquidated when the price dumped to cents from over $100.

2/ If I don't use leverage (i.e. x1) can I keep a BTC contract, how can I do this in the Spot market?
Spot markets and perpetual contracts are two completely different markets. Better to use a spot market if you are going to open a long position at x1 or else you might end up incurring funding fees
legendary
Activity: 2660
Merit: 3710
February 16, 2024, 07:24:08 AM
#5
Here the author of the topic has some confusion in terms. 1x leverage is margin trading, that is, trading using borrowed funds from the trading platform. And you can be liquidated both long and short if you don't use a stop loss. If you use a stop loss, there will be no liquidation.
    But the author seems to be asking about trading without leverage, that is, without borrowed capital. If you buy a spot asset without leverage, liquidation is not possible, but a drawdown may be so significant that it could be equivalent to liquidation. For example, a drawdown of 99%. If we mean buying perpetual Bitcoin futures without leverage, then there is no liquidation, but in the long term such assets gradually degrade in price, no matter in which direction they open due to constant rebalancing.
legendary
Activity: 1652
Merit: 1208
Gamble responsibly
February 16, 2024, 04:48:32 AM
#4
1/ If I don't use leverage (i.e. x1) do I risk being liquidated if my trade doesn't go in the right direction?
If it is long position, you may not be liquidated. But if it is a short position, you might be liquidated, especially if trading altcoins that can increase 2 times of its price within some hours or some days.

2/ If I don't use leverage (i.e. x1) can I keep a BTC contract, how can I do this in the Spot market?
You will be charged or given funding rate fee. This might be a disadvantage. It is better to go for spot trading if you want to go long with 1x.  To go short position, you need to use 1x leverage in future trading.
hero member
Activity: 868
Merit: 952
February 15, 2024, 02:25:05 PM
#3
I have 2 questions about perpetual trading:

1/ If I don't use leverage (i.e. x1) do I risk being liquidated if my trade doesn't go in the right direction?

Yes even without leverage you still risk getting liquidated just that without it, the risk is minimal. The liquidation can be possible both when using stop loss or not using just that the latter Also minimizes the risk.

Example let say you have $100 as your future trading capital, then you place a trade with $50 as the position without leverage the trade will need to be at -100% for you to be liquidated. So if there is no stop loss before that -50% you risk liquidation and even if there is and it’s higher than the amount on your wallet say (-105%) is your stop loss then you will get liquidated before stop loss will even trigger.

2/ If I don't use leverage (i.e. x1) can I keep a BTC contract, how can I do this in the Spot market?

If I get your question without leverage will you be able to borrow  to trade I.e spot trading, i will say no, leverage is actually the contract the broker or exchange gives to you and without it you are not getting the contract. In fact this one of the differences between future trading/perpetual and spot trading.

Well that means you only using spot if you arent using leverage at all.  Not sure if theres a future trading that only uses 1x maybe still since you arr using that medium at all. You can long and short order while on spot only natural trading.


Yes there is exchanges that allows not using leverage (x1) for future trading, if I can remember Bybit exchange actually allows that.
legendary
Activity: 2268
Merit: 1379
Fully Regulated Crypto Casino
February 15, 2024, 01:45:50 PM
#2
Hi everyone,

I have 2 questions about perpetual trading:

1/ If I don't use leverage (i.e. x1) do I risk being liquidated if my trade doesn't go in the right direction?

2/ If I don't use leverage (i.e. x1) can I keep a BTC contract, how can I do this in the Spot market?

Thank you
Well that means you only using spot if you arent using leverage at all.  Not sure if theres a future trading that only uses 1x maybe still since you arr using that medium at all. You can long and short order while on spot only natural trading.

What you mean btc contract? Like using the btc as collateral for the trade right?
member
Activity: 75
Merit: 21
February 15, 2024, 01:31:58 PM
#1
Hi everyone,

I have 2 questions about perpetual trading:

1/ If I don't use leverage (i.e. x1) do I risk being liquidated if my trade doesn't go in the right direction?

2/ If I don't use leverage (i.e. x1) can I keep a BTC contract, how can I do this in the Spot market?

Thank you
Jump to: