The $100 Risk That Could Wipe You Out
59sHighlights the dangerous downside of leverage, creating tension and caution.
▶ Play ClipAI Summary
This video explains the basics of trading futures on Binance, covering how to transfer funds, set up a trade, use leverage, and manage risk with stop losses and take profits. It also demonstrates a real trade example and mentions alternative exchanges.
Chapters
[00:02]
What is Futures Trading
Futures trading is similar to classic trading but Binance lends you money (leverage) to amplify your position. You can profit from price increases (long) or decreases (short) without owning the asset.
[00:28]
Transferring Funds to Futures Wallet
Transfer crypto from spot or funding wallet to futures wallet. Use USDT for USDⓈ-M futures or crypto like BTC for coin-M futures.
[01:35]
Leverage Example
With $100 and 125x leverage, you can control $12,500 worth of Bitcoin. If price rises from $20k to $25k, profit is $3,150. If price drops to $19,840, you lose your $100.
[02:06]
Risk Management: Stop Loss and Take Profit
Set stop loss to limit losses (e.g., lose only $20 instead of $100) and take profit to lock in gains. These can be set as percentages or specific prices.
[03:14]
Margin Modes: Isolated vs Cross
Isolated margin limits loss to the margin of that position. Cross margin uses balance from other positions, risking more funds.
[04:08]
Placing a Trade: Long and Short
Buying is long (expect price up), selling is short (expect price down). You can set TP/SL and close positions instantly with market order.
[05:29]
Real Trade Example
The presenter spots a big drop with high volume, opens a short position with $12, sets TP/SL, and earns $4 profit in 1 minute.
[06:09]
Additional Resources
Mentions other videos on liquidation and trading fees, and promotes two exchanges: Week and Bitunix with bonuses up to 10,000 USDT.
Futures trading offers high profit potential with leverage but carries significant risk. Proper use of stop losses and take profits is essential to manage risk and avoid liquidation.
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Mentioned in this Video
Tutorial Checklist
Study Flashcards (10)
What is the maximum leverage available for Bitcoin on Binance futures?
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What is the maximum leverage available for Bitcoin on Binance futures?
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125x
01:35
What is the difference between isolated and cross margin?
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What is the difference between isolated and cross margin?
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Isolated margin limits loss to that position's margin; cross margin uses balance from other positions, risking more funds.
03:14
What does 'long' mean in futures trading?
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What does 'long' mean in futures trading?
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Buying an asset expecting its price to rise.
04:08
What does 'short' mean in futures trading?
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What does 'short' mean in futures trading?
easy
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Selling an asset expecting its price to fall.
04:08
How can you close a futures position instantly?
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How can you close a futures position instantly?
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Click the 'market' button to close at current market price.
04:47
What is the purpose of a stop loss?
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What is the purpose of a stop loss?
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To automatically close a position at a predetermined price to limit losses.
02:06
What is the purpose of a take profit?
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What is the purpose of a take profit?
easy
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To automatically close a position at a predetermined price to lock in profits.
02:06
If you have $100 and use 125x leverage on Bitcoin, what is the total position size?
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If you have $100 and use 125x leverage on Bitcoin, what is the total position size?
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$12,500
01:35
What does a green candlestick indicate?
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What does a green candlestick indicate?
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The price increased during that time interval.
05:16
What does a red candlestick indicate?
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What does a red candlestick indicate?
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The price decreased during that time interval.
05:16
💡 Key Takeaways
💡
Leverage Amplifies Profits and Losses
Illustrates how 125x leverage can turn a $100 investment into $3,150 profit, but also shows the risk of total loss if price drops slightly.
01:35
🔧
Stop Loss and Take Profit Are Essential
Emphasizes that setting stop loss can prevent losing all capital, and take profit locks in gains, which is crucial for risk management.
02:06
📊
Isolated vs Cross Margin
Explains the difference between limiting risk to one position (isolated) versus using entire account balance (cross), a key concept for margin trading.
03:14
🔧
Real Trade Example with Profit
Demonstrates a successful short trade based on volume and resistance, earning $4 in one minute, showing practical application.
05:29Full Transcript
[00:02] explain you what is a trading futures and how to use it in trading platform. I will be using Binance exchange as an example for this video. However, all crypto exchanges are the same and you will have the ability to use any other
[00:15] the top exchanges are in the description. Okay, so let's get started. Open your account and if you have some crypto on your spot or funding wallet, you can transfer it to the futures wallet. You
[00:28] can actually use USDT or any other crypto. If you use USDT, go to derivatives USD futures. If you use crypto like Bitcoin or Litecoin, go to coin futures. I have USDT.
[00:42] Okay, now you have the workspace. This looks pretty cool. That's very similar to the classic trading, but trading on the futures you can earn a lot of more money. So, what's the futures trading is? This is similar to the classic
[00:55] trading, but Binance lends you money when you buy or sell an asset. For example, you have only $100, so you can buy Litecoins for
[01:07] value, you can sell it. You will get your $100 and profit from this deal. So, you can get much more money from one deal. Or, if its price goes down, you will lose your $100 or part of that money, but no more. And also the nice
[01:21] without having them. Binance gives you the equivalent of your USDT in these coins. And when you close order, you buy this coin and it converts [music] to USDT back. So, you can sell it before buying. You can make the deal
[01:35] in the reverse order. You buy the coin when you think it will rise in price and sell when you think it will drop. For example, Bitcoin costs $20,000 and you have only $100. Binance gives you the maximum leverage is x125.
[01:50] So, you can buy Bitcoins for $12,500. Then Bitcoin rose to the 25k. Now you close the deal. And you get $3,150 in profit. That's really cool, but there is one thing. If this price drops to the 19K $840,
[02:06] you will lose your $100. So, it's very risky to trade here. You can minimize risks by setting stop losses and take profits. You set stop loss value to prevent the loss of all your money. Like if this price drops to 19K $970,
[02:20] you will lose [music] only $20 instead of $100. And you will be able to continue trading. Take profit is the price when the order closes don't miss out on a good closing price.
[02:32] Here, you select what currency you want to trade. There are a lot of coins. You you trade the most so you can fast switch between them. This is the current You can see here the chart of the changing the coin price. And this is the
[02:48] order list that shows the prices and volume of buying and selling bills. This part is your dashboard. Price, [music] this is the what price you want to buy or sell the coin. You can use the current price. Just click last. Or, you
[03:01] market price. To do this, just go to the market tab. Size [music] is how much money you want to put in the new order. I can put only 10 bucks because that's all I have. Then, you can change the margin mode. Isolated, for example, in
[03:14] 125 leverage, if my position drops by $10, the order will be closed and my margin will be liquidated. When I use the cross type, and if my position drops by $10, then this position will take margin from other you opened and you can
[03:27] lose more money. Then, set leverage, how much money you want to take from Binance for this deal. Your margin will be multiplied by this number. So, I will buy Bitcoins for $1,250 by using and risking only my $10.
[03:40] Different assets have different leverage maximum. For example, Bitcoin has 125 and Litecoin has only 25. Set the take profit and stop loss so you don't lose all your money. Usually, I go to advanced and then you can set the prices
[03:54] or the percentages or this value. For example, 10% for the profit and 0.5% for the loss. I want to buy, so I set these values on the buy tab. If you want to sell, do it on another tab. Then you can buy or sell the coin. Buying is also
[04:08] called long and selling [music] is short. And now I just make a long position by clicking this green button. As you can see, a new position has been closing values on the chart. Go to the display settings and enable these check
[04:21] boxes. You can see I have set not good values of the profit and loss. You can change it just by pressing this TP {slash} CL button and set the prices you want. You can also see here how much you will get or lose when this position will
[04:35] be closed. And also you can drag and drop take profit and stop loss on the chart. I recommend you to set stop losses and take profits. Don't be a loser. Guys, and a very important point. If
[04:47] something goes wrong, you can always close the position instantly by clicking on the button market right here. And to open regular order to close the position at the desired price. Next to it you can see the button limit and the field where
[05:02] you can enter the price. Let's talk about the chart. This is a candlestick chart. One candlestick is a changing price for the select interval. In my case it's 15 minutes, but you can change it for yourself.
[05:16] Green candlestick means the price has increased [music] in this interval and red means the price has fallen. And also we have this thin line that shows the maximum and minimum [music] prices for this time.
[05:29] volume. It's how much coins has been bought or sold within this time interval. This is actually all what you have to know about futures to start trading. So let's see the real example to get money. I see some big drop and a
[05:42] high volume of trade. So there are some big traders and this is a good signal to make a short position after some resistance. I have only $12 all in. A short position has been opened and I also set the loss and profit values.
[05:55] Wait some time. As you can see, I got $4 within 1 minute. There is also very important information. It's a dependence of liquidation on leverage and the dependence of the trading fees on the leverage. I talked about this in my
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