Binance Futures Trading for Beginners: Margin, Leverage, and Liquidation

[00:05] what is the function of each option and why is it here and how much profit and loss can you incur by increasing or decreasing what thing, you will get to know every single thing in detail in this video. I will show you and tell you live. So even if you

[00:20] are a complete beginner in futures trading on Binance, this video is very important for you. Please watch the video till the end and I have also given you the chapters in the video. So if you want to skip any part then you can

[00:32] skip it easily. Now let's move on to our video. So see, first of all this is your main interface. Now if you want to do futures trading in Binance then you have to if you want to do futures trading in Binance then you have to

[00:45] After that, you will see this option of futures below. But before that you have to keep in mind that if you are going to do futures trading then by going to assets and going to futures here, you have to keep in mind

[00:59] that you have to maintain some amount here because there is a separate wallet for futures wallet here because there is a separate wallet for futures wallet here If you want to order from your spot wallet, then you

[01:14] from your spot wallet, then you order as many coins as you want here. It will come as soon as you confirm the transfer. Now let us understand this futures trading here. First of all, let us

[01:31] understand what futures trading is and any kind of cryptocurrency taking place within futures trading. For

[01:45] invested ₹3000 in Bitcoin, then you bought Bitcoins worth ₹3000. Ok ? Now if Bitcoin goes down, you will suffer a loss. Bitcoin goes up and you see profits. Spot trading has taken place. No one is buying Bitcoin in futures here. Ok

[02:00] ? So here, in Bitcoin or any coin in which you trade futures, a prediction is being made on your price. The prediction here is based on the price of that coin, whether the price of that coin will go up or down in the future. If

[02:15] up or down in the future. If profits. If you say that the coin will go down in the futures and that coin starts going down, then the more it goes down, the more profit you will make. Ok? So

[02:29] this thing happens in futures. If the coin goes down in the spot, you are sure to lose. But even if the futures go down, you still make a profit here. If you have selected cell shot here. Ok ? Now let us see here. Like it

[02:44] is written USDSM at the top here. Meaning, if you keep this option selected here, it means that pairs will run in your USDT. Pair You will hear the word pair repeatedly here. Here, whatever price you see in futures,

[02:59] it is the price of that coin in USDT. Meaning, like this xrp is selected here. If I click on this, then all the coins that are here become visible to me here.

[03:14] So let's assume I have selected Bitcoin like BTC, then what is it getting written here? It is coming written around 120098. This is not the price of Bitcoin in IAR. But this is the price of Bitcoin in USDT.

[03:29] Meaning Ok? So this price that is being written is the price of Bitcoin in USDT.

[03:43] That's why here it is a pair of USDT. After that, here you I have shown here, in whichever coin you want to do futures trading, in whichever coin you have done research etc. whether this coin will go up or down,

[03:58] what will happen to its price in the future? So you select that coin from here. Ok? Then you can see the main things here. This is a cross. One, something is written like 96 and then this S is written. So let us understand the meaning of these three

[04:12] once. Cross means that your margin will be applied here, margin means the amount which is actually going to be applied from your pocket here. Ok? So you want to keep that cross isolated. Isolated means

[04:29] if you go to place a particular order here, then for this I will have a specific margin and he cannot take more than that which I will set. Cross means that my overall wallet can also be used for margin in the future

[04:44] depending on whether that coin goes up or down. So here we got to see two options like cross and isolated. Then this 96 that we see is leverage. We have heard two words. Margin and leverage. The margin I told you is the

[05:00] amount which is actually taken from your pocket. Leverage is that amount. Meaning, the function of leverage is that if you have less margin, meaning the amount to invest here is less, then even if you go to take positioning, to take orders,

[05:15] you will still be able to take positioning with a larger amount. You will be able to take orders with the help of leverage. Ok? So the more you increase the leverage, the less margin you have to pay. The less leverage you offer, the more margin you will have to pay.

[05:32] Ok? So here there is some such relationship between margin and leverage. But there is also a liquidation price which has a direct relation with both of these. Then here this ABBL meaning which is written, ABBL means available, which means the

[05:47] amount which you actually have in USDT to take trading here. I have 13.6 USDT here. I can order more if I want. By clicking like this, let's say I have 60 more USDT in my spot. So I can order 60 of them here.

[06:02] If I confirm, then I will have 13 + 60, so all those USDT will come here. Ok? Now here comes this limit. What is the limit? Meaning that

[06:15] if you go to place an order in futures trading here, If I select Limit here, what will happen here

[06:28] ? As it stands now, the price of Bitcoin is trading around 12351 USDT. I want that this futures trading order of mine should be executed only when it reaches ₹13,000 instead of ₹1,2000,

[06:46] then my order should be executed here. According to that, if executed here. According to that, if I use the limit order option here. Otherwise, if I want that as soon as I

[07:01] leave, my order should be executed immediately, then I will select the market option here. The market price itself is set here. My order will be executed here immediately.

[07:14] order will be executed here immediately. What was there in the limit was that it took some time and the order would not be placed until the Bitcoin reached the price I had set. Will be placed in the market immediately. Well, if you want to understand any order, then

[07:26] Well, if you want to understand any order, then If we go to talk, the video will be 30-40 minutes long. Ok? So like present, if the order has to be executed now. After that it is written whether the

[07:42] amount should be taken in USDT or Bitcoin. If you select Bitcoin here, then your amount will start moving in Bitcoin only, which will become very complicated. Because if you are going to execute an order here with 100 USDT or 200 USDT,

[07:57] execute an order here with 100 USDT or 200 USDT, It is better that if you select USDT here, then whatever amount will be written, it will be written in USDT. Ok? And this thin line here

[08:13] , this line is your available balance , what percentage of it do you want to take here in amount. If you select 25% for 1 minute, here the

[08:25] 1 minute, here the leverage is 93, I have kept it. 93% leverage means extremely risky. Ok? This thing will work at a very high risk. You increase the leverage only to the extent that people increase the leverage because they have

[08:39] less margin to give. The more leverage you take, the greater the probability that your order will be sold automatically. Ok ? So if I take the leverage here to be 15x, I confirm it. We have

[08:54] selected Bitcoin. Instead of Bitcoin, I select a smaller coin here. So that it is easy to understand. Like this is xrp. What this means is that two x two USDT equals one XRP. So this is a small coin. The available

[09:10] So this is a small coin. The available balance is 13.60, 50% of that, let's say I want to place an order here, then I can take it that way also. So what this means is that the USDT cost that I will have to pay will be

[09:25] USDT cost that I will have to pay will be 6.8 USDT. But my order value here is around 100 USDT. Ok? This is the most amazing thing. This is the benefit of leverage. Because I have

[09:40] This is the benefit of leverage. Because I have kept the leverage at 15x. Therefore, if I pay only 6 USDT, my order of 100 USDT will be processed here. Ok? If I can increase the leverage further here in front of you.

[09:53] I increased the leverage to 30. 30x leverage and as we had done in that, 50% of my as we had done in that, 50% of my amount is margin, 50% of that is applied, so amount is margin, 50% of that is applied, so see here it became 200, earlier $, here

[10:06] only positioning was being applied with 100 USDT, I doubled the leverage from 15 to 30x, so here directly my order value also got doubled but the value also got doubled but the margin remained the same which was 6 something

[10:19] before, 6 something, it is still 6 something but suddenly the order value got doubled. If I increase this more here, let's say. Should I make it 40, 45, I confirmed it and tripled it and here I

[10:33] kept everything the same, so see, it has become triple. 100 became almost 300. But I have to pay only that much margin. So here, the more I increase the leverage, the more the order value will increase. This means that I will start incurring profits and losses on the same

[10:48] large amount. The profit and loss percentage profit and loss percentage wise will be around $6 for me, the margin which I have given here from my pocket. Ok? But the percentage which

[11:02] is the probability of profit and loss will suddenly increase by a lot like 20-30%. Ok? Meaning, if I take more margin here, at the same I take more margin here, at the same speed, if Bitcoin, which is this XRP coin, let's say, goes

[11:17] down by 1% XRP here in the actual coin and the more leverage I have taken here, then my order can appear to me to go down by 10, 20, 30, 40%. The more

[11:29] order can appear to me to go down by 10, 20, 30, 40%. The more more my orders here may appear to be in loss. If my coin goes down, but if I select buy long as per my advice and if the

[11:44] coin goes up as per my advice, meaning I am buying long, then it should go up only, if it goes up then I can also make profit accordingly. Meaning there will be high end risk. The more leverage I take, the more the risk increases here. Ok? Now

[11:59] whatever is my total amount, I want to pay only 15% of it. Let's assume that I have to pay 16% of the amount that I have, I have to pay only 16% of it here. So look what is happening here, this

[12:14] cost means the cost means my actual margin which will be deducted can go around $2, maximum ₹201 USDT and the estimated liquidation price, liquidation

[12:26] price is the most beautiful thing. Look, this is 1.3 liquidation price. This Look, this is 1.3 liquidation price. This means that if I select buy long on my xrp here, then xrp should go up and down. But if XRP

[12:43] is currently trading at 2.29 and starts going down in the opposite direction of what I said in the opposite direction of what I said and while going down it crosses 1.3 USDT, then my entire order will automatically be sold and the

[12:57] margin of 2.17 USDT that I have taken here will be sold instantly and I will be left with a loss. Ok? This will happen in buy long. If I assume that I place a sell short

[13:09] order here, then this XRP rill should go down. Ok XRP rill should go down. Ok ? But if it is currently running at 2.2 and starts ? But if it is currently running at 2.2 and starts going up and while going up it

[13:23] crosses 3.2 USDT, its price is currently running at 2.2. If it crosses 3.2 then my order will be sold immediately. I will lose 2.1 USDT here. This is how the liquidation price works. Liquidation Price as the name suggests, means

[13:39] that my order will be liquidated as soon as this price is reached. Ok? Let me show you this thing here also. For example, if I increase the margin here to 22, then see, the liquidation price comes even closer. Look,

[13:54] I had selected 15 USDT here, 15% of my 15%, how much was it earlier? How much is it now? Earlier it was 3.2, now the selling here has become 2.9. Meaning it came closer. The

[14:06] liquidation price remains in the opposite direction. If I took a sell short, it should go down, so the liquidation price would be sitting above it. Like liquidation price would be sitting above it. Like look here, he is sitting above. The current

[14:19] price is 2.29. Liquidation price means sitting above 2.9. If I go in the opposite direction and sitting above 2.9. If I go in the opposite direction and sold and it is sitting below here. Ok? The order should go up to Buy

[14:35] Long. If it starts going down and crosses 1.5 then the order will be sold and the 2.2 2.0 USDT that I have given as margin will be lost to me instantly.

[14:47] Basically there will be a loss. The order will be liquidated. So, I have told you this in brief at a beginner friendly level what future trading is here at Binance. What all things work here in what ways.

[15:03] You can see. The main three or four things are that the first one is margin. The second is the things are that the first one is margin. The second is the liquidation price. The third is leverage. These three terms are very important for you to know. The margin which will actually be yours, the

[15:18] cost which is coming written as 2.2, this is my margin which will be deducted from my wallet, okay here if two USDT are deducted from 13 USDT then 11 will remain, so this is the margin, secondly the liquidation price which is here is 1.59, it is coming written as 1.59, meaning as soon as this

[15:35] price is reached the order will be liquidated, the entire order will be sold, will be executed and I will incur a loss on the margin given here, thirdly I had said leverage, the leverage is coming written above. The more leverage I take, the

[15:49] less margin I will have to pay. But the chances of my order being automatically sold will increase significantly as the liquidation price gets closer to what it is. liquidation price gets closer to what it is. Ok? I have tried my best to

[16:03] explain all these terms to you completely here. other things like placing orders, buy sell, buy long and sell short,

[16:15] I have already told you about this. Buy long means that your order here should go up. Then you will make profit. Meaning, if according to you the order price of that coin should go up then you take buy long. Otherwise you can place the order by clicking Sell Short here.

[16:30] So if the order goes down, you make a profit. Ok? In these upcoming videos, we are going to

[16:42] understand here. So for that you must subscribe to the channel and if you have then you can definitely do it. The original Binance download link is in the description. You Please like our video. Please subscribe to our channel and I will meet

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