Futures Market Lesson 1: Cross Mode, Isolated Mode, and Leverage

[00:02] hope you're all well. I decided to record a series of three lessons about the Futures Market by Hans. I'm seeing that a lot of people are coming to this type of market, the futures market, and that raised a

[00:16] red flag for me because it's a much riskier market. If you don't know how to work correctly, there are some peculiarities within the futures market that, if you don't know what you're doing, you

[00:30] can end up blowing your account and losing the capital you have allocated for your operations. So, your operations. So, I've put together these lessons so

[00:44] you can learn the correct way to do things, what they're for, what the differences are between the futures market and the spot market, and what the specific characteristics are. I'm going to teach you everything step-by-step in these three

[00:58] lessons. making a disclaimer here: if you're a

[01:13] beginner investor or trader starting in this starting in this market, be very careful. market, be very careful. I always say, if you're new to the

[01:25] spot market, learn how to do it first. What you do is gradually bring part of your capital into the futures market to carry out your operations, because if you don't know how to do it correctly, you have

[01:40] a very high risk. Okay, but let's go, I'm going to pull out but let's go, I'm going to pull out my notepad because I want to put everything we're going to talk about in our classes here. So we're going to talk

[01:53] about balance filters, the futures market, and what we're going to do in our classes. Well, first, whenever we enter the

[02:05] futures market, we already start to see some differences. The first one is that there are two ways we can work: the Cross mode we can work: the Cross mode and the isolated mode. So let's talk

[02:21] about that, let's talk about leverage. You can leverage your capital from 1x to 125x depending on the cryptocurrency you're

[02:34] 125x depending on the cryptocurrency you're trading. What has the biggest difference is trading. What has the biggest difference is the possibility of profiting from both rising and falling prices. So you can trade long,

[02:48] falling prices. So you can trade long, or buy, or buy, and you can short, and you can short, or sell.

[03:02] And that's one of the main differences: when you come to the futures market, you don't... It doesn't matter if the market is going up, down, or sideways; whatever is happening, you can profit from it in every way. If it's already going up,

[03:17] you buy and profit from the rise; if it's falling, you sell and fight the fall. Okay, I'll talk more about that later. Here, we have to consider the differences in leverage and motocross rates. There are

[03:32] some differences in fees, okay? The fees differ a bit, but that's not the focus here. fees differ a bit, but that's not the focus here.

[03:56] I could talk about that, but I don't know much about it; it's not the focus here. Okay, and the orders... there are some differences in how you place orders here in the futures market. So, first of all, let's talk about motocross in isolated mode. field open, and the first thing you can see that we always need to choose whether we want to

[04:12] work with Cross mode or isolated mode, and we also have to choose isolated mode, and we also have to choose leverage, which ranges from 1x to 50x in the case of BTC/BSD. Okay, if we go to another platform, we'll

[04:26] obey the SBT, for example. So, you can already leverage up to leverage up to 125x, you can see it here. So difference? What is this? So, let's go, folks. First of all, I

[04:42] want to show you how So, as I said before, if you have $100 in your futures trading account and you're only going to leverage 1x, you're practically without

[04:59] leverage because you're exactly with the value you have. Let's say you want to buy Bitcoin now, and you want to buy 0 % of what you have, with a leverage of 1x, meaning you'll

[05:14] buy $100 worth of Bitcoin, which is all you have at home. Okay, if you want to buy the same amount, always using your capital, but in this case with 10x leverage, you'll be able to

[05:30] this case with 10x leverage, you'll be able to buy up to $1000 worth of Bitcoin. In other words, you'll be able to buy ten times more than you have. You only have dollars, but with a leverage of 10x, if you put 0% of your capital there,

[05:44] you'll be able to trade with... $1000 is because he's only going to leverage $100 from $100 of your margin capital and multiply it by 10, meaning in six

[05:56] months $10,000. So you can trade with up to $1000. If you want to trade with up to $1000. If you want to trade with 50x leverage, you can trade trade with 50x leverage, you can trade with up to five thousand dollars. Because you

[06:10] 'll take the $100 you actually have, which you'll use as your margin, and leverage it 50 times. So, 50 times 50 will give you $5,000. And you can

[06:23] do this as much as you want, depending on the cryptocurrency you're using, because maximum leverage changes according to what you're trading

[06:35] changes according to what you're trading

[06:52] with 50,000, or 55,000 dollars, but I only have $100, meaning my profit will be have $100, meaning my profit will be much higher, right? For sure. Okay, so here's the important detail: even though your profit will be greater, your

[07:09] loss will be much higher if your trade goes against you. think about this: if I'm leveraging here with these, I enter

[07:24] a trade with $100 of margin, leveraging 10 times, I'm trading leveraging 10 times, I'm trading with $1000. What happens if this trade goes back one percent? Let's

[07:37] say I bought a certain crypto at $10, and from the moment I bought it at ten dollars, it started to go back one percent. This means I'm no longer at a

[07:53] This means I'm no longer at a 'm at a loss of 10 percent. Because every percentage point will always multiply by 10. So if it goes back one percent, I 'm already losing 10%, if it goes back two

[08:08] percent, I'll be losing 20 percent, and so on, three percent, percent, and so on, three percent, 35%, 50%, and until it reaches a value where it's 10% negative. In other words, the

[08:25] value I put in is negative. $100 is almost gone, it's actually finished. EA Baiana will automatically close your operation because it has already used

[08:37] all the margin you had. You had $100 in your operation, you bought at ten, so the operation is going back 10%, meaning you are losing $100 of the meaning you are losing $100 of the operation. What is that? Because 10

[08:51] percent of a thousand is $100. Ah, so you are losing all your margin there, and below that, it will leave you owing money to it. Obviously, it will automatically close your operation and you will have lost the dollars

[09:05] you put to work with the futures market. Okay, so it's very important for us to understand this because it seems, right? When we discover

[09:17] that we can work with a much larger value than we actually have, we get very excited and think, "Wow, this is a place where if I buy $1000 and the market moves 10 percent ahead, I will have made 0.5 percent of the

[09:30] capital. The $100 will become $200, right? I'll double my capital, right?" That's very good, but turns against you, you'll end up with much bigger losses, so that's why

[09:42] we need to know how to operate correctly. correctly. So, folks, that's the advantage: you can leverage your capital from 1x to 100x.

[09:55] You'll earn much more, but you can also have a much bigger loss. So, have a much bigger loss. So, if you're a beginner trader coming to this futures market,

[10:08] if you work with only 1x, it's the same as working in the spot market. You won't have the advantage; you 'll be working with the real value you actually have. Okay? And now,

[10:21] folks, there's a difference. We've already talked about leverage. And now we have to talk about Cross mode and isolated mode. In isolated mode, let's go back to the point where you're going to work with

[10:36] 10x leverage. So, you're leveraging 10 times, but of the $100 you have, you times, but of the $100 you have, you won't use 100%; you'll only put $50 in this operation, leveraging 10 times. Hi Sara, operating with...

[10:50] $500 is... And you still have another $50 that's not in operation, okay? I only put not in operation, okay? I only put $50 into this operation. Well, if you 're in isolated mode, from the moment you're losing $49, it hits

[11:06] $50, your operation will be automatically closed because the margin you allocated to that operation will be exhausted, automatically closed because the margin you allocated to that operation will be exhausted, automatically liquidate your position because the margin you

[11:20] because the margin you allocated to that operation has run out, okay? And then you'll allocated to that operation has run out, okay? And then you'll only have the $50 you have left. This isolated mode is the safest way to operate here in the

[11:33] Minas Gerais market, in the futures market, okay? Because you don't lose any other values ​​besides the value you allocated to that operation, and in this case, we're saying we allocated $50 to that operation, okay?

[11:49] And now, in Cross mode, folks, it's different, okay? Because if you decide in your mind to lose $50, but you have another $50 there in the base, in the wires that aren't in operation, if your operation comes in, right, 10

[12:03] percent negative, you're operating 10x leveraged in another operation, right, negative expression, you will have lost $50, but otherwise, you won't lose anything. Liquidating $50, but otherwise, you won't lose anything. Liquidating at that moment will start taking

[12:16] the rest of your 50 hours that are in your pocket. So you can suffer a drop, right? If you were limping 10 times, the market can even go 20 percent against you and you won't be liquidated. It's from the moment

[12:32] you lose and have no dollars left that they will call you. So what's the big will call you. So what's the big difference here? The isolated mode doesn't take

[12:44] you put as margin in that operation, and in the pros mode, you take both the margin you put in the operation and the rest of the value that isn't in operations. So that's the big difference. So, always use the isolated mode,

[13:00] always the isolated mode, because I've seen it happen before: you have an operation leveraged 10x, for example, and then the market comes all at once

[13:13] and drops 20 percent, for example, in a matter of example, in a matter of minutes. The market really plummets. If you were in isolated mode, you already knew that you put 50 hours of

[13:27] operation, so if it had gone wrong and went against you, you wrong and went against you, you would be

[13:41] 're only risking $50, so if that happens, you're in Cross mode. You'll lose everything, both the $50 and if you had

[13:53] $1000 in the futures market and you were just leaving it at $50. The more it falls, the more margin you'll be eating into. Not just the amount you put

[14:05] in, but also values ​​that are outside your operation. So, guys, this is the first lesson. I really wanted to focus on these two points. I hope you understood: Cross mode, risk, and leverage. So, that's the

[14:22] first point. The main thing you need to pay attention to, and it's actually the most important point I can say about the futures market, is that this approach

[14:34] can end up ruining your money. You might come into this market excited, thinking you're going to leverage 10 times, 30 times, 40 times, 50 times, because you see several influencers working this way and

[14:47] If you think you can do the same as them, leveraging 10 times a percent of your capital, and then one operation goes wrong, you lose all your money, okay? So,

[15:00] folks, you're going to get into this radical way, like losing all your money. But seriously, folks, be very careful. This has already happened to other people. So, just because you're in the

[15:15] futures market doesn't mean you need to leverage your money irresponsibly. You have to know how to work in the best way possible, and in the this: how much to enter each operation with, how much

[15:30] margin to put in, what size capital you have available to work with, and all of that. So we'll talk about it step by step, very calmly, so you understand it well. Okay, so how's all this going to work? Let's wrap up your

[15:45] first lesson. I wanted to talk specifically about the next step and leverage today, and in the next lesson we'll talk about orders and the types of orders we have here, how we're going to place our buy orders,

[15:57] our sell orders, how we're going to operate long, how we're going to operate short. Okay, so until the next lesson, we're in this together, bye!