Cryptocurrency is a space that is increasingly becoming more attractive to investors daily. It first brought the onset of digital assets in the form of crypto coins that users can hodl and gain. Then, there was the rise of crypto trading and tokens. Then, DeFi arose to create a new way of making a profit in the crypto space. Now, there are DAO, NFTs, staking, and many more ways to invest in crypto. But like with every investment, the investor must know how to maximize profits for the best results.

For the crypto space, investors can maximize profits through the sale of cryptocurrency in the market. The industry is so diverse, dynamic, and volatile that there are various ways to sell crypto to make money from it. Thus, before getting into crypto, you must know how to make a profit by selling your crypto, rather than just buying crypto.

Thus, this article will talk about how users can maximize their crypto and make profits when selling cryptocurrency. But as stated before, there are various ways to do this. So, this article will only focus on one simple and popular means known as futures trading. This is a very profitable means in crypto, but one that requires proper knowledge. So, what is futures trading?

What is Futures Trading?

Futures trading is one of the best ways to maximize profit in crypto. It is a process by which crypto traders utilize the magic of leverage to gain in the market. Futures is simply an agreement or contract to purchase or sell an asset at a later period at a specific price. So, you place the order to buy or sell later at a particular price, without risking your entire capital.

Also, futures trading helps crypto traders make a profit without owning or holding that particular asset. All you are doing with futures is setting a contract that speculates on the future value of an asset. You can speculate that the price of an asset would rise by going long on it or that it will drop to a certain price by going short. So, crypto future trading is a means by which traders can increase profit using leverage and trade an asset without owning the asset, minimizing risk.

Making Profit by Selling through Futures Trading

The beautiful thing about future trading in crypto is that traders can make a profit either by selling or buying. So, by going short on an asset you can make a profit if the price drops as predicted.

Futures trading is tricky in that it makes use of leverage. Yes, leverage is capital efficient, meaning you do not have to use your entire capital on a trade. Thus, hedging you against possible loss and helping you lock in profits. But just as leverage increases a crypto traders’ potential for profit, it equally increases their potential risk. Leverage works both ways.

Crypto exchanges can give you leverage of up to 50x in futures trading. This looks like a good deal as it can significantly increase your gains, but it can also equally enlarge your loss. Thus, when using leverage in futures on platforms like Kraken and Binance future, it is advisable to go with 2x-5x leverage. In rare cases, you can go a maximum of 10x. This is the best trading approach that would help you minimize loss/risks, while also ensuring that you maximize profits when the market goes in your direction. But the crypto market is very volatile, so unexpected news can change the direction of the market. It is better to have a safe trading strategy rather than an all-out approach that breeds disaster.

Conclusion

In summary, crypto futures trading is a unique means through which traders can make a profit. One can simply make a profit by shorting BTC or eth, and you make a profit if the price of these assets reduces to the speculated price in the speculated period. But be careful with futures trading, as it is more volatile than spot trading because of the use of leverage. So, ensure you have a safe trading approach and use 2x-10x max leverage. 

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