How to Trade Perpetual Contracts? A Complete Guide to the Logic and Profit Mechanism of Crypto Derivatives

The basic principles of Perptual Futures

Perptual Futures are a type of derivation based on blockchain assets, with their prices anchored to the underlying assets (such as BTC, ETH), but they do not represent actual ownership of the assets by the user.

Unlike traditional contracts, Perptual Futures do not have a fixed delivery time, which means users can hold positions for a long time. Its price is mainly adjusted through the “funding rate mechanism” to ensure that the contract price remains close to the spot price.

The profit logic of Perptual Futures

In Perptual Futures, users can go long or short:

• Long: If you expect the price of a certain encryption asset to rise, you can open a long position. If the price rises, the difference between the buying price and the selling price is your profit.
• Short: If you expect the price to fall, you can open a short position. If the price does indeed fall, you will profit from the price difference.

By setting leverage multiples (such as 5x, 10x, 20x), users can leverage small funds for greater returns. For example, trading 100 USDT with 5x leverage on Gate is equivalent to operating a 500 USDT contract.

Gate Perptual Futures Trading Type Analysis

On the Gate platform, users can trade two types of Perptual Futures:

1. USDT Settlement Contracts (USDT-M): Use USDT margin to settle profits and losses, suitable for most beginners.
2. Coin-Margined Contracts (BTC-M, ETH-M): Use the encryption assets themselves as margin, more suitable for experienced traders.

In addition, Gate supports various order types such as market orders, limit orders, and take profit/stop loss orders to meet different trading needs.

How to open and manage Perptual Futures positions?

Step 1: Deposit USDT or the required currency into the contract account

Step 2: Select trading pair and leverage multiple

Step 3: Place Order

Step 4: Position Management

Step 5: Set Take Profit and Stop Loss

Tips and tools for using Gate

Gate not only provides a powerful Perptual Futures trading system, but also offers the following useful tools:

• Simulated trading system: Experience contract operations in a risk-free environment.
• Funding Rate Calendar: Predicts the upcoming funding settlement times and ratios.
• Market Alert: Set price trigger reminders to grasp market changes in real time.
• Long position support: Supports opening long and short positions for the same variety simultaneously, suitable for advanced strategy trading.

Frequently Asked Questions and Misunderstandings

1. Q: Are Perptual Futures guaranteed to make a profit?
   A: No. Although it can be operated in both directions, there is also a risk of liquidation.
2. Q: Is higher leverage better?
   A: High leverage means high risk, suitable for short-term experts, beginners should start with low leverage.
3. Q: When is the funding rate paid?
   A: Gate settles every 8 hours, and the funding rate is only accounted for when holding a position.

Beginner’s Pitfall Guide

• Do not operate with a heavy position to avoid liquidation due to a single market fluctuation.
• Do not frequently chase the rise and kill the fall, stay rational, and execute a fixed strategy.
• Keep an eye on the funding rate to avoid unnecessary costs;
• Practice more with simulations and try small amounts in the real market to accumulate experience.

In addition, Gate provides a detailed help center and 24-hour online customer service to ensure that every user receives effective support during the trading process.

Summary

Perptual Futures is a high-risk, high-reward trading method suitable for investors with a certain degree of market judgment. Taking Gate as an example, it not only has stable trading and transparent fees, but also comes with multiple risk control tools to help users reduce operational difficulty.

For beginners, mastering the basics, understanding the core mechanisms, and combining them with the convenient experience of the Gate platform is an ideal way to start on the path of contract trading.