Bitcoin long-selling tutorials, short-selling tutorials, and step-by-step tutorials on how to play perpetual contracts (taking OUYI okx as an example)

The concept of perpetual contract

Before introducing long and short, we must first understand the concept of perpetual contract. A perpetual contract is a special type of derivatives contract. Its characteristic is that it has no expiration date and can continue to trade. , until the position is closed or forced to be closed. They are a financial instrument used for leveraged trading, allowing traders to control larger positions with a small amount of capital.

Perpetual contracts have the following characteristics:

**No expiration date:** Unlike futures contracts, perpetual contracts do not have a clear expiration date. This feature gives you the flexibility to hold a position until you close it voluntarily or by a forced liquidation.

**Funding Rate** In order to maintain a close connection between the price of the perpetual contract and the price of the underlying asset, traders holding the perpetual contract may charge or pay a funding rate. Funding rates are calculated based on the following factors: * The difference between the perpetual contract price and the underlying asset price * Supply and demand situation in the market

**Leverage trading**: Perpetual contracts usually provide high leverage. This type of leverage allows traders to invest less money and control positions of greater value. However, high leverage also brings higher risks. Therefore, caution is required when managing positions and risks.

**Perpetual Contract Margin Requirements** In order to maintain a position in a perpetual contract, traders need to meet the following margin requirements: **Initial Margin:** Traders must pay a certain percentage of the contract value as initial margin to open a perpetual contract. **Maintenance Margin:** Once a position is established, traders must maintain a certain percentage of the contract value as maintenance margin. If the account balance falls below the maintenance margin requirement, the position may be forced to be liquidated.

**For ordinary users, risk information of margin trading:** In short, leverage trading refers to using a small amount of capital to operate a larger asset. For example, if you use $10 to purchase an asset worth $100, your risk increases relative to your original principal because the size of the capital you are manipulating has expanded. Let's say you trade a $100 asset with $10, and if the asset drops 1%, the $100 asset loses $1 in value. However, this drop represents a 10% loss relative to your $10 capital. Digging deeper, assuming the asset drops 10%, a $100 asset will lose $10 in value. At this point, if you only have $10 in capital, you will be at risk of liquidation.

**Newbie exchange reminder:** There are only two formal and trustworthy exchanges in China: **OUYi** and **Binance**. **Ouyi:** Suitable for novice users, with friendly interface and easy operation. **Binance:** Suitable for advanced users, with rich trading varieties and powerful functions. Remember to be cautious about other pheasant exchanges that claim high returns and provide order services. These exchanges usually aim to defraud principals. If you encounter such a situation, please blacklist them immediately. In addition, there are a large number of fake software on the Internet that imitate formal exchange websites and APPs with the intention of defrauding users of their property. **Please be sure to visit the official website of the exchange through the official link of this site. **

Perpetual Contract Long and Short Concept

**Perpetual Contract** As mentioned above, a perpetual contract is a financial contract that allows traders to buy and sell cryptocurrencies with leverage. Leverage is the ability to magnify available margin, allowing traders to control positions worth more than their own capital. **Go long and short** Once you understand the concept of perpetual contracts, going long and short becomes easier to understand. Let’s assume you have $10 and trade $100 of X coins using 10x leverage. **Go long** Going long is betting that the price of a cryptocurrency will rise. This means that if you think the price of X coin will increase, you can buy $1 of X coin. If the price of X coin does rise, your profits will be magnified by leverage. For example, if the price of X coin increases by 10%, your profit will be magnified 10 times to $1. **Short** Short selling is a bet that the price of a cryptocurrency will fall. This means that if you think the price of X coin is going to fall, you can sell $1 of X coin. If the price of X coin does fall, your profits will be magnified by the leverage ratio. For example, if the price of X coin drops by 10%, your profit will be magnified 10x to $1.

The concept of going long is very simple: buy 100 X coins worth $1 for $10. Assume that the price of X coin increases by 10% to $1.1, then you will receive 1.1 * 100 = $110. After deducting the initial investment of $100, your profit is $10. When going long, a 10% gain actually amplifies your gains in the form of 10x leverage, like: 10% * 10 = 100%, which is $100 earned with $10.

**The concept of short selling** The concept of shorting is that you sell 100 X coins worth $1 for $10. Assume that X coins fall by 10% to $0.9 each, then you can buy back X coins at 0.9 * 100 = $90. Your profit is $100 - 0.9 * 100 = $10, which is a profit of $10. As opposed to going long, going short means that the greater the price of the currency falls, the higher your profit will be.

Now that we know the concept of long and short, let’s take a look at how to perform long and short operations in Ouyi.

Tutorial on long and short OuYi

Here we take the APP mobile operation as an example, and the computer operation is similar.

Search for the perpetual contract of the corresponding currency

**Step 1: Search for the perpetual contract** First, enter the perpetual contract of the currency you want to operate in Oyi's search box. For example, here we search for Ethereum (ETH).

**Find trading pair: ETHUSDT Perpetual** In the chart above, we have positioned the ETHUSDT perpetual contract in the red box. Since our funds are mainly USDT, we chose this trading pair. In addition, we chose the perpetual contract type in the contract.

Enter the trading pair interface to view transaction data

The second step is to go to the details page of the trading pair. Pay attention to the ETHUSDT perpetual trading pair at the top. The purpose of this interface is to let you see various data indicators. Each data indicator They all have great reference significance. This part needs to be studied by yourself. It is particularly important. After confirming this, click directly on the transaction below to enter the transaction interface.

Enter the transaction interface to execute the transaction

The third step is to enter the transaction interface. After clicking the transaction, you will enter the following interface. There are many items that need to be explained in detail.

Cross position, the first concept is full position, click the drop down and there will be an isolated position, then the concepts of cross position and isolated position are that one is the operation of all funds, the other is to divide part of the funds to operate, the advantages of full position That is, the liquidation point is relatively high. The advantage of isolated positions is that the capital loss is limited and will not lead to all positions being liquidated.

20.00x, this is the operating leverage multiple of the perpetual contract. This part is what is introduced above. How much capital do you use to operate the multiple of the capital? 20 times means that with 10 US dollars, you can operate 200 US dollars of assets. , but the increase of ETH will be expanded by 20 times. Assuming that ETH increases by 1%, then your increase will be 20%, so derivation.

Price, the concept of price, is your opening price, your expected opening price. For example, the current price is 3066.68, and I hope to open a long position at 3067.2. At this time, the transaction will be completed directly. Suppose you open a long position below the price of 3066.68. Then it will directly wait for your target price to be completed and enter the pending order list. In the same way, if you open a short position below 3066.68, the transaction will be completed directly. If you open a short position above 3066.68, you will enter the pending order list and wait for the transaction.

Quantity, here is the quantity you want to buy. There may be a situation where 0 USDT is available, which is the situation in my screenshot. This is because your funds are in the capital account but not in the trading account. You need to click on the right + button to transfer funds to the trading account. After the transfer, there will be an estimated maximum opening quantity, which you can calculate yourself. For example, if the current price is 3066.68, then 1 ETH is 3066.68, and 0.1 ETH is 306.68. Just calculate it like this, and you will know how many you want to buy.

To open long, the price has already stated the opening of long and short, so here we can take a look at the status of my long pending order. The picture below is to open long below the current price, so it will wait for the transaction.

Open a short position. The picture below shows a short opening position that is higher than the current price and will also wait for the transaction.

Position & closing, in order to demonstrate to everyone, I bought it directly, and then we can take a look. Currently, I have opened a short sale of 0.1 ETH, so my assets are -308.328, and I only have 20 US dollars. Margin, so the position here will prompt my liquidation price, such as the picture below

In the picture above, we can see the estimated liquidation price, because I only have a margin of 20 US dollars, so assuming the price reaches 3267.95 , then the amount of my loss is

(3267.95 - 3083.28) * 0.1 = 18.467 US dollars

Some people may ask here, why is it not directly equal to 20 US dollars, but 18.467 US dollars? The core reason here is that liquidation is necessary There is a handling fee, and this handling fee needs to be deducted from your own principal, so your liquidation price will be slightly lower than the $20 margin.

Close position & close position at market price. There are several concepts here: stop loss, take profit, position closing and market price closing. Among them, stop loss and stop profit are relatively easy to understand. You can set a target price yourself to automatically place an order and complete the transaction. . Closing a position is actually relatively easy to understand, that is, you set a price to close the current position. During the process of closing the position, you can also set the closing quantity. The key point here is to close the position at the market price. This is a very problematic point. Closing the position at the market price will result in extremely expensive handling fees. Therefore, novices should not use this option easily, and it will cause your losses to become larger and your profits to be smaller. The best thing is to complete the pending order.

The above is the detailed content of Bitcoin long-selling tutorials, short-selling tutorials, and step-by-step tutorials on how to play perpetual contracts (taking OUYI okx as an example). For more information, please follow other related articles on the PHP Chinese website!