I-
What
is a USDT standard perpetual contract ?
USDT perpetual contracts are
digital tokenized securities that look like cash but with a fixed price.
Perpetual contracts are
different from standard, non-perpetual cryptocurrency contracts in that they follow
a specific formula and last for a specified period.
Perpetual contracts can only
be bought and sold at a particular price, allowing traders to lock in profits
or limit losses.
Additionally, perpetual
contracts are popular with traders who want to minimize risk and maximize
profit.
These types of contracts are
also called fixed price perpetuals or standard USDT.
A typical USDT perpetual
contract has an expiration date and is bought and sold daily at a fixed price.
For example, a trader could
buy 10 BTC perpetual contracts for $10,000 per contract with an expiration date
in six months.
After the expiration date, the
trader would lose all the value he put into the contract unless he sold his
holdings before that date.
Since the holding period is
based on the price at which they bought their contract, selling near the end of
the term would generate maximum gains while limiting losses.
In contrast, USDT perpetual
contracts are popular with traders who want to minimize risk and maximize
profit.
Since there is no market
volatility when trading USDT perpetuals, profits can be substantial, especially
when selling towards the end of their duration versus buying towards the
beginning of their duration. duration.
Some traders use their regular
bank account to buy USDT perpetuals by paying additional fees for faster
transfers or opening multiple accounts for different cryptocurrencies.
Then they transfer their funds
to the USDT perpetual contracts account where they hold all of their purchased
contracts in a single wallet address, so they can easily sell or buy as needed.
This method limits risk since
all funds are immediately transferred to the contract wallet upon purchase and
cannot be lost in the event of transfer delays or payment errors from banks or
payment processors.
Unlike spot cryptocurrency
transactions where the value is always converted into local currency at the
present moment, USDT perpetual contracts allow traders to turn dollars into
tokens whenever they want.
This feature makes USDT
perpetuals similar to spot cryptocurrency transactions in that both allow users
to convert local currency to crypto whenever they have funds available without
incurring transaction fees or commissions.
However, while dollar-convertible
cryptocurrencies trade like conventional securities on a few cryptocurrency
exchanges like Coinbase, USDT perpetuals do not trade on traditional exchanges
like this because the tokens cannot be easily liquidated, via fiat currency
transfers or banks without incurring a large loss due to volatility between
dollar and token prices.
Cryptocurrency perpetual
contracts follow a fixed formula that determines the amount of money that can
be exchanged over an agreed period of time, much like money that can only be
changed through transaction fees with local banks up to upon its expiration at
the end of the year, unless repaid by its holder through annual fees paid in
coins using precious metals such as gold or silver coins as security for
payments taxes of said year (the basis of our current coinage system).
Although not as well known as
other types of cryptocurrency investments such as ICOs (Initial Coin
Offerings), perpetuals have proven to be safe investments suitable for both
novice and experienced investors who want returns maximum without risking
capital unnecessarily.
II-
How
to trade USDT standard perpetual contracts ?
Many users are interested in
trading USDT standard perpetual contracts, which are contracts that allow you
to buy or sell USDT at a fixed exchange rate.
Let's see how you can trade
standard USDT perpetual contracts and how it works in practice.
USDT is a stablecoin with a
fixed exchange rate;
It is always equal to one US
dollar.
An exchange that supports USDT
trading is where you can find and trade USDT.
To open an account on the
exchange websites, you must first verify your identity by providing your name
and email address via an online form or scanned documents such as a driver's
license or passport.
After verifying your identity,
you will be able to trade standard USDT perpetual contracts on the platform at
the current market rate.
You can use your Tether
account to buy other cryptocurrencies such as Bitcoin or Ethereum before
exchanging them for real US dollars using an exchange like « Huobi ».
Keep in mind that not all
exchanges support direct dollar transfers from cryptocurrency wallets, so be
sure to research which one you will be using before opening a USDT account on
this exchange form.
Trading USDT standard
perpetual contracts has both advantages and disadvantages over buying and
selling regular cryptocurrencies, as it requires proprietary knowledge of the
cryptocurrency market and actual US dollars in order to simultaneously profit
from the price fluctuations of crypto and fiat currencies.
However, if you understand how
it works in practice, trading these contracts can be profitable if done
correctly.
A solid understanding of
technical aspects such as the price trends of different cryptocurrencies
against real money will help you maximize profits when trading these contracts
by taking advantage of favorable periods for cryptocurrency markets and fiat
currency price.
III-
How
to trade and manage contract risks on « huobi »?
Contract trading is the practice of trading in the cryptocurrency
market without owning the underlying asset.
The most popular
cryptocurrency exchange for contract transactions is «Huobi».
Since «Huobi»
is based in Singapore, they offer fully guaranteed contracts with US dollars.
Unlike other cryptocurrency
exchanges, «Huobi» offers its clients a choice of trading strategies to
mitigate risk.
Many traders use «Huobi»
as a reference platform for trading contracts.
In this article, we will share
some essential knowledge on contract risks and how to effectively manage your
position size at all times.
Initially, you need to decide
whether you want to trade on margin or not.
Margin trading creates more
opportunities for loss due to the leverage feature and lack of control over
your capital.
However, if you have a high-risk
tolerance and have a keen interest in short-term trading strategies, margin
trading may be beneficial for you.
To protect your capital from
contract losses, you should always keep your position size below the desired
profit threshold.
At the same time, limit orders
should be placed at a reasonable price so that your order is not executed too
low or too high relative to the market price at that time.
Contract losses are inevitable
in contract trading, as there is no way to recover lost funds without selling your
positions at a loss.
As mentioned earlier, limit
orders should be placed at a reasonable price so that your order is not
executed too low or too high relative to the market price at that time.
If the market drops
significantly after placing an order that is too high, sell your position
before it reaches a loss threshold. On the other hand, if an upward movement
occurs after placing an order that is too low, then wait until it reaches an
acceptable profit threshold before reselling it at a profit.
In addition to limiting your
losses with conservative limit order pricing, you can also take advantage of
stop-losses and take profits where appropriate to further limit losses while
generating profits above your profit threshold.
All strategies are designed to
help traders make profits without incurring excessive losses along the way!
To maximize profits while minimizing
losses, follow Huobi's recommended strategies when trading these contracts!
However, it requires
discipline and caution in risk management so as not to lose all your capital
earned at the start of this strategy!
IV-
How
to calculate the profit and loss and equity of a USDT standard trading account?
Cryptocurrencies can be traded
in a secure environment and at the same time easily converted to and from
traditional currency.
One of the most famous digital
currencies is Bitcoin, but there are many other cryptocurrencies that can also
be traded.
USDT is one of the most common
cryptocurrencies, which is based on the US dollar.
Although it is pegged to the
dollar, traders can earn good returns trading it.
USDT and USD are essentially
the same thing. Since they both represent US dollars, traders can easily make a
profit by selling their USDT and buying US dollars.
The value of USDT can never
exceed the value of its base currency since it is pegged to the dollar.
However, this does not mean
that trading this cryptocurrency is always profitable.
Since USDT is pegged to the
dollar, its value tends to diverge from that of traditional currency when
investors start selling their dollars in droves.
This happened in the second
half of 2017 when many financial markets were in turmoil due to Brexit and the
Trump presidency.
As a result, people started
selling their traditional silver for fear of losing all their money in the
event of another financial downturn.
This has created a shortage of
dollars against other currencies, which has made it difficult to raise exchange
rates between USDT and traditional currency.
At this point, USDT trading
became unprofitable as people stopped believing that it would have a positive
return like traditional money in the event of a panic in the traditional
financial markets.
While it's hard to predict
what will happen with traditional money right now, it looks like investors have
regained some confidence after Trump's tax reforms drove stock prices higher
for companies to which he is associated.
Based on this information, it
makes sense that trading USDT can sometimes be profitable since this
cryptocurrency and traditional money represent US dollars respectively.
Investors tend to lose
confidence in cryptocurrencies when traditional money declines, as USDT is
essentially digital versions of the US dollar - backed by real tangible assets,
which tend to complement traditional money rather than to simply replace it.
By pegging its cryptocurrency
to a real currency, the dollar, its creator was able to create a stable
cryptocurrency that could complement real money instead of competing with it.
As a conclusion, if investors
regain some confidence in cryptocurrencies again, trading USDT could also
become more profitable again!
To register on «Huobi», please
visit the link below:
https://bit.ly/3AjYpMy
Sources of additional
information:
https://www.huobi.com/support/en-us/list/900000256166