How to Use Binance Futures? A Step-by-Step Guide

Binance Futures is one of the most advanced and widely used cryptocurrency derivatives platforms in the world, offering traders the opportunity to profit from both rising and falling markets. 

Whether you’re a beginner looking to understand the basics or a seasoned investor exploring advanced tools like leverage, funding rates, and risk management, this guide will walk you through everything you need to know to get started with Binance Futures, from setting up your account to executing your first trade safely and strategically.

What are Futures Contracts?

Futures contracts are a type of financial derivative that allow traders to speculate on the future price of an asset, without needing to own the asset itself. In the world of cryptocurrency, futures enable users to profit from both rising and falling markets by entering long or short positions. 

These contracts typically have an expiration date and are often settled in cash or crypto, depending on the platform. Futures trading is popular among advanced investors for its leverage, flexibility, and potential for hedging against market volatility.

What is Binance Futures?

Binance Futures is a derivatives trading platform operated by Binance, the world’s largest cryptocurrency exchange.

With leverage of up to 125x and a diverse range of contracts (USDT-M and COIN-M), Binance Futures has become an increasingly popular tool for professional traders looking to profit from price volatility.

Moreover, before using Binance Futures, you need to understand the concepts of Long/Short:

• Long (Buying Long): You expect the asset’s price to rise in the future. If your prediction is correct, you can sell it later at a higher price to earn a profit.
• Short (Selling Short): You expect the asset’s price to fall. You sell the asset at the current price, then buy it back at a lower price to lock in gains. This is a major advantage of derivatives trading, as it allows users to profit even when the market is declining.

Why Futures?

Unlike spot trading, where profits are generally tied to long-term asset appreciation, futures allow you to actively trade market volatility. This makes them a preferred instrument for traders who thrive on momentum, news-based movements, or technical patterns. Whether the market is going up or down, there are opportunities to earn — if you can predict the direction accurately.

Used responsibly, futures can deliver exceptional returns. In fact, the global crypto derivatives market has seen explosive growth in recent years. According to recent data:

• Over 70% of daily crypto trading volume now comes from derivatives, with Binance Futures consistently leading the market.
• In countries like South Korea, Vietnam, and Turkey, the usage of high-leverage derivatives has surged among retail investors looking to amplify small capital.
• Binance Futures alone processes billions of dollars in volume daily, a testament to how many traders rely on it for active short-term strategies.

More than just a trading tool, Binance Futures offers a suite of features designed for modern crypto traders: low fees, deep liquidity, risk management tools (like Stop-Loss and Take-Profit), and an intuitive user interface. These elements make it a solid starting point for anyone looking to take advantage of short-term market swings — from seasoned professionals to motivated beginners.

Read more: Trading with Free Crypto Signals in Evening Trader Channel

Create and KYC Your Binance Account

Users should visit the official Binance website to register an account and complete identity verification (KYC) if they haven’t done so already.

Once logged in, navigate to the “Derivatives” tab on the main menu and select either “USDT-M Futures” or “COIN-M Futures” depending on your trading preferences. Binance will require you to enable 2FA (Two-Factor Authentication) to enhance account security.

Deposit Funds into Your Futures Wallet

To start trading, users need to hold a stable asset such as USDT in their Spot Wallet. If you don’t have USDT yet, you can purchase it via Binance’s P2P Trading feature, which allows you to buy USDT using USD or other popular payment methods like bank transfers.

Once you have USDT in your Spot Wallet, you need to transfer it to your Futures Wallet to use it for trading futures contracts. Go to the “Wallet” section, select “Futures,” click on “Transfer,” choose the asset type (e.g., USDT), and enter the amount you wish to transfer.

Types of Contracts and How to Choose

Binance Futures offers two types of contracts:

• USDT-M Contracts: These are derivative contracts that use USDT as the margin asset. Users only need to deposit USDT to trade a variety of assets such as BTC, ETH, BNB, and more. This is the most common and beginner-friendly option, as it simplifies profit and loss calculations by using a stable-value unit (USDT).
• COIN-M Contracts: These contracts use the underlying cryptocurrency (e.g., BTC or ETH) as both margin and settlement asset. COIN-M is better suited for long-term holders who want to increase their coin holdings through leveraged trading, rather than focusing solely on their value in stablecoins.

The choice between contract types depends on your risk appetite and trading strategy. If you prioritize stability and transparent capital management, USDT-M is the ideal choice. On the other hand, if you have strong confidence in your base asset and want to optimize returns in coin units, COIN-M may offer better long-term value.

Interface and Key Components

The Binance Futures trading interface is designed to give users full control over their trading decisions while displaying essential market data in real time. Here’s a detailed breakdown of its key components:

• Order Book: Located on the left side of the interface, the Order Book shows live bid (buy) and ask (sell) orders at different price levels; order depth and liquidity around the current market price
• Trade History: Below the Order Book, the Trade History panel displays a running log of recently completed trades on that contract; execution price, size, and direction (buy/sell).
• Order Placement Panel: On the right-hand side, this is where you place new trades. You can choose order Type: Market, Limit, Stop Limit, Stop Market, or Take-Profit/Stop-Loss combinations; leverage: from 1x to 125x, depending on the pair; position size – input how much of the asset you want to trade; TP/SL Settings –  optional but highly recommended to manage risk.

Basic Order Types

• Market Order: This order is executed immediately at the best available market price. It’s ideal for traders who want to enter or exit a position quickly without being too concerned about the exact execution price.
• Limit Order: This allows users to set a specific price at which they want to buy or sell. The order is only filled when the market reaches that price. It’s preferred when you want precise control over your entry or exit point – commonly used for entering at a desired level or taking profits.
• Stop-Limit Order: A combination of a conditional order and a limit order. When the market hits the stop price, the system places a limit order. Traders often use this type of order for stop-losses or to confirm breakouts.
• Stop-Market Order: Like a Stop-Limit, but once the trigger price is reached, the system converts it into a market order and fills it immediately at the current price. This helps exit positions quickly in urgent situations.
• Take Profit (TP) / Stop Loss (SL): Binance allows users to pre-set TP and SL levels when opening a position. These tools help minimize risk and automate exit strategies, making them essential components of leveraged trading risk management.

Setting and Adjusting Leverage

Binance Futures allows users to adjust leverage from 1x to 125x depending on the trading pair. Before opening a position, you can click the icon next to the trading pair name to set your preferred leverage level.

Higher leverage increases risk, so beginners should start with low leverage — around 3x to 5x — to manage risk more safely.

Managing Positions and Monitoring Liquidation Price

When opening a position, users must monitor the liquidation price — the system will automatically close the position at this price to prevent a negative balance.

The system liquidates your position immediately if your Margin Ratio reaches 100%, indicating a critical risk level. To avoid this, you should either add more margin or adjust your position if the ratio approaches a critical level.

Trading Fees and Funding Fee

Binance uses a maker-taker fee model. If you place an order that adds liquidity to the order book (maker), you’ll pay a lower fee, around 0.02%. In contrast, if you match an existing order (taker), the fee is higher – approximately 0.04%, depending on your account level.

In addition, traders should pay close attention to the Funding Fee, a mechanism designed to keep Futures prices aligned with Spot prices. Traders on opposite sides of the market – long (buy) and short (sell), exchange funding fees every 8 hours.

• Positive Funding Rate (e.g., +0.01%): Long positions pay the fee to short positions. This typically happens when the market is bullish and long positions outnumber shorts.
• Negative Funding Rate (e.g., -0.02%): Short positions pay the fee to long positions. This usually occurs in bearish markets where shorts dominate.

Example: If you open a long position worth 100,000 USDT in BTCUSDT with 10x leverage, and the current funding rate is -0.03%, you would receive 30 USDT from short traders every 8 hours (as long as you maintain the position). Conversely, when the funding rate is +0.03%, you pay 30 USDT every 8 hours.

Funding fees are variable and can fluctuate significantly depending on the difference between Futures and Spot prices, as well as overall market sentiment. Therefore, it’s crucial to monitor the funding rate before opening a position and carefully plan your holding duration to avoid unnecessary losses or profit erosion from negative funding.

Important Notes for Beginners

While this guide focuses on the Binance Futures interface, it’s worth noting that most major centralized exchanges offer similar futures trading products. The core functionalities, such as leverage, contract types (USDT-M, COIN-M), and order types are largely consistent across platforms. 

This means that once you’ve familiarized yourself with how futures work on Binance, transitioning to other exchanges should feel seamless.

For beginners, starting on Binance is a strategic choice. As the exchange with the deepest liquidity and the highest daily derivatives trading volume, it offers smoother trade execution and tighter spreads, essential factors when dealing with high-leverage instruments. Binance also provides extensive educational content and risk management tools to support new traders.

Once you’ve gained experience and confidence, you can explore other reputable platforms that offer competitive futures products, such Bybit, OKX, Kucoin…

Read more: Binance Review 2025: Is It a Legit and Trustworthy Exchange?