What is the loss limit in futures trading?

(in the name of god) what is the loss limit in futures the limit of loss is one of the obligations of every transaction that a trader starts. Without a loss limit in futures trading but maybe you don’t know what is the limit of damage and what is its use.

what is futures trading?

before we want to introduce the profit limit it is better to familiarize ourselves with futures transactions. Futures transaction as their name suggests there are transactions whose effect and results are determined in the future. in these transactions you specify that for example bitcoin moves up from the price of 30 thousand Dollars and for every percent that bitcoin moves above the price of 30 dollars you  make a profit and any percent age that moves lower is a loss.

but get to know the two factors in futures trading:

1_Leverage 2_ the possibility of short

leverage in futures is like a double _edged sword it can multiply your profit and your loss if you use double leverage your profit is double for every percentage and your loss is calculated in the same proportion. If you use leverage 5 your profit will be 5 times for every percentage your loss is calculated according. Yes as you have noticed in futures trading you can also profit from the price drop wich is called a short trade.

Why should we specify profit and loss limits in futures transactions?
What is the loss limit in futures trading?

what is the limit of loss?

As we explained at the beginning of the article loss limit in one of the obligations of every transaction according to the traders when the trade opening button is pressed the loss limit should be set for 10 seconds after that and otherwise you should imagine that transaction as liquidated .the loss limit basically acts as a guarantor against you. You may enter into a transaction and loss money and your greed will tell you to open the transaction and enter the profit and you do the same but it’s an emotional decision and your at a Loss.

So this is where setting a loss limit can help you curb your emotions.

But what is the limit of damage is as follows:

Suppose you have a long trade where you believe the price will rise you open on Bitcoin. The opening price of your transaction is 30 thousand Dollars and the amount of your transaction is 100 dollars. Your leverage is also 5, in this case if the price of Bitcoin increases by 20% you make a profit of 100dollars and if it decrease by 20% you lose all the capital of 100dollars entering you trade. Why? Because your leverage is 5 and 5×20=100

You don’t want to loss 20% and losses your entire 100dollars. Having said that with your technical knowledge you will notice that if the bitcoin format falls below 29500. So he set his loss limit at 29500 which is equal to about 2 percent and if the price of bitcoin reaches that figure you lose 10 dollars and the trade is closed. 👉https://turboplaycrypto.com  what is the loss limit in futures trading 👈

What is the volume of futures transactions?

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