Futures
Responsible Trading with Binance
Binance encourages our users to trade responsibly. Trading can be engaging and fun, but trading is a serious business and it can lead to financial and emotional distress. Trading derivatives carries risk, and furthermore, crypto assets and other crypto assets often have high levels of price volatility.
Responsible trading is about exercising control over your trades and taking accountability for your actions. Trading responsibly also means acknowledging when you may not be suited for trading. Responsible traders do not go beyond their means. In other words, you should never risk funds you cannot afford to lose.
At Binance, we have established several features and guidelines to help users trade responsibly and make informed trading decisions. Here are some tips and good practices that will help you be a more responsible trader:
At Binance, we have established several features and guidelines to help users trade responsibly and make informed trading decisions. Here are some tips and good practices that will help you be a more responsible trader:
Practicing Self-Discipline
In trading, self-discipline means telling yourself to avoid unhealthy excesses like compulsive trading or gambling. At Binance, we encourage users to practice self-discipline, especially when they feel pressured by losses or a losing streak.
Continuously Educating Yourself
Binance has continuously worked towards educating its users on every aspect of crypto trading, from the underlying technology of crypto assets to the complexities of derivatives trading. Our educational content is freely available on Binance Academy, Binance Research, Binance Blog, and FAQ guides.
Protecting Your Capital
Risk management is crucial to every traderâs success. It helps you avoid outsized losses and protects your trading capital. On the Binance trading interface, we have established risk management features such as stop-loss orders to help users manage the risk in individual trades. Learn more about risk and money management in our blog post.
Anti-Addiction Notice
Binance has established several procedures to remind traders of impulsive trading behavior. For instance, when a trader experiences a losing streak or suffers a heavy loss, we continuously remind them of the risk involved in derivatives trading and encourage them to hold back on trading activities.
As a responsible trader, it is critical to keep yourself in check and ensure that you have procedures to avoid harmful excesses like compulsive trading or gambling.
Our system-generated notifications constantly remind users of the dangers of compulsive trading and the risk involved when trading more complicated products like derivatives.
As a responsible trader, it is critical to keep yourself in check and ensure that you have procedures to avoid harmful excesses like compulsive trading or gambling.
Our system-generated notifications constantly remind users of the dangers of compulsive trading and the risk involved when trading more complicated products like derivatives.
Available in:
Options
Cooling-Off Period Function
Futures
When traders face a losing streak, it may be challenging to turn the tide and stop the bleeding. In these situations, traders must know when to stop and avoid compulsive trading behaviors. Sometimes, the best trade is no trade at all.To encourage self-discipline and responsible trading, Binance launched the Cooling-off Period function for users to temporarily disable derivative trading activities and abstain from compulsive trading behavior.
Even with this feature available, traders must continue to practice responsible trading independently, which calls for having complete control over their trades and taking responsibility for their actions.
Margin
The Cooling-off Period function is also available on margin trading. Margin traders can temporarily suspend margin-trading-related activities including isolated or cross margin trading, and the borrowing of crypto assets for a specific period.This feature allows you to limit and control your trading activities, especially in situations when you feel pressured by losses. It also enables you to abstain from behavior and activities that can lead to irresponsible trades.
Once the Cooling-off Period is enabled, it cannot be lifted and will only terminate after the preset cut-off time. During this period, all trading features and confirmation buttons will be disabled.
Available in:
Futures
Margin
Price protection
Users also have access to advanced risk control features such as price protection, which protects users from potential market manipulation. When enabled, this feature prevents bad actors from exploiting market efficiencies to trigger stop-losses or take-profit orders of other users to their disadvantage. Therefore, Binance strongly recommends the Price Protection feature to safeguard your positions especially when the market is extremely volatile. Find more about how to enable the Price Protection feature on our FAQ page.
Available in:
Futures
Insurance Funds
Other safety features such as insurance funds protect users from adverse losses. Insurance funds are safety-nets that protect bankrupt traders from adverse losses and ensure that the profits of winning traders are paid out in full. The primary purpose of an insurance fund is to limit the occurrences of auto-deleverage liquidations (ADLs). Due to the volatility in the crypto markets, and the leverage offered to clients, it is not possible to fully avoid auto-deleverage liquidations. In order to provide the best possible client experience, we are striving to keep auto-deleverage liquidations to an absolute minimum.
Available in:
Futures
Margin
Auto-Deleverage Liquidation Indicator
All users have access to the Auto-Deleverage Liquidation (ADL) indicator, a tool designed to show a userâs position in the auto-deleverage liquidation queue.
The ADL indicator will indicate a positionâs queue from lowest priority to highest priority. If all lights are lit, in the event of a liquidation, the position may be reduced. With the ADL indicator, users who are at risk of auto-deleverage liquidations could prevent it from happening by reducing their leverage.
The ADL indicator will indicate a positionâs queue from lowest priority to highest priority. If all lights are lit, in the event of a liquidation, the position may be reduced. With the ADL indicator, users who are at risk of auto-deleverage liquidations could prevent it from happening by reducing their leverage.
Available in:
Futures
Binance Support Articles
Binance FAQ pages are one of the most comprehensive and concise crypto trading resources available on the web. The FAQ articles cover a vast range of fundamental and advanced topics comprising everything from the basics of crypto futures trading and Profit & Loss calculations and advanced trading features and more. They are also user-friendly and easy to understand, even for novice users. Binance FAQ topics are categorized in a playlist, allowing users to search for related topics quickly and easily. For more information on the Binance FAQ playlist, click here.
Available in:
Futures
Margin
Leveraged Tokens
Options
User-Generated Content
Whatâs more? We have also compiled a list of educational videos and tutorials created by the best content creators on Binance. These videos and tutorials cover a broad range of topics from the basics of how to place orders on Binance Futures to advanced topics such as margin modes. Check out the videos created by our fellow Binancians on For Binancians, By Binancians.
Available in:
Futures
Client-Knowledge Assessments
In addition to our wide-ranging educational content, Binance has also established a Customer Knowledge Assessment criteria for new users wanting to trade complex products such as futures or margin.
The purpose of the Customer Knowledge Assessment (CKA) is to ascertain a potential userâs knowledge and experience to understand the risks and features of complex crypto products such as crypto-derivatives prior to any trades made on the Binance Futures platform.
The purpose of the Customer Knowledge Assessment (CKA) is to ascertain a potential userâs knowledge and experience to understand the risks and features of complex crypto products such as crypto-derivatives prior to any trades made on the Binance Futures platform.
Available in:
Futures
Margin
Leveraged Tokens
Options
You may not be suited for trading if you are:
- Finding it difficult to stop or reduce your trading activities
- Feeling stressed or irritated when a friend or family member suggests you stop or reduce your trading activities
- Having negative thoughts when the market moves against your trades
- Not taking responsibility to understand your own financial situation
- Not taking the time to read and familiarise yourself with our products and services and terms of use
- Trading with funds beyond your means
If you have questions or are concerned about your ability to trade responsibly, please contact us at Binance Support.
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