How to Trade Perpetual Futures
Perpetual futures (perps) let you trade with leverage and profit from both rising and falling prices. This guide covers the essentials.
What Are Perpetuals?
Perps are futures contracts without expiry:
- No settlement date
- Funding rates maintain price peg
- Long or short with leverage
- Trade 24/7 on-chain
Key Concepts
| Term | Description |
|---|---|
| . . . | . . . . . . - |
| Leverage | Multiplied exposure (2x-50x) |
| Funding Rate | Payment between longs/shorts |
| Liquidation | Forced close below margin |
| Mark Price | Fair price for liquidations |
Risk Warning
Leverage trading is extremely risky:
- You can lose your entire position
- Liquidations happen fast
- Funding fees accumulate
- Only trade what you can lose
. -
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Step-by-Step Instructions
Understand the Risks
Perp trading with leverage can result in rapid, total loss of funds. Only use money you can afford to lose.
Warnings
- ⚠Most retail traders lose money
- ⚠Start with paper trading or tiny amounts
- ⚠Never trade with borrowed money
Choose a Platform
Select a decentralized perp exchange: GMX, Hyperliquid, dYdX, or others.
Tips
- ✓GMX has no price impact on trades
- ✓Hyperliquid has the best fees
- ✓Consider L2 platforms for lower costs
Fund Your Account
Deposit collateral to the platform. Most accept USDC, ETH, or their native tokens.
Tips
- ✓Bridge to the right network first
- ✓Keep extra for gas fees
Place a Trade
Select asset, direction (long/short), size, and leverage. Review liquidation price.
Tips
- ✓Start with 2-3x leverage maximum
- ✓Lower leverage = lower risk
- ✓Set stop loss before entry
Set Stop Loss and Take Profit
Always use stop losses. Set TP levels for taking profits.
Tips
- ✓Risk 1-2% of account per trade
- ✓Use trailing stops if available
Warnings
- ⚠Positions without stops can go to zero
Monitor and Manage
Watch your position, funding rates, and margin levels. Close or adjust as needed.
Tips
- ✓Funding is charged every 8 hours typically
- ✓Add margin if getting close to liquidation
Close Position
Close your position when target is reached or to cut losses. Withdraw profits.
Tips
- ✓Do not let winners become losers
- ✓Take partial profits along the way