Crypto futures paper trading: practise perps with fake money

A futures contract lets you trade on a coin's price without owning the coin. Perpetual futures, or perps, are the kind most crypto exchanges offer: they have no expiry date, so a position stays open for as long as your margin lasts.

You can go long (you gain if the price rises) or short (you gain if it falls). You put up margin, and leverage multiplies the position: 100 USDT of margin at 10x controls a 1,000 USDT position, and gains and losses are calculated on the full 1,000.

To keep the perp price close to the spot price, longs and shorts pay each other a small funding fee at regular intervals.

1. 1
   Leverage cuts both ways

   At 10x, a 5% move against you costs half your margin. At 50x, a move of under 2% is enough to lose all of it. Crypto prices often move several percent in a day.

2. 2
   Liquidation is final

   When losses use up your margin, the exchange closes the position for you. The margin is gone, even if the price turns around an hour later.

3. 3
   Shorting feels different

   On a short, a rising price is your loss, and a rally has no ceiling. Most beginners have never held a position that loses money when the market goes up.

4. 4
   Small costs add up

   Funding is charged on the full leveraged position, not on your margin, so it matters more the longer you hold and the higher your leverage.

• Long or short

  Pick a side on the futures screen: long if you expect the price to rise, short if you expect it to fall.

• Leverage from 1x to 100x

  Set it with a slider or the quick buttons (1x, 10x, 25x, 50x, 75x, 100x). The form starts at 10x, and high leverage is marked with a warning.

• Margin in virtual USDT

  Enter how much margin to commit. The form shows the position size (margin times leverage) before you confirm.

• Liquidation price before you open

  The estimated liquidation price updates as you change leverage, so you can see how close it gets. Open positions show their liquidation price and live profit or loss.

• Market and limit orders

  Open at the live price, or set a limit price and wait for the market to reach it.

• Funding every 8 hours

  Open positions pay or receive a simulated funding fee of 0.01% of the position size every 8 hours: longs pay, shorts receive.

• Liquidation really happens

  If the price reaches your liquidation price, the position is closed and its margin is lost, as on a real exchange. Only the money isn't real.

• Set up the same trade at 2x, 10x and 50x and compare the liquidation prices before you confirm any of them.
• Decide where you would close the trade before you open it, and then close it there.
• Keep each position's margin small compared with your whole balance, so one liquidation is a lesson, not the end of the account.
• Hold a position through a funding interval or two and see what funding did to it.
• Write down why you took each trade, and reread the notes on the ones that were liquidated.

The liquidation guide has a worked example of a liquidation price.