Cryptocurrency trading has rapidly evolved, offering tools and strategies once exclusive to traditional financial markets. Among the most popular instruments today are perpetual contracts — derivatives that allow traders to speculate on crypto price movements without actually owning the underlying asset.
Unlike standard futures contracts, perpetual contracts do not have an expiration date. This gives traders the flexibility to hold positions indefinitely — making them highly attractive in volatile markets.
In 2025, perpetual contracts are no longer a tool reserved for professionals. Platforms like BYDFi, with user-friendly interfaces and innovative features, are making advanced trading accessible to beginners around the world.
Before diving into trading, it’s important to understand what perpetual contracts are, how they work, and what risks they involve.
How Perpetual Contracts Work
Perpetual contracts are a type of derivatives trading instrument, meaning they derive their value from an underlying asset — in this case, a cryptocurrency like Bitcoin or Ethereum. These contracts allow you to go long (buy) if you believe the asset’s price will rise, or go short (sell) if you think it will fall.
Key Characteristics of Perpetual Contracts:
- No Expiry Date: Unlike traditional futures, you can hold a perpetual contract for as long as you like — provided you maintain the required margin.
- Funding Rates: To keep the contract price close to the spot price of the asset, traders periodically pay or receive a “funding rate.” This is a fee exchanged between long and short positions and typically occurs every 8 hours.
- Leverage: One of the main attractions of perpetual contracts is leverage — the ability to trade larger positions with a smaller amount of capital. On platforms like BYDFi, traders can access leverage up to 200x, allowing for potentially higher profits — but also higher risks.
- Mark Price & Liquidation: Positions are typically marked to a fair market price (or mark price) to avoid manipulation. If your margin falls below the maintenance requirement, your position may be liquidated automatically to prevent further losses.
Let’s say you open a long position on BTC/USDT using 50x leverage. A 2% increase in Bitcoin’s price could net you a 100% profit. But the same leverage works in reverse — a 2% drop would wipe out your entire position.
Risk note: Leverage magnifies both gains and losses. Beginners should start with low leverage or use demo accounts like those offered by BYDFi to practice without risk.
BYDFi simplifies this process by offering transparent funding fees, built-in risk controls, and an intuitive interface for managing margin and leverage. It also offers a demo trading account with 100,000 USDT for practice — ideal for getting comfortable with perpetual trading before using real funds.
Getting Started with Perpetual Trading on BYDFi
BYDFi has emerged as a leading platform for beginner-friendly perpetual trading, combining advanced tools with a clean, intuitive interface. Whether you’re brand new to crypto or transitioning from spot to derivatives trading, BYDFi makes it easy to start trading perpetual contracts.
Step-by-Step Guide to Start Trading
- Create Your Account
- Visit BYDFi and click “Sign Up.”
- Provide your email, create a secure password, and verify your identity.
- While most functions are accessible without KYC, verifying your account increases your withdrawal limits and unlocks additional features.
- Secure Your Account
- Set up Two-Factor Authentication (2FA) using apps like Google Authenticator.
- Configure anti-phishing codes to protect against scams.
- Access the Demo Account (Highly Recommended for Beginners)
- BYDFi offers a 100,000 USDT demo account so you can practice trading without risking real money.
- Use it to learn how to open, close, and manage positions using leverage and margin.
- Deposit Funds
- Choose from various payment methods, including credit/debit cards, bank transfers, or third-party providers like Banxa and Transak.
- BYDFi supports over 100 fiat currencies and multiple cryptocurrencies for deposits.
- Navigate to Perpetual Contracts
- On the trading dashboard, choose from USDT-M or Coin-M perpetual contracts.
- Select your preferred trading pair (e.g., BTC/USDT or ETH/USDT) and adjust your leverage — up to 200x is available.
- Open a Trade
- Choose to go long or short based on your market outlook.
- Set stop-loss and take-profit levels to manage your risk.
- Monitor funding fees, which may be positive or negative depending on market conditions.
Why BYDFi is Ideal for Beginners
- Simple User Interface: Designed for individual investors, BYDFi strips down the complexity of crypto derivatives without sacrificing power.
- Copy Trading: Follow and mirror the trades of professionals with one click.
- Comprehensive Support: 24/7 live chat and multilingual communities make it easy to get help.
- No-KYC Flexibility: Most trading functions are available without KYC, though enhanced features are available to verified users.
📌 Check out this Guide to Perpetual Trading for Beginners for more tools and resources to start confidently.
Risk Management Strategies for Perpetual Trading
Trading perpetual contracts can be rewarding, but it’s also high risk — especially when using leverage. Without a solid risk management strategy, even experienced traders can suffer significant losses. As a beginner, mastering risk management is essential to staying in the game long-term.
1. Start with Low Leverage
While BYDFi offers up to 200x leverage, beginners should start low — typically between 2x to 5x. Higher leverage magnifies both profits and losses, so use it cautiously until you’re confident in your strategy.
2. Use Stop-Loss and Take-Profit Orders
- Stop-Loss Orders help limit potential losses by automatically closing your position if the market moves against you.
- Take-Profit Orders lock in gains when your target price is reached.
BYDFi allows you to set these parameters easily when opening a trade, giving you more control and protection.
3. Never Risk More Than You Can Afford to Lose
A common rule in trading is to never risk more than 1–2% of your capital on a single trade. This keeps your account safe even during a losing streak.
4. Practice on a Demo Account First
Take advantage of BYDFi’s 100k USDT demo trading account to test your strategies. This lets you gain experience without financial consequences — and helps you understand how margin, liquidation, and funding fees affect your trades.
5. Diversify Your Trades
Avoid putting all your capital into one position or asset. Spread your risk across different crypto pairs or trade types (e.g., spot and perpetual).
6. Be Aware of Liquidation Risk
Liquidation happens when your margin falls below the maintenance level. Always monitor your margin ratio, and avoid trading with your entire balance.
7. Follow the Market, Not the Hype
FOMO (Fear of Missing Out) and FUD (Fear, Uncertainty, Doubt) are emotional traps. Stick to your plan, manage your risk, and don’t trade based on Twitter threads or viral news alone.
🛡️ BYDFi helps with risk control by offering real-time margin tracking, risk alerts, and educational tools — making it easier for beginners to trade responsibly.
Tips and Strategies for Successful Perpetual Trading
Once you understand the basics of perpetual contracts and have risk management practices in place, the next step is to develop strategies that improve your odds of long-term success. Trading isn’t just about luck — it’s about consistency, discipline, and data-driven decisions.
1. Follow a Trading Plan
Before entering any trade, define:
- Entry and exit points
- Stop-loss and take-profit levels
- Maximum amount to risk
Having a plan — and sticking to it — helps eliminate emotional decision-making.
2. Use Technical Analysis
Technical analysis involves reading charts and using indicators like:
- Moving Averages (MA)
- Relative Strength Index (RSI)
- MACD (Moving Average Convergence Divergence)
Platforms like BYDFi offer built-in charting tools that help traders make informed decisions based on historical price data and market momentum.
3. Learn from Others with Copy Trading
BYDFi’s copy trading feature allows you to follow and automatically mirror the strategies of top traders. This is especially useful if you’re still learning or want exposure to expert-level tactics.
Tip: Use copy trading to observe strategy execution in real-time, then try replicating similar trades in your demo account to understand the logic behind them.
4. Monitor Funding Rates
Since perpetual contracts don’t expire, funding rates are used to anchor the contract price to the spot price. Depending on whether the market is bullish or bearish, you may pay or receive this fee. Keep an eye on funding costs to avoid unexpected losses, especially when holding positions for longer periods.
5. Stay Updated with Market News
Market sentiment plays a major role in crypto price movements. Use platforms like BYDFi’s news feed, Twitter/X, and other financial media to stay informed about:
- Regulatory developments
- Network upgrades
- Macro-economic factors
6. Keep a Trading Journal
Documenting your trades — including wins, losses, strategies, and emotions — will help you identify patterns, improve discipline, and grow as a trader.
7. Be Patient and Consistent
Crypto markets operate 24/7, and it’s easy to fall into the trap of overtrading. Focus on quality trades, not quantity. Stick to your plan, avoid chasing losses, and aim for steady improvement.
Conclusion
Perpetual contracts offer an exciting way to trade the crypto markets with flexibility, leverage, and high liquidity. While the potential for profit is significant, it’s equally important to approach this market with caution, education, and discipline — especially as a beginner.