Trading

Here you can see the price chart of the currency pair you chose (you can change the traded currencies in the Instruments section to the right of the chart). This is a candlestick chart. Every candlestick represents the selected timeframe. At the top of the chart you can select the periodicity: m1;m3;m5;m15;H1;H4;W1;M1.

So if you chose W1 that means that one candle will show you the price movements within a 1 week period. The candles may either be red or green depending on whether the price moved down or up from the starting time point of the candlestick period. The long lines at the top and at the bottom of the candles are called shadows. The shadows show the highest or lowest price during the period corresponding to the candlestick. The body (the broader part or the candlestick) shows the price the candlestick was opened and closed at. Thus, a green candlestick’s opening price is at the bottom of the body and its closing price is at its top. For red candles it’s the opposite.

You can zoom in and out using the +/- buttons in the upper right corner of the chart.

At Changelly PRO you can use two types of orders:

1. Market price order – with this order type you can both buy and sell at the current market price corresponding to the moment when you place the order.

2. Limit order – when you create an order of this type you can determine at what price you want to buy or sell. For example, if you set your limit to buy currency at $300 the transaction will be performed when the price reaches $300. As for selling, the process is the same – your currency will be sold automatically at the price you choose, when the currency reaches this price.

You can choose the market you’d like to trade on in the “Instruments” section. The section is located to the right of the chart.

First click the primary cryptocurrency tab (BTC, ETH, USDT, DAI, TUSD, EURS, EOS) and you will see the list of all markets available for this coin.

Price changes over the last 24 hours are displayed in the “Change” column.

By clicking the star-shaped button to the left of a coin name you can quickly add any pair to the Favorites tab for fast access.

Below the Buy and Sell sections you have the Order Book, which is a list of limit orders that have been placed by traders, but haven’t been executed yet.

The Time & Sales section shows the 50 latest trades which were placed on our platform. These are the trades for the currency pair you are currently viewing. Market Depth illustrates the size of an order needed to move the market price by a certain amount. In case the market is deep, you would need a large order to see a price change.

The Trading View mode is designed for experienced traders. You can switch to Trading View chart at the top left corner of the chart. There you get access to many other tools and indicators. Let’s take a closer look at the tools available in this view.

1. At the top you can select the periodicity of your chart.
2. Next to the periodicity button, you can select the type of the chart. The candlestick chart is the most popular and commonly used in the trading world, but you can find the one which would be more preferable and helpful for your needs. The available options are: Bars chart, Candles, Hollow Candles, Line chart, Area chart, Heiken Ashi and Baseline.
3. In the settings tab in the upper right corner, you can customize the colors of your charts. Here you can also set your timezone.
4. At the top left corner of the chart you can set the indicators. Here you have a lot of other useful indicators to choose from. Find the ones that would be the best for your strategy and apply them to your charts. These will help you with the technical analysis.

To the left of the chart you can select various tools to help your trading. You can draw pitchforks, set support & resistance levels and also draw trend lines and corridors. You can also determine patterns, projections and forecasts. The Trading View has various tools for an advanced trader.

If you’re a beginner, we suggest that you choose a trading strategy or create your own one by combining some of the existing strategies and use it alongside the trading tools and indicators that would help you to properly apply this strategy and to make it as profitable as possible. To get a better understanding of the trading strategies, please take a look at the “Trading” section in the Changelly PRO Knowledge Base.

The Funding Fee is a fee paid to traders. The fee is calculated based on the difference between the perpetual contract prices and spot prices.

In a bullish market the Funding Rate is positive and is usually going up further. In these circumstances traders who have long positions will pay a Funding Fee to traders having short positions. When the market is bearish, the funding rate is negative, and the traders holding short positions will pay a funding fee to the long position traders.

The main reason for Funding Fees is to make the perpetual contract and the associated asset’s prices align. Since perpetual contracts, unlike traditional futures, have no expiration date, crypto exchanges developed this system to make perpetual contract prices match the index price. This mechanism is also known as the Funding Rate.

Futures contracts can be traded at a price different from the Mark Price. Mark Price is the price used to decide whether to liquidate a position: the Mark price is compared with the liquidation price. When compared to the trading price, the Mark Price is an estimate for a genuine value of a contract.

If a contract is traded at a price that differs from the mark one, the Premium Index will be used to raise or lower the Funding Rate in the next funding period. The Interest Rate, that is the difference between the rates of the base and quoted currencies, and Premium Index are calculated every minute and stored in a time series. Then this series is used to calculate the time-weighted average value for a time period equal to the funding period. 

The resulting averaged Interest Rate and Premium Index values are applied to calculate the funding rate according to the following formula:

• rf is a Funding Rate;
• ip is an Average Premium Index;
• ri is an Average Interest Rate (currently it is fixed at 0.01% per funding period).

Then the Funding rate is applied to the Mark price of the position to calculate the Funding Fee.

The Funding Fee is charged and paid every 8 hours. The time before the next Funding is displayed on the chart (see the screenshot below).

The Funding fee or the charge is paid, when the countdown counter reaches 0. Therefore, if you opened a position after the counter started, and it was closed before the counter expired, you will neither pay nor receive the funding.

The amount of the fee depends on the Funding Rate. The higher the Funding Rate, the higher the Funding Fees.

The rate polarity shows the payment direction, and the rate number shows the payment volume.

If the Funding Rate is greater than 0, for example, 0.05%, and it’s the Funding time, traders with open long positions will pay 0.05% from the size of their position (by Mark Price) to the traders holding short positions.

If the Funding Rate is less than 0, traders with short positions pay to the traders holding long positions.

The Funding is charged or paid to a certain contract, that is to the trader holding this contract. Changelly PRO receives no profit from the Funding payments, all payments of this kind are processed directly between our traders.

1. Get prepared

Before starting your first trade, please make sure that your PRO account is ready to go.

Here are 3 preliminary procedures you need to complete:

1.1. check the 2-factor authentication of your account. 2FA is the basic requirement to trade futures.

1.2. top up your derivatives account – at this step, you need to reserve the funds intended for futures trading only;

1.3. set the margin – the amount that will serve as collateral for your trade.

Once these steps are completed successfully, feel free to choose the contract and initiate your first perpetual trade.

1.1. How to Top Up the Derivatives Account?

In order to trade futures, you need to reserve some Tether (USDT) amount that will serve as a collateral for your trade. It must be transferred to your derivatives account so that this sum cannot be used in spot trading. So, basically, you need to put some amount aside by transferring it from your main account. It can be performed in just 3 steps:

1.1.1. Check your USDT balance – the balance must be positive and available on your Spot Account / Wallet. Click the ‘Wallet’ tab:

1.1.2. In the ‘Wallet’ tab, the ‘Transfer’ button is placed to the right.It looks like this:

Click ‘Transfer’.

1.1.3. At this step, you’ll see the pop-up allowing you to select the source account and the destination account.

To transfer the collateral amount that has to be reserved, please select Spot or Wallet in the ‘From’ field, and ‘Derivatives’ account in the ‘to’ field. Enter the amount you would like to reserve as collateral and click the ‘Transfer’ button to proceed:

1.2. How to Set the Margin? 

1.2.1. To set the margin, open the ‘Futures’ tab to find the ‘Contracts’ menu to the right. Thanks to this widget, you’ll see the full list of the contracts available at the moment:

1.2.2. In the upper right corner of the display, you’ll see the ‘Margin wallet’ button. It serves to set the margin – the collateral for your future trade.

This is an obligatory requirement, so click ‘Margin wallet’ to specify the amount and reserve it so that it can support your future trade.

In the ‘Add Margin’ section, you need to fill in the following details:

• amount – this is the exact amount that will be taken from your derivative account to be used as collateral;
• leverage (up to x100) – this is the ratio of your own amount involved to the entire amount required to set a trade. This extra amount – leverage – is supplied by our platform. As a result, you can open way larger trades than those that can be funded by your own money only.

2. How to Make Your First Perpetual Futures Trade?

2.1. Open the ‘Futures’ tab. This is the same tab you used to set the margin. As you already know, the contracts available are listed to the right.

2.2. Scroll down to the ‘Buy/Sell’ widget in the ‘Futures’ tab.

2.3. Select either Long (Buy) or Short (Sell) option, depending on your strategy.

Both Long and Short contracts can be executed as either Market or Limit orders:

2.4. Set the following parameters:

2.5. Having filled in the fields above, please check the parameters that are calculated automatically and filled in by the system based on the figures you provided earlier:

2.6. Once the parameters are set and accepted, the order is created.

You’ll be able to find it in the widget called ‘My orders and trades’:

TIP: contract’s leverage is not set once and forever once the contract is created. If you wish, you can modify it later.

The contract in this widget has the following parameters:

The Insurance Fund’s main purpose is to reduce the number of counterparty liquidations. To do so the Fund uses the collateral from non-bankrupt clients’ fees to compensate losses when their balances fall below zero.

• If the balance of a trader in liquidation (defined as collateralized maintenance margin) is less than 0 USDT after they liquidate all of their holdings, or if the trader is unable to liquidate positions, the trader is considered bankrupt, and Changelly PRO will have to take over the remaining positions.
• If the number of such situations on the platform is high, Changelly PRO will take over the positions and slowly dump them onto the market by means of the Insurance Fund. The Insurance Fund will collect liquidation fees from non-bankrupt traders. Counterparty liquidation will occur if the insurance fund is unable to take holdings from the liquidations.

The Insurance Fund will be operating in accordance with the following rules:

1. The fund will have a maximum net notional position check. 

2. The fund will not be allowed to exceed a predefined position notional on the market; by default, this is 100% the size of the insurance fund. 

3. If a position or positions would increase beyond the max notional, the insurance fund will not be able to take holdings from the liquidations, therefore such positions will be subjected to counterparty-liquidation.

4. The insurance fund will offload positions according to a preset algorithm. All events that would normally require actions by the insurance fund will instead go into counterparty-liquidation before the fund could take positions.

If the Insurance Fund cannot cover the losses, they can be covered by means of Auto-Deleveraging, also known as ADL. It is a feature that covers the losses of some traders by the profit of others.

The ADL mechanism operates in case of significant price movements and is applied to the traders who don’t have enough margin collateral to cover their losses.

An indicator near an open contract position (ranging from 0 to 4) shows how likely it is for the position to be used in the ADL procedure (see the screenshot below).

Liquidation

In case the currency pair price on the market (Mark Price) equals the Liquidation Price for a certain contract, this contract will be liquidated.

Before the contract is liquidated, the system will try to close it at the current Market Price:

1. First the system will use part of the margin collateral to cover the loss. In case a part of the collateral remains, it will be returned to the trader.

2. If the loss cannot be covered by margin collateral, the position will be covered by the Insurance Fund.

3. If the Insurance Fund cannot process the position, the system will try to cover the loss with the ADL procedure.

To avoid liquidation, a trader can either close the contract before the liquidation or increase the margin collateral for this contract.

The mechanism also takes potential funding and penalties into account. Hence, if the Funding Rate has increased, and the trader used a high Leverage and they don’t have enough collateral to deduct the Funding Fee from, the position can also be liquidated. Upon liquidation, a penalty of 0.3% of the position volume is deducted from the trader’s account.

Liquidation Price is a dynamic parameter, so in case of any changes on the market or in your position data, the Liquidation Price will change as well. It is calculated as follows:

• Pe – entry price
• Mp – position margin
• Q – position quantity
• fliq = liquidation fee
• rf – funding rate
• n – funding rate
• rmm – maintenance margin rate

Isolated Margin

Changelly PRO Margin Trading feature uses the Isolated Margin allowing traders to manage the risk on their individual positions by restricting the amount of margin allocated to each one, effectively altering the leverage of that position. If a trader’s position is liquidated in the Isolated Margin mode, instead of their entire margin balance, only the Isolated Margin balance gets liquidated. Also positions that are about to be liquidated can be deterred from being passed on to the Liquidation Engine by adding more collateral.

For instance, if a trader opens a long margin trade on BTC-ETH market with a margin amount of 1 BTC and the 2x leverage, their total order value is 2 BTC and the amount they’re risking is 1 BTC. It also means that in case of the BTC price going down the order will still be open until the BTC price decreases by 50%.

In case the trader assumes that the BTC price will be going up, they may increase the leverage to 10x by decreasing the margin amount accordingly – to 0.2 BTC. Thus, the trader will lower their risks. However, in such a case the position will be liquidated in case of a price drop of 10%.

Below is the list of the indicators available on the Futures Market.

• Mark price – the price used to decide whether to liquidate a position, the Mark Price is compared with the Liquidation Price.
• Index – the Index Price of the selected currency pair. It is calculated according to the data from several other exchange platforms.
• 24 High – max price during the 24 hours period.
• 24 Low –  min price during the 24 hours period.
• Funding Rate – the rate used for the funding calculation.
• Countdown – the time left before the next funding. The funding payments will be processed, when the indicator drops to zero, and the countdown will start over.
• Open int (Open interest) – the total currency volume in opened contracts on the market.