There is so much to think about when you first start trading, this includes choosing your first trading platform. With crypto trading, there are a multitude of exchanges, some of which are risky and engage in non-transparent practices.
Don’t worry, we are here to help guide you! Let’s take a look at a robust exchange with a solid reputation, FTX. Here is a brief history of the FTX exchange.
What is FTX, what is their mission?
FTX is a margin trading platform offering cryptocurrency derivatives such as leveraged tokens, volatility products, and options. FTX was founded in May 2019 by Sam Bankman-Fried, who is also the co-founder of Alameda Research, a firm specializing in trading, algorithms, and market-making, among other services. In 2019, Binance acquired shares in the company and is now an FTX partner.
One of FTX’s major strengths is its team, which has a hybrid background in trading and technology. Their CEO was a Wall Street trader, while their CTO and Head of engineering come from Google and Facebook respectively.
Their mission was to create a trading platform made by traders for traders while making sure it was robust enough to be useful for professionals but also simple enough not to impose barriers to newcomers.
What are some cool features?
FTX’s features are broad, but we’d like for you to pay attention first to their indices. Instead of spending time doing your due diligence on each project, you can purchase an index representing them directly and thus reduce the risk associated with a particular project. For example, there is an altcoin index that is for smaller alts or an index for DeFi projects.
Aside from indices, FTX also has a number of other interesting features such as the ability to trade options. It is not the only platform that allows this, but unlike Binance which only offers a single strike price for option trading, FTX is more professional and uses the “Request Option Quotes” (ROQ) model. This allows for an infinite number of strike price and maturity possibilities.
Like any self-respecting platform, FTX also has a portal that allows for OTC trading but this requires further verification and KYC.
Another interesting feature, although partially available at this moment, is the Quant Zone. This allows traders with the most experience to create automated strategies for trading in the markets. In the future, it will be possible for those who create strategies to make them available to other FTX users, which is quite exciting!
How to get started on FTX?
Now you should have an understanding of what the FTX platform is and what you can do with it. Most of these features are for experienced traders, so we’ll come back to these later on.
Today we will focus on the basics of using this platform:
How to open an account, how to deposit funds into your account, how to trade once your account is funded, the different types of orders and the fees that apply, and finally a note on Margin Trading.
How to Open an account on FTX?
FTX has three different tiers of KYC requirements, from zero to three. To increase your withdrawal limit the first step is to fill out the first level of KYC, which consists of a residence form, as well as your personal information such as first name, last name, and date of birth. This step will allow you to withdraw up to $2,000 daily and $9,000 daily if there is higher trade than transfer volume , which is enough for most of us.
Trade volume is defined as your 30-day trading volume – shown on your profile page. Transfer volume is defined as the USD value of all deposits and withdrawals not between subaccounts.
Before proceeding to the funding step, the final step here is to increase the security of your account by activating the 2FA, using the Google Authenticator.
How to add funds to your FTX account
Adding a 2FA is a necessary step to deposit funds into your trading account. To do so, click on your email address in the top right corner of your screen, and then on settings. You will then be able to activate your 2FA.
Once this step is completed, it is now time to deposit your funds. To do this, you have several possibilities depending on your existing crypto wallet and your KYC level.
You can make a deposit using your favorite currency among a wide choice of crypto from BTC to TRX via ETH and FTT. This will require a KYC level of 1. The same goes for stable corner deposits such as PAX, USDT, TUSD, USDC, BUSD, or HUSD. These currencies can then be changed to USD directly on the platform.
It’s also possible to deposit USD directly from your bank account but this will require you to meet the KYC level 3.
How to trade on FTX
Your account is now funded and now it’s time to start trading. Depending on what you wish to trade, you will go through different interfaces such as the options interface or the OTC portal.
Here we will focus on the most basic, the purchase of BTC spot. To do this, click on the markets tab, then click on the BTC/USDT or BTC/USD pair according to your preferences or the currency used to fund your account.
You will now find yourself on an interface with a “trading view” widget that allows you to view the chart. You also have an orderbook with the last transactions made and the trading interface itself, which has a Buy or Sell tab.
It is the latter that we will use to buy BTC using our freshly converted USD.
What are the different types of orders on FTX?
You are now ready to buy BTC or use your funds to buy the ETH-PERP contract, which is a future contract.
The FTX platform provides you with several types of orders, the main ones being limit buy or market buy, what does this mean?
A market buy is a purchase at the market price, it is the easiest way to open a position because it uses the quantity available in the orderbook at the best price. If you want to open a position on BTC right away, you will use a market order.
A limit buy is different in that it asks you to specify at what price you wish to buy or sell. If you want to buy BTC, but only if it drops to 10500, you will use a limit buy order at 10500.
In the image above, we see that there are several types of market and limit orders, which are stop and take-profit as well as trailings-stops. The use of a market order will always guarantee you execution of your Stop/TP and is, therefore, more secure.
This security comes with a counterpart because the fees will be higher in the case of a market order. Indeed you will pay the taker fee while a limit order will pay the maker fee.
For the rest of 2020, the maker fees are zero. For take fees, please refer to the table below.
Margin Trading note
Now that you have a global view of what the FTX trading platform is all about, we have to warn you about one thing, margin trading and leverage.
Simply put, margin trading means that you can open a position greater than your capital. Let’s say you have $10,000 in capital and you decide to open a position of $20,000, then you would be said to be using a leverage of 2.
On FTX, you can use leverage up to more than 100 but we wouldn’t advise using leverage if you are a beginner. We recommend learning more about leverage before using it. Even when you are ready to use leverage, be sure to take it slow and only use a small amount when starting.
Margin trading and leverage are tools that should be used with extreme care to increase the number of positions you can open simultaneously while keeping the risk level constant.
Using it to take a position 100 times larger than your capital is absolutely not the right way to use it. Remember that there are no shortcuts in trading, so avoid any get rich quick schemes!
Using 4C SMART Margins For FTX
If you are looking for a way to receive live crypto signals from the FTX exchange then 4C-Trading is here to help you out! Every subscription pack offered at 4C includes access to SMART Margins which provides users with access to signals from the FTX and Binance Futures exchanges.
Receiving crypto signals is important if you want to stay on-top of the latest fluctuations in the crypto market. In addition to receiving crypto signals, you’ll also get 2% risk per trade, providing security for your crypto portfolio to keep growing.
To summarize, FTX is a trading platform created by Alameda Research that operates in the crypto market. FTX offers derivatives, options, and indices as well as spot trading.
As with all platforms, FTX offers different types of orders, such as limit and market orders, with a different fee structure depending on whether you use one or the other.
FTX is designed to be robust enough for professionals and accessible enough for newcomers, which is more than successful when you see how easy it is to open an account and make your first trade.
Also note that until the end of the year, maker fees are reduced to 0%, so it will not cost you anything to open a position using a limit order.
So, ready to give it a try? Connect to the FTX exchange here.
Facing technical issues with connecting to FTX? Reach out to the 4C-Trading team on our Telegram Customer Support here.