Contract trading offers cryptocurrency traders an advanced method for engaging with digital assets. Unlike spot trading, contract trading operates with unique mechanics and position-opening strategies. This guide aims to help beginners transition from novice to confident trader by demystifying key concepts and workflows.
Core Concepts in Contract Trading
1. USDⓈ-Margined vs Coin-Margined Contracts
MEXC supports two contract types:
- USDⓈ-Margined Contracts: Settled in USDT, allowing multi-currency trading with a single stablecoin balance.
- Coin-Margined Contracts: Settled in the base currency (e.g., BTC, ETH).
For this guide, we'll focus on USDⓈ-Margined contracts.
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Fund Management Essentials
2. Transferring Assets
Before trading, ensure sufficient funds in your Contract Account:
Transfer Process:
- Navigate: [Assets] → [Transfer]
- Select: [Spot Account] → [Contract Account]
- Choose currency (e.g., USDT)
- Enter amount
- Confirm transfer
Advanced Order Placement
3. Configuring Trading Parameters
Three critical settings affect your risk/reward profile:
3.1 Position Mode
- Hedge Mode: Hold long/short positions simultaneously
- One-Way Mode: Single position per contract
Setting Path: Contract Page → Settings → Position Mode
3.2 Margin Type
| Type | Characteristics | Risk Profile |
|---|---|---|
| Isolated | Separate margin per position | Limited loss |
| Cross | Shared margin across positions | Higher risk |
Adjust via the margin type icon on the trading interface.
3.3 Leverage Mode
- Simple Mode: Uniform leverage for long/short
- Advanced Mode: Custom leverage per direction
4. Order Types Demystified
4.1 Limit Orders
- Set exact entry prices
- Ideal for precise entries/exits
- Workflow: Price → Size → Time-in-Force → Execute
4.2 Market Orders
- Immediate execution at best available price
- Includes MTL (Market-to-Limit) conversion option
4.3 Stop Orders
- Triggers when price reaches specified level
- Combines limit/market execution methods
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Risk Management Protocols
5. Position Monitoring
5.1 Active Monitoring
- Track orders in [Current Entries]
- Monitor triggered positions in [Open Positions]
5.2 Liquidation Prevention
- Maintain adequate margin levels
- Understand forced liquidation thresholds
FAQ Section
Q: What's the minimum contract size?
A: Varies by pair, typically 0.01 BTC equivalent.
Q: Can I change position mode with active orders?
A: No - close all positions before switching modes.
Q: How is leverage calculated?
A: Based on collateral amount and position size.
Q: What's the advantage of hedge mode?
A: Allows simultaneous long/short positions for advanced strategies.
Q: How often should I check margin levels?
A: Monitor continuously during volatile periods.
Key Takeaways
- Master fund transfers between accounts
- Configure position/margin/leverage settings appropriately
- Select order types matching your strategy
- Implement rigorous risk management
- Regularly monitor open positions
Note: Cryptocurrency trading involves substantial risk. This content serves educational purposes only and does not constitute financial advice.
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