Beginners Trading Guide
The purpose of this guide is to provide a basic overview of how to setup and trade with an OKCoin account with a view to trade in the BTC and LTC futures market. This guide is not intended to provide any tips, hints or strategy for trading on the platform. This is not an official OKCoin document, and the author is not affiliated to OKCoin.
Those who already have knowledge of bitcoin, wallets, and the mechanism to transfer BTC funds. It is assumed you understand futures and leverage trading. Appendix A provides a general overview.
Before you start:
In order to trade on the OKCoin platform, you will need
- A valid email address.
- A valid identification in the form of a passport (or ID number if in China).
- Around 15 minutes to setup your account.
Account Creation is a 3-step process which involves, signing up, verifying your account, and then enabling futures trading.
Simply go to www.okcoin.com
Action: Create an account by clicking the “Sign Up” Link in the top right hand corner.
Tip: Ensure your password is complex, and is NOT used at any other sites.
Enter a valid email address and suitable password to create your account. An email will be sent with a link asking you to confirm that you have control of the email address. Once confirmed, you will see the OKCoin home screen.
Tip: Protect your account - Enable Two Factor Authentication (Appendix B has details)
Verify Account to Level 1:
In order to transfer any type of funds to OKCoin, you are required to verify who you are. OKCoin will require a Passport (or ID number if in China) in order to do this.
- Click Account Menu
- Click ‘Please verify your account to Level 1’ as seen below:
- Under “Level 1”, next to ‘Verify Your Personal Information’ click ‘Verify Now’
- Click ‘Individual Account’
- Enter in the relevant details.
Enable Future Trading
The future Trading menu is not enabled by default
- Go to the 'Trade' top menu
- Click on the 'Futures' menu options
- Agree to the terms and conditions & confirm
trading you will exclusively be using BTC (or LTC)
your account with BTC
Click the Account Top Menu
Click Deposit Right Menu
3. Click BTC Deposit to obtain your BTC
Before placing orders there are a few fundamentals with the OKCoin trading platform to understand.
OKCoin offers X10 and X20 leveraged futures trading.
All contracts are set at $100USD, but can be leveraged. Thus you need only $5USD to open 1 contract at X20 leverage
Contracts can be set at a number of future dates from 1 week to 3 months.
Weekly contracts are closed on Fridays at 16:00 (UTC +8)
You can Close your contract at any time before the closure.
You can set limit orders if required.
To Goto the BTC Futures page.
Click the Trade Menu on the top menu
Click the BTC Futures Menu on the right screen
Open an Order:
To Place an Order, which references to the diagram below
Choose your Leverage.
Choose your price.
Choose the amount of contracts you wish to open at this price.
Click the ‘Open Long’ or ‘Open Short’ button.
TIP: Before you start, make a note of the following on the diagram below
- Ensure Margin Mode is set to fixed (default)
- Make a note of what futures date you are trading in. (b. in the diagram below). Remember futures trading are for contracts set to a date in the future. OKCoin offers contracts over a number of set dates.
Your contract will be represented at the bottom of the screen as can be seen below
It will show the timeframe of your contract, along with details about price, and how many contracts are in that order.
There are 2 options for closing your contract.
- enter in a close price, and click the ‘Close’ button
- close immediately with best market price, click the ‘Mkt’ button.
Appendix A - Futures and Leverage Trading
Future trading is mainly used to speculate, rather than to enter into a contract to buy/sell. Futures are highly risky, and volatile by nature.
A futures trade is similar to any other trade you would make, but its delivery date is set at a time in the future. e.g. you buy a year long subscription to Netflix for $120/year. You are paying for goods yet to be delivered, and thus protecting yourself from any price changes. Prices could go up or down however.
It is the contract, rather than the goods or services that are then brought/sold in the futures market. The contract has value (of $120) now - but what is it value in 1 week or 1 year? It is this speculation that drives the futures market.
All futures trades involve 2 parties. The seller is the holder of the short position. The buyer the long position. e.g. You as the purchaser of the Netflix contract hold the long position. Netflix holds the short position.
Lets assume the price of the NetFlix subscription goes up. You, as holder of the long position, are better off, as its now worth more. If you chose to on sell your contract, you could get a higher price for it. Similarly if the price goes down, you have lost money, if you choose to on sell your subscription.
If you open a long contract, you want the price to go up.
If you open a short contract, you want the price to go down.
Leveraged Accounts & Margin Calls:
This allows you to create a full price contract without the need to have all funds available.
Remember that we are trading a contract, not actual goods.
A X10 contract for the Netflix contract for example can be opened with 1/10th of the total funds needed to purchase it outright. i.e. $12.
Given you only need $12 for a $120 contract, how does this affect your contract if the price changes? Lets look at it from the Long position:
If the price of your contract goes up by 10% ($12) you have just doubled your money.
If the price of your contract goes down by 10% ($12) you have just lost all of your money, and thats where a Margin Call comes into play. The short holder of the contract, can now force the closure of the contract due to the Long position holder not having any funds left to support it. The short holder has doubled their money, and closed the contract using a Margin Call.
With a X20 contract, only a 5% change is needed to wipe out your contract, or similarly double your investment.
Appendix B - Two Factor Authentication (2FA)
2FA adds another level of authentication to your account. It will add something you know (your password) with something you have (your 2FA code) to make it very difficult for hackers to break into your account. Your 2FA code, when enabled, will provide a time expiring, random 6 digit code that will be used when you login.
2FA can be enabled by following the prompt on the login screen or going to the following URL https://www.okcoin.com/user/security.do once logged on.
OKCoin provides a guide on using Google Auth which is the recommended option.
Click on ‘Set’ on the 2FA box to begin the process.
You will be presented with a QR code & key, which when entered into your google auth application will setup your rolling random code for the site.