How to open your first futures position: step by step with numbers

We go from choosing the margin mode to checking the liquidation price using one example. By the end you will know how much you lose if the trade fails before you click the button.

5 min read · Updated: 2026-10-19

Contents

Before you start
Step 1. Choose isolated margin
Step 2. Pick low leverage
Step 3. Size the position from your risk
Step 4. Set the stop-loss and take-profit before entering
Step 5. Check the liquidation price
Step 6. Know what funding is
Step 7. Open the position and leave the stop alone
Common mistakes
Questions and answers

Before you start

In the example below you have $1,000 in USDT on your futures account and want to go long BTC on a perpetual contract. Say the entry is $60,000. The numbers are illustrative; the order of steps is what matters.

Open your first trade on a demo account or at the smallest size. Its purpose is to learn the interface, not to make money.

Step 1. Choose isolated margin

Futures have two margin modes. On isolated margin the position gets its own collateral, and in the worst case you lose only that. On cross margin the whole futures balance backs the position, and one bad trade can take everything.

Find the margin mode switch next to the leverage field.
Pick Isolated before you open the position: you usually cannot switch the mode on an open position.

Step 2. Pick low leverage

Leverage does not change your dollar risk if you size the position from the stop (step 3). It changes only two things: how much collateral is locked and how far away the liquidation price is.

At 3x a long is liquidated roughly 33% below entry.
At 10x, roughly 10% below.
At 50x, roughly 2% below, which is an ordinary daily move in crypto.

For a first position 2–3x is plenty. We use 3x.

Step 3. Size the position from your risk

First decide how much you are willing to lose if the trade fails. A common rule is no more than 1% of the account: a Risk per trade of $10.

Then find where the stop belongs on the chart. Say the nearest swing low is $59,000, so the stop goes just below it at $58,800. The stop distance is $1,200, or 2% of the entry.

Formula: position size = risk ÷ stop distance in percent.

Item	Value
Risk	$10
Stop distance	2%
Position size	$10 ÷ 0.02 = $500
In BTC	$500 ÷ $60,000 ≈ 0.0083 BTC
Collateral at 3x	$500 ÷ 3 ≈ $167

Size comes from the stop, not from leverage. At 10x instead of 3x the position is still $500; only the collateral drops to $50.

Step 4. Set the stop-loss and take-profit before entering

Most exchanges let you attach a Stop-loss and Take profit in the order form. Do it before you enter, not when the price starts moving: in a fast market there may be no time.

Stop-loss: $58,800. Loss if hit ≈ $10 plus fees.
Take-profit: use a Risk/Reward (R:R) of 1:2, so the target is $2,400 above entry at $62,400. Profit ≈ $500 × 4% = $20 minus fees.
Check that the stop is tied to the position and can only close it. For standalone orders use the Reduce-only order flag.

Count fees too. At a 0.05% taker fee, entering and exiting $500 costs about $0.50. Small on one trade, noticeable over a hundred.

Step 5. Check the liquidation price

Before you confirm the order, the exchange shows an estimated liquidation price. A rough formula for an isolated long: entry × (1 − 1 ÷ leverage + maintenance margin rate).

For our example at 3x with a 0.5% maintenance margin: $60,000 × (1 − 0.333 + 0.005) ≈ $40,300.

The rule is simple: the stop must trigger long before liquidation. Our stop is $58,800 and liquidation is around $40,300, a huge buffer. If the liquidation price sits near or above your stop, lower the leverage.

Liquidation costs more than a normal stop: you lose the position's collateral, and part of it may go to the exchange's Insurance fund.

Step 6. Know what funding is

Perpetual futures never expire, so the contract price is tied to spot through funding payments. Longs and shorts pay each other, usually every few hours, often every 8 hours.

Positive funding: longs pay shorts.
Negative funding: shorts pay longs.

In our example at 0.01% per period, the $500 position pays $0.05 per period. For a one-day trade that is nothing. Hold for weeks at high funding, say 0.1% per period, and it becomes $0.50 per period and about $1.50 a day, a real bite out of a $20 target.

The current rate and the time of the next payment are usually shown above the contract chart.

Step 7. Open the position and leave the stop alone

Check once more: isolated margin, 3x leverage, $500 size, stop at $58,800, target at $62,400.
Open the position with a limit or market order.
Make sure the stop and target appear under open orders or on the position card.
Log the trade in your trade journal: reason for entry, stop, target, result.

The key rule after entry: you may move the stop only to reduce risk, for example to Breakeven, never further from the price.

Common mistakes

Opening a position with all your margin and only then thinking about a stop.
Using 20x–50x because the position looks small.
Leaving cross margin on by default.
Moving the stop further away as the price approaches it.
Holding for weeks and forgetting about funding.

Futures are high-risk. Only risk money you can afford to lose. For the bigger picture, see spot vs futures.

Questions and answers

What leverage should a beginner use on futures?

2–3x. Your dollar risk is set by the stop and position size anyway, and low leverage keeps the liquidation price far from the stop.

Isolated or cross margin: which is better to start with?

Isolated. In the worst case you lose only that position's collateral, not your whole futures balance.

How do I calculate a futures position size?

Divide the amount you are willing to lose by the stop distance in percent. A $10 risk with a 2% stop gives a $500 position.

When is funding charged?

At each funding time, usually every few hours and often every 8 hours. Whoever holds a position at that moment pays or receives it.