Getting Started With Perpetual Trading: A Complete Guide to Opening, Managing and Closing Positions

Perpetual trading represents one of the most dynamic segments of the cryptocurrency derivatives market, offering traders the opportunity to amplify their market exposure through leverage. Whether you’re entering the derivatives space for the first time or refining your trading strategy, understanding the mechanics of perpetual trading—from order placement to position management—is essential for success. This guide walks through the complete lifecycle of a perpetual trading position.

Understanding Position Setup and Order Placement

When engaging in perpetual trading, the first critical step is opening a position through an order. Most modern trading platforms offer multiple pathways to execute trades: quick order functions integrated into charts for rapid placement of limit or market orders, and comprehensive order zones that enable more sophisticated order customization aligned with your specific trading strategy.

Before placing any order in perpetual trading, you must establish three foundational parameters:

Margin Mode, Position Mode, and Leverage Configuration

These settings form the backbone of your trading setup. Margin Mode determines how your collateral is allocated across positions—whether concentrated in isolated accounts or pooled across your entire portfolio. Position Mode defines your directional flexibility: One-Way Mode restricts you to a single direction per trading pair, while Hedge Mode permits simultaneous long and short exposure. Leverage amplifies both potential gains and losses, with maximum allowable leverage varying based on risk tier classifications.

Order Type Selection

Perpetual trading supports diverse order architectures. Market orders execute immediately at current prices, useful for urgent entries or exits. Limit orders execute only at specified price levels, providing precision but requiring patience. Conditional orders trigger automatically when market conditions meet your predetermined criteria, enabling sophisticated strategies without constant monitoring.

Price Architecture and Order Mechanics

Setting appropriate prices—whether entry points, trigger levels, or take-profit/stop-loss thresholds—requires deep understanding of each parameter’s implications. Take Profit (TP) and Stop Loss (SL) orders automate exit strategies: once your entry order fills, the system automatically places your preset exit orders. Should you need to adjust these after entry, most platforms provide modification capabilities through your positions interface.

Position Sizing and Execution Strategy

You can specify your position size by quantity, by initial margin required, or by total order value. The system calculates equivalent positions across all three metrics. For limit and conditional orders, execution strategies become relevant: Good-Till-Canceled (GTC) maintains your order indefinitely, Immediate-Or-Canceled (IOC) executes partially or cancels the remainder, and Fill-Or-Kill (FOK) executes fully or cancels completely. Post-Only orders ensure you always act as a liquidity maker rather than taker, though this isn’t applicable to market orders.

Managing Margin Requirements and Leverage in Perpetual Trading

Active perpetual trading positions can be dynamically adjusted through margin modification—a critical risk management tool under Isolated Margin conditions. By adding supplementary margin to a position, you lower its liquidation price without altering the original leverage used at entry. The system recalculates liquidation thresholds before confirming any adjustment.

Margin Adjustment Scenarios

When you add extra margin then change leverage at the order interface, the system resets the initial margin requirement for your position. Any surplus margin previously added gets removed, and leverage changes only execute if sufficient available margin exists and liquidation won’t trigger immediately.

Adding supplementary margin and subsequently opening an additional position in the same direction causes the added margin to distribute across the enlarged total position. Consider this illustration: if you hold 1 BTC long with a liquidation floor at $9,500 and add $1,000, lowering liquidation to $8,500, then add another 1 BTC at the same price point, that $1,000 now supports 2 BTC total, raising liquidation to $9,000.

Conversely, partial position closure reduces supplementary margin proportionally. If you added $1,000 to a 1 BTC position and subsequently close 50%, your surplus margin decreases to $500. Importantly, your liquidation price remains unchanged through partial exits.

Tracking Real-Time Prices and Mark Indexes

The Mark Price represents a critical distinction from Last Traded Price (LTP). Rather than reflecting only the most recent transaction, Mark Price incorporates a global spot index across major exchanges, adjusted by a decaying funding basis rate. This synthesis provides a more reliable liquidation trigger and unrealized profit/loss measurement than raw transaction prices alone.

Accessing Mark Price requires switching your chart display from LTP to Mark Price mode. You’ll also observe Mark Price displayed in the order book as a yellow reference price adjacent to current LTP, with a yellow line on LTP charts representing Mark Price evolution over time. Advanced settings allow customization based on your position direction for optimal accuracy.

Executing Order Cancellations

Before market execution occurs, orders remain cancellable through the Current Orders interface. Pending limit and conditional orders can be withdrawn at any moment, providing flexibility to adjust strategy in response to market movements. Once an order executes and fills, cancellation becomes impossible—the position enters your active holdings.

Exiting Your Perpetual Trading Position

Closing a perpetual trading position offers two methodologies. The direct method provides one-click close buttons for immediate market liquidation or limit-based exits. The manual method involves placing offsetting orders: in One-Way Mode, simply execute an order in the opposite direction matching your current position size. For instance, closing a 1 BTC short requires executing a 1 BTC long order. The Reduce-Only option prevents accidental expansion—it ensures your offsetting order can only reduce or exit, never initiate new exposure. Under Hedge Mode, use the dedicated Close tab to unwind directional positions independently.

Risk Considerations and Best Practices

Understanding perpetual trading mechanics extends beyond execution—it encompasses risk awareness. Liquidation represents the ultimate consequence of insufficient margin relative to losses. Always maintain adequate buffer between entry price and liquidation level. Position sizing remains paramount: never risk capital you cannot afford to lose, as leverage multiplies both profits and drawdowns. Pre-setting TP/SL orders automates discipline, preventing emotional decision-making during volatile market conditions. Most importantly, perpetual trading demands continuous education; market conditions, funding rates, and platform features evolve constantly, requiring traders to remain informed and adaptive.