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FTX

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FTX is a powerful exchange for those looking to do some serious leverage trading with a wide range of crypto-related products. It’s also a good choice for those just looking to do some casual buys and sells. Low fees, solid liquidity and a high degree of trustworthiness make an FTX account an essential part of any serious crypto trader’s arsenal of trading tools.

Introduction to FTX

FTX, a “crypto derivatives” exchange, was designed by traders for traders, as an alternative platform for leverage trading to BitMEX. FTX’s line of products includes spot trading, derivatives, volatility products, leveraged tokens, and options. The exchange’s design team includes experts from Wall Street quant firms and tech companies like Facebook and Google. In all, FTX is a highly sophisticated exchange that caters to every level of user from novice traders to institution-size whales.

It is recommended that you have at least some trading experience before getting started on FTX as it is not as “hand holding” as simpler exchanges like Coinbase or eToro. As a matter of fact, it is quite easy to lose a lot of money very quickly by underestimating the potential consequences of high leverage trading, which is why it is recommended to start out with a small amount of leverage (3x – 5x) and practice with that before attempting to use higher amounts.

Why use FTX?

FTX is an extremely powerful tool that makes it easy to instantly get started buying, selling, and trading some of the top cryptocurrencies with high amounts of leverage. Learning from mistakes made by BitMEX, FTX’s order books are filled with a large amount of liquidity, making it hard for prices to easily be manipulated in one direction or the other. FTX also employs strong security standards and is considered to be a highly trustworthy operation. Whether you are looking to do serious trading or just want to get in-and-out with a quick coin purchase or sale, FTX has an extremely low barrier to entry with some of the most lenient KYC policies of any crypto exchange.

How to Open an Account on FTX

Opening an account on FTX is extremely simple. You will only need an email address and to create a password in order to get started. You will immediately be asked to secure your account with 2-FA, which is a good idea as it helps to make sure that unauthorized access to or withdrawals from your account cannot be made. Every account begins at verification Level 0, with a 1000 USD lifetime withdrawal limit, meaning you can withdraw up to the crypto equivalent of $1,000 before you need to get verified.

Note that FTX services are not available for those in the U.S. and a few other jurisdictions.

How to Get Verified

FTX is quite lenient with their KYC policy, allowing the most basic of verified accounts to withdraw up to $2,000 in crypto per 24 hours. To start the verification process, click on the Profile button (to the left of the mobile app button toward the top of the screen) and select “Settings”. Below the Account Security section is Identity Verification. Click on “INCREASE WITHDRAWAL LIMITS” to begin the verification process.

  • Level 1 (between $2,000 and $9,000 in daily withdrawals). Requirements for this level of verification require entering your full name, country of residency, and state/province/region.
  • Level 2 (unlimited crypto withdrawals). This level requires significantly more personal information, including the following: source of funds, residential street address, proof of address, ID document, photo of self holding ID document,
  • Level 3 (unlimited crypto withdrawals & unlimited fiat wire transfers). This level requires an additional, recent proof of address (within the last 3 months) and a copy of a bank statement.

Making a Deposit on FTX

To manage deposits of all types, click on your email address in the upper-right corner of the screen and select “WALLETS”. Although FTX is primarily a crypto exchange, it is possible to make fiat deposits via credit card or bank wire transfer. To deposit fiat via wire from a bank account, you will need to perform the Level 3 verification procedures. Fiat currencies currently supported by FTX include USD, EUR, GBP, AUD, HKD, SGD, TRY, ZAR, CAD, BRL, and CHF.

Credit card purchases can be made for BTC only and are handled with a 3rd party processor called Simplex. From the Wallets menu, click “Manage Crypto Purchases via Credit Card” and then “BUY BTC WITH CREDIT CARD”. From here, you will enter in the amount you wish to purchase, receive a quote on it, and if it is acceptable to you, proceed to the next screen to enter your credit card information.

Crypto deposits can be made from simply clicking on the “DEPOSIT” option to the right of the coin which you wish to deposit. Crypto deposit options supported by FTX include BTC, ETH, USDT, BCH, LTC, BTMX, BNB, TRYB, PAXG, XAUT, LINK, TRX, WRX, BRZ, KNC, BAL, MKR, and SXP.

Overview of Trading Pairs on FTX

There are a few different categories of trading options on FTX, with most being categorized by coin name. In all, there are about 180 different trading pairs currently available on FTX. Broader categories of trading pairs include:

  • Spot. This is where you go to exchange one coin for another, serving the classic function of any cryptocurrency exchange. Coins available for spot trading are paired with BTC, USDT, and/or USD, and include the following: BTC, ETH, LINK, BCH, LTC, USDT, MKR, BNB, COMP, TRX, BAL, KNC, PAXG, BTMX, XAUT, SXP, CUSDT, TRYB, and FTT.
  • Futures. These are trading instruments that allow for leverage trading. When opening a futures position, you are not purchasing the underlying coin, but more-or-less placing a bet whether the coin will go up (long position) or down (short position). The 2 types of futures products are perpetual contracts (never expire) and quarterly contracts (expire at the index price of the coin at the end of the quarter). Most coins that can be spot traded are also available for futures trading, as well as the following: VET, XTZ, ADA, BSV, DOGE, ATOM, XRP, EOS, ALGO, MATIC, THETA, ETC, TOMO, HT, OKB, LEO, and BRZ.
  • Tokens. These are trading instruments that combine a predetermined amount of leverage with a coin, index, or commodity. Their price movement corresponds to that of the underlying asset, but rises and falls faster (for BULL and BEAR tokens) or slower (for HALF tokens) than the market index price of the asset. BULL tokens represent a 3x leverage long position on the underlying asset, BEAR tokens a 3x leverage short position, and HALF tokens a 0.5x leverage long or short position. Some BTC-related tokens also represent volatility (BVOL) and inverse volatility (IBVOL), making it possible to trade the implied volatility of Bitcoin.
  • MOVE. These contract-based trading instruments are specific to BTC only and represent the absolute value of the amount that BTC has moved during a set period of time (in either direction). For example, if the price of BTC moves $125 during the course of a day (up or down), the BTC-MOVE contract expires to $125. It is possible to either long or short MOVE contracts, with a long position signifying the bet that the price will drift away from its starting point at the beginning of the day, and a short position signifying the bet that the price will return closer to the day’s starting point.

There are a few other trading instruments in Futures or Token form that are not cryptocurrencies but represent either a basket of coins, a commodity, or something else. Some of these aren’t readily found on other exchanges and help to make FTX a truly unique trading platform. They include:

  • OIL. Oil futures that expire to the spot price of crude oil once every two weeks.
  • DEFI. An index that tracks the price of 11 different decentralized finance coins/tokens.
  • SHIT. An index that tracks the price of a basket of smaller altcoins (50 coins in all).
  • DRGN. Tracks the price of a basket of popular Chinese coins (9 coins in all).
  • PRESIDENT 2020. A series of tokens representing each presidential candidate, expiring to $1 if that particular candidate should happen to win the 2020 U.S. election.
  • HASH. Settles to the average mining difficulty of Bitcoin once per quarter (divided by 1 trillion).

 How to Make a Trade on FTX

Each trading screen features an incredibly wide array of technical analysis and chart tools, as well as several different customizations. Candles can represent anywhere from 1 minute to 1 month in length, and in addition to candles, price representations can be shown in 10 other formats. You can also compare the price movements of other coins along with the one being displayed in the trading screen, draw lines on the chart, and save snapshots of what is currently displayed on your chart as well.

Below the chart are an order book, a buy/sell screen and the latest market trades. To the right of the chart is some basic information about the trading pair, including 24 hour price change and trading volume as well as available balances. If you are leverage trading, here is where your total collateral amount will be displayed along with your preference of leverage amount. You can also see your current margin used, margin fraction, and maintenance margin requirements (amount of collateral required to be maintained in order to prevent your position from being liquidated).

In the center Buy/Sell screen under the chart, you will see information to be entered to place an order. The types of orders offered are as follows:

  • Market order. This is to place a simple Taker order, meaning whether you are buying or selling, your order will be filled according to the current best price(s) on the order book.
  • Limit order. This is for placing a simple Maker order, meaning you wish to buy/sell at a certain price. These incur less fees than Market orders, but it may take some time for the market to move in your direction before the order gets filled.
  • Stop market. If the market moves past the Trigger price, this will place a Market order for the amount being bought or sold.
  • Stop limit. If the market moves past the Trigger price, this will place a Limit order for the price specified and the amount being bought or sold.
  • Trailing stop. This sets a market order that changes based on the direction of the market. For example, if you place a Trailing stop buy order with a Trail value of 10, then a market order triggers if the price goes up $10 from when you set the order. If the price goes down (let’s say from $10,000 to $9,990), then the order triggers when the price comes back up to $10,000.
  • Take profit. After an order has been placed, use this type of order to insure profits by triggering a market order at the specified price.
  • Take profit limit. Similar to a Take profit order but instead of triggering a Market order, this triggers a Limit order at a specified price.

Leverage Trading

Leverage trading is the highlight of FTX and pretty much what they are all about. This allows you to conduct trades on margin up to 101x of your account’s collateral, multiplying your trading power by a huge factor. For example, if you open a long position (buy) with 10x leverage, this means that for every 1% the price of the coin you are trading moves up, your total position gains 10% in profit. Conversely, if the price of the coin you are trading moves down 1%, you will lose 10% of your total position.

High leverage trading can be quite a powerful too, but with great power comes great responsibility. Quite often traders can be liquidated (loss of all collateral) if the market moves too strongly in an unfavorable direction. This means that traders must keep an extra close eye on highly leveraged positions while they are open. It’s also not a bad order to put stop or limit orders in as a safeguard in order to make sure the entirety of your collateral doesn’t get liquidated.

Collateral for margin trading usually comes in the form of USD or FTX, but you can also use other coin balances in your account as collateral as well. The different levels of leverage offered are 3x, 5x, 10x, 20x, 50x, 100x, and 101x. Selecting 50x leverage will increase your fees by 0.02%, and selecting 100x leverage or higher will increase your fees by 0.03%. Leverage options can be set in the personal settings menu or in the trading screen for all products that can be leveraged. Some of the more popular FTX leverage products include:

  • BTC-PERP (Bitcoin Perpetual Futures)
  • ETH-PERP (Ethereum Perpetual Futures)
  • LINK-PERP (Chainlink Perpetual Futures)
  • XTZ-PERP (Tezos Perpetual Futures)
  • BSV-PERP (Bitcoin SV Perpetual Futures)
  • BTC-0925 (Bitcoin September 2020 Futures)
  • MID-PERP (Midcap Index Perpetual Futures)
  • EXCH-PERP (Exchange Token Index Perpetual Futures)

Convert

In lieu of trading, several coins and tokens can be easily converted from one to another at a good rate by using the “CONVERT” option that is found to the right of convertible cryptos in the Wallets section. It is possible to convert just about any coin or token into any other using this function, which makes it especially handy for those that would rather not go through the hassle of setting up a trade. It also makes it possible to convert small balances that do not meet the minimum requirement for withdrawal.

Trading and Withdrawal Fees

FTX features some of the lowest fees of any crypto exchange. New users start on fee Tier 1, with a 0.07% taker (market order) and 0.02% maker (limit order) fee. To reach Tier 2, you must perform $1,000,000 worth of trades within a 30 day period. This will result in a reduction of the taker fee to 0.05%. Additionally, the exchange’s utility token, FTT, can be used to get discounts on trading fees in increments of 3% at a time. Using a referrer will also get you an additional 5% discount on trading fees.

One of the perks of FTX is that they do not charge transaction fees on crypto withdrawals. They do, however, have a $75 fee for withdrawal of fiat in amounts below $10,000. For withdrawals above $10,000, the withdrawal fee is waived.

Making a Withdrawal on FTX

Withdrawals can be made by simply clicking on the “WITHDRAW” option in the Wallets section. Crypto withdrawals are processed near instantly. You will need to activate your 2-FA in order to make a withdrawal. Note that fiat withdrawals via bank wire transfer can only be made on the weekdays. Also note that some tokens cannot be withdrawn as they are simply trading instruments that are native to FTX and are not available outside of the exchange.

Security

FTX employs heavy duty internal security and has yet to suffer any sort of data break or hacking event. Security features can be accessed from the Settings portion of your profile. Different security measures include:

  • Two-Factor Authentication (2-FA). Methods include Google Authenticator, Authy, or SMS.
  • Withdrawal Password. This is a special password separate from your account login password specifically used to make withdrawals.
  • Withdrawal Destination Whitelisting. Here is where you can set a list of coin addresses which your account is eligible to withdraw coins to. Withdrawals from your account can only be made to these addresses.
  • Custom Logins. This option will enable other people to log into your account with customized permissions.

Mobile App

The FTX trading app is available for both Android and iOS mobile devices and can be downloaded from the Google Play or App Store. As far as exchange apps goes, FTX is quite superior, carrying all of the features that the desktop version of the exchange offers while also remaining high performance. Seldom does the app crash or experience problems when placing trades; however, it can be a bit hard to see the entire array of components on smaller screens. It is recommended ideally for tablets or larger cell phones, but for those who need to be able to perform trades on the go, it will work on regular-sized cell phones as well.

Benefits of FTX (over the competition)

  • Huge selection of leverage products and tokens.
  • Easy registration process, no KYC required for first $1,000 worth of crypto withdrawals.
  • Highly customizable chart screen with several options.

Limitations of FTX

  • Not for beginners: requires some previous trading experience in order to use.
  • Small selection of fiat deposit options.
  • Not available for residents of the U.S.

Wrapping it up

In all, FTX is a very powerful and versatile exchange, built by Wall Street software experts and specifically geared for crypto traders. Their futures trading was developed from the ground up, reinventing the idea while making it more dependable and fair to traders in the process. As a result, FTX has managed to attract a loyal base of users in the relatively short period of its existence. Whether you are just looking for a place to buy/sell coins with low fees or plan to do some serious, large-scale trading, FTX delivers a quality, painless experience, free from much of the regulatory hassle that burdens several other exchanges of its magnitude.

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