Contract trading offers an advanced way to trade digital assets, allowing traders to profit from both rising and falling markets. Unlike spot trading, futures contracts involve leverage, margin, and various order types that can amplify both gains and risks. This comprehensive guide is designed to help beginners transition smoothly from zero knowledge to confident participation in contract trading—specifically focusing on U-Margin (USDT-settled) contracts via a mobile app interface.
Whether you're new to crypto derivatives or looking to refine your understanding of key mechanisms like position modes, margin settings, and order types, this article breaks down every essential step with clarity and precision.
👉 Discover how to start contract trading with confidence today.
Understanding U-Margin vs. Coin-Margin Contracts
Before diving into operations, it's crucial to understand the two main types of perpetual contracts available on most platforms:
- U-Margin Contracts (USDT-settled): These are settled in stablecoins like USDT. You can trade multiple cryptocurrencies using a single base currency (e.g., USDT), making profit/loss calculations straightforward and less volatile.
- Coin-Margin Contracts: These use the underlying cryptocurrency (such as BTC or ETH) as both collateral and settlement currency. Profits and losses fluctuate with the value of the coin itself.
This guide focuses on U-Margin contracts, which are ideal for beginners due to their price stability and ease of tracking performance.
Step 1: Transfer Funds to Your Contract Account
To begin trading, you must first move funds from your spot wallet to your contract trading account.
How to Transfer Funds (App Steps):
- Open the MEXC app and tap 【Assets】.
- Select 【Transfer】.
- Choose transfer direction: From 【Spot Account】 → To 【Contract Account】.
- Pick the asset—e.g., USDT.
- Enter the amount you wish to transfer.
- Confirm by tapping 【Transfer】.
Once completed, your contract balance will reflect the transferred amount, ready for leveraged trading.
🔍 Tip: Always double-check the transfer direction and amount. Once used in trading, these funds are subject to market risk.
Step 2: Setting Up Your Trading Parameters
Before placing any orders, configure three critical settings that directly affect your risk exposure and potential returns:
- Position Mode
- Margin Mode
- Leverage Mode
These should be set before opening positions to avoid unexpected outcomes.
2.1 Position Mode: Dual-Side vs. Single-Side Holding
- Dual-Side Position: Allows holding both long and short positions for the same trading pair simultaneously (e.g., long and short BTC/USDT at the same time).
- Single-Side Position: Only one direction (either long or short) is allowed per pair at any given time.
⚠️ Note: You cannot change this mode if you have open positions or pending orders.
How to Set Position Mode:
- Tap the 【More】 icon in the top-right corner of the contract trading screen.
- Go to 【Preferences】 > 【Position Mode】.
- Choose between Dual-Side or Single-Side.
- Confirm your selection.
👉 Learn how top traders manage their position strategies effectively.
2.2 Margin Mode: Isolated vs. Cross Margin
Isolated Margin: Each position has its own dedicated margin. If liquidated, only the allocated margin is lost.
- Example: Using 200 USDT out of a 1,000 USDT balance to open a BTC long. If liquidated, only 200 USDT is at risk.
- Cross Margin: All available balance in the settlement currency supports all positions. Higher risk—entire account balance can be wiped out during sharp moves.
💡 Isolated margin is recommended for beginners due to better risk control.
How to Set Margin Mode:
- Tap the 【Isolated】 or 【Cross】 label on the top-left of the trading interface.
- Slide to select your preferred mode.
- Check 【Apply to All Contracts】 if desired.
- Tap 【Confirm】.
⚠️ Changes do not apply retroactively to existing positions.
2.3 Leverage Mode: Simple vs. Advanced
- Simple Mode: Applies the same leverage and margin type to both long and short sides.
- Advanced Mode: Lets you set different leverage levels and margin types independently for long and short positions.
🔧 Advanced mode offers flexibility but increases complexity—ideal for experienced users.
How to Switch Leverage Mode:
- Tap 【More】 > 【Preferences】 > 【Leverage Mode】.
- Choose 【Simple】 or 【Advanced】.
- Confirm.
⚠️ Cannot be changed when active positions or pending orders exist.
Step 3: Placing Orders – 5 Key Order Types
Now that your settings are configured, it’s time to place your first order. Below are five common order types used in contract trading.
3.1 Limit Order
Use when you want to buy low or sell high at a specific price.
- Set price below current market price for longs.
- Set price above current market price for shorts.
- Otherwise, it may execute as a market order.
Parameters:
- Price
- Contract unit (BTC, USDT, or contracts)
- Quantity
- Time-in-force: GTC / IOC / FOK
📌 GTC = Good Till Canceled
IOC = Immediate or Cancel
FOK = Fill or Kill
Execution Path:
- Set price
- Choose contract unit
- Input quantity
- (Optional) Set time validity
- Click 【Buy Long】 or 【Sell Short】
3.2 Market Order
Fastest execution at best available market price.
- Best for urgent entries/exits.
- Risk of slippage in volatile markets.
With MTL (Market-to-Limit):
Unfilled portion becomes a limit order at last traded price—helpful for large orders.
Execution Path:
- Select contract unit
- Enter quantity
- (Optional) Enable MTL
- Execute trade
3.3 Conditional (Trigger) Order
Automatically triggers when a certain price is reached—ideal for stop-loss or take-profit setups.
Key Settings:
- Trigger type: Latest / Index / Mark Price
- Trigger method: Limit or Market
- Trigger price
- Order price
- Expiry: 24h / 7d / Permanent
Used similarly to stop-limit or stop-market orders in traditional finance.
3.4 Trailing Stop Order
Follows price movement dynamically—great for locking in profits during trends.
- Set either a percentage offset or price distance.
- Activation price optional: Only starts tracking after price hits this level.
📈 For longs: Trigger = (1 + gap%) × recent high (10-min window)
📉 For shorts: Trigger = (1 – gap%) × recent low
3.5 Maker-Only Order
Ensures your order only adds liquidity (doesn’t cross the spread). If it would execute immediately, it’s rejected.
- Benefits: Lower fees or fee rebates for being a liquidity provider.
- Risk: May not fill during fast-moving markets.
Understanding Maximum Order Size Calculation
The platform displays your maximum possible long or short size based on:
Max Contracts = Available Margin / [Estimated Price × Contract Value × (Initial Margin Rate + 2 × Estimated Fee Rate)]Then converted into:
- USDT value = Contracts × Face Value × Price
- Token amount = Contracts × Face Value
📝 Note:
- Estimated price depends on order type (limit = input price; market = best bid/ask).
- Final contract count is rounded down to whole numbers.
Step 4: Monitoring and Managing Open Positions
After placing an order, monitor its status carefully.
4.1 Order Not Triggered?
Check under:
- 【Active Orders】
- 【Order History】
Pending conditional or limit orders remain here until executed or canceled.
4.2 Order Executed?
View active exposure under:
- 【Current Positions】
How to Close a Position Manually
Tap 【Close】 on the position card to exit at market or limit price.
You can also set:
- Take Profit
- Stop Loss
Either before entry or after opening a position—to automate exits.
What Is Liquidation?
Liquidation occurs when your equity falls below maintenance margin requirements.
- The system forcibly closes your position to prevent further losses.
- In cross-margin mode, this could result in total loss of your USDT balance.
🔐 Pro Tip: Always maintain a healthy margin buffer and avoid over-leveraging.
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These keywords naturally support search queries from users seeking beginner-friendly, actionable guidance on crypto futures trading via mobile apps.
Frequently Asked Questions (FAQ)
Q: What is the safest leverage for beginners?
A: Start with 2x–5x leverage. High leverage magnifies both profits and losses—many new traders lose capital quickly by over-leveraging.
Q: Can I change margin mode after opening a position?
A: No. You must close all positions and cancel pending orders before switching between isolated and cross margin.
Q: Why didn't my limit order fill?
A: It may be too far from the current market price, or the market didn’t reach your specified level. Also, ensure it wasn't entered as a taker order (which converts to market).
Q: How can I avoid liquidation?
A: Use isolated margin, keep extra funds as buffer, set stop-loss orders, and avoid maximum leverage on volatile assets.
Q: What does “maximum可开” mean?
A: It shows the largest position size you can open based on current balance, leverage, and estimated fees.
Q: Are trailing stops effective in crypto markets?
A: Yes—especially in trending markets. They allow profits to run while automatically exiting if momentum reverses.
👉 See how real-time risk management tools can protect your capital.
Final Thoughts
Contract trading opens powerful opportunities—but demands discipline and education. By mastering fund transfers, configuring proper position and margin modes, understanding different order types, and actively managing open trades, you lay a solid foundation for long-term success.
Remember: Start small, practice with test strategies, and never risk more than you can afford to lose.
With clear logic, structured workflows, and disciplined execution, anyone can progress from novice to skilled futures trader—one step at a time.