Futures Trading Changes Everything
Spot trading = buy low, sell high.
Futures trading = profit from up AND down moves with leverage.
But picking the wrong coin? Liquidation in minutes.
The key: Select coins with explosive potential and manageable risk.
Here's the exact framework professionals use.
The 5 Non-Negotiable Criteria
Every coin MUST pass all five filters. Miss one = skip it.
1. High Liquidity (Volume)
Minimum requirement: $50M+ daily trading volume
Why it matters:
Low liquidity = massive slippage. Your orders move the market. Can't exit positions quickly.
High liquidity = smooth entries and exits. Tight spreads. Can trade size without problems.
Where to check:
CoinGecko 24h volume
Exchange volume specifically
Compare volume to market cap (should be 10%+ of market cap daily)
Red flag: Volume suddenly 10x higher than average = possible pump and dump.
Example:
✅ SOL: $2.5B daily volume = Perfect for futures ❌ Random altcoin: $5M daily volume = Avoid futures
2. Volatility Sweet Spot
Target range: 5-15% daily price swings
Why this matters:
Too stable (1-3% moves) = Hard to profit, low leverage opportunities
Perfect range (5-15%) = Enough movement for gains, manageable risk
Too volatile (30%+ moves) = Instant liquidations, impossible to manage
How to measure:
Look at past 30 days:
Count days with 5%+ moves
Should be 15-20 out of 30 days
Avoid coins with 3 days of 30%+ swings (too wild)
Where to check:
TradingView historical chart
CoinGecko price statistics
Check ATR (Average True Range) indicator
Example:
✅ ETH: Averages 6-8% daily moves = Great futures candidate ❌ Meme coin: 50% swings daily = Liquidation machine
3. Clear Technical Structure
Must have identifiable:
Support and resistance levels
Trend direction (up, down, or range)
Chart patterns that respect levels
Why this matters:
Futures requires precise entries and stops. Without clear levels, you're gambling.
What to look for:
✅ Price bounces off same support 3+ times ✅ Resistance holds multiple tests ✅ Trends are clean, not choppy ✅ Volume confirms price moves
❌ Price action is random ❌ No respect for levels ❌ Constant whipsaws
How to evaluate:
Open 4-hour chart. Can you draw 2-3 horizontal lines where price clearly reacted? If yes, it has structure. If no, skip it.
Example:
✅ BTC: Clear $89k support, $96k resistance = Tradeable range ❌ New altcoin: Random price action = Avoid
4. Upcoming Catalysts
Look for scheduled events:
Major exchange listings
Protocol upgrades/launches
Partnership announcements
Token unlocks (can be bullish OR bearish)
Conference presentations
Mainnet launches
Why this matters:
Futures profits from momentum. Catalysts create momentum.
Where to find catalysts:
Coin's official Twitter/Discord
CoinMarketCap events calendar
Token unlock schedules (use tokenterminal.com)
Crypto news sites
Exchange listing announcements
Timeline sweet spot:
1-4 weeks before event = Best entry window Day of event = Usually "sell the news" After event = Momentum often fades
Example:
✅ SOL before Alpenglow upgrade announcement = Clear catalyst ✅ Token before Binance listing = Predictable pump ❌ Random coin with no upcoming events = No edge
5. Positive Funding Rate Trend
What is funding rate?
In futures, longs pay shorts (or vice versa) every 8 hours. Shows market sentiment.
What to look for:
Neutral to slightly positive (0% to +0.05%) = Healthy Extremely positive (+0.1%+) = Too many longs, risky Negative = More shorts than longs, potential squeeze
Why this matters:
Extremely high funding = everyone's already long = no one left to buy = top is near
Where to check:
Exchange futures page
Coinglass.com funding rates
TradingView funding indicator
Strategy:
✅ Enter when funding is neutral/low ✅ Exit when funding spikes above +0.1% ❌ Avoid entering when funding already extreme
The Scoring System
Rate each coin 0-2 points per criterion:
Liquidity:
2 points: $200M+ daily volume
1 point: $50M-$200M volume
0 points: Under $50M
Volatility:
2 points: 8-12% average daily range
1 point: 5-8% or 12-15% range
0 points: Under 5% or over 15%
Technical Structure:
2 points: Crystal clear levels, respects them perfectly
1 point: Some structure, occasional respect
0 points: Random/choppy
Catalysts:
2 points: Major catalyst in 1-3 weeks
1 point: Minor catalyst or 4+ weeks away
0 points: No catalysts
Funding Rate:
2 points: Neutral (0% to +0.03%)
1 point: Slightly elevated (+0.03% to +0.08%)
0 points: Extreme (above +0.08% or below -0.05%)
Minimum score to trade: 7/10
Anything under 7 = too risky for futures.
Real Coin Analysis Examples
Bitcoin (BTC) - Score: 9/10
✅ Liquidity: 2/2 ($30B+ volume) ✅ Volatility: 2/2 (6-8% daily moves) ✅ Structure: 2/2 (Clear $89k-$96k range) ✅ Catalyst: 1/2 (Institutional inflows ongoing) ✅ Funding: 2/2 (Currently +0.02%)
Verdict: Excellent futures candidate
Ethereum (ETH) - Score: 8/10
✅ Liquidity: 2/2 ($15B+ volume) ✅ Volatility: 2/2 (7-10% moves) ✅ Structure: 2/2 ($3,000 support clear) ✅ Catalyst: 1/2 (Ongoing developments) ✅ Funding: 1/2 (Slightly elevated at +0.06%)
Verdict: Good futures candidate
Random Low-Cap Altcoin - Score: 3/10
❌ Liquidity: 0/2 ($8M volume) ✅ Volatility: 2/2 (Huge moves) ❌ Structure: 0/2 (No clear levels) ❌ Catalyst: 0/2 (Nothing scheduled) ✅ Funding: 1/2 (Low but sketchy data)
Verdict: AVOID for futures
Leverage Guidelines by Score
Score 9-10: Up to 10x leverage Score 7-8: Max 5x leverage Score 5-6: Max 3x leverage or skip Score below 5: NO FUTURES TRADING
Remember: Higher leverage = faster liquidation. Even great coins can wick and liquidate you.
The Weekly Selection Process
Sunday routine (30 minutes):
List 10-15 coins you're interested in
Run each through the 5 criteria
Score each coin
Select top 3 scorers (7+ points)
Set alerts on these coins
Wait for optimal entry setups
During the week:
Only trade the pre-selected coins. No random FOMO into other coins.
Why this works:
Removes emotion. You did analysis when calm, not during price action.
Red Flags - Never Trade Futures On:
❌ Newly listed coins (under 90 days old) ❌ Meme coins without strong communities ❌ Coins with single exchange volume (delisting risk) ❌ Tokens with upcoming massive unlocks ❌ Projects with team/legal drama ❌ Anything pumping 50%+ in 24 hours already
These are liquidation traps.
Risk Management Checklist
Before opening ANY futures position:
✅ Coin scored 7+ on criteria ✅ Entry level identified (support/resistance) ✅ Stop loss set (tight for futures!) ✅ Position size calculated (max 3-5% account risk) ✅ Leverage decided (lower is safer) ✅ Exit targets planned ✅ Funding rate acceptable
Missing any? Don't trade.
The Truth About Futures
Futures can 10x your gains. They can also 10x your losses.
90% of futures traders lose money because:
They pick coins randomly
They use too much leverage
They have no selection criteria
They trade emotionally
The 10% who profit use systems like this.
Selection isn't sexy. Checklists aren't exciting.
But they keep you out of bad trades and in good ones.
That's the difference between profit and liquidation.
Your Action Plan
Today:
Screenshot the 5 criteria
Score your current watchlist
Eliminate anything under 7/10
This week:
Paper trade only coins that score 7+
Track results in journal
Refine your scoring
Next week:
Start with real futures (small size!)
Never skip the selection process
Build the habit
This is educational content about futures selection criteria, not financial advice. Futures trading involves substantial risk including total loss of capital. Only trade with money you can afford to
