What Are Perps? (2026 Beginner's Guide)
Perps (perpetual futures) are the most popular way to trade crypto with leverage, and this guide takes you from zero to your first trade. Perpetual futures are derivative contracts that let you trade an asset's price without owning it and without an expiration date. You can go long to profit when prices rise, or go short to profit when prices fall. A funding rate settles every 8 hours to keep the contract price close to the spot market. Perps are available for crypto (BTC, ETH, SOL, and 100+ others), stocks, commodities, and forex. You deposit USDC as collateral and pick your leverage, from 2x up to 50x depending on the asset. This guide explains how perps work, how to set up your wallet, and walks you through placing your first trade step by step.
Here is the short version: you need a crypto wallet, some USDC, and about 10 minutes to get set up. You can start with as little as $10-50, though $100-500 gives you more room to learn properly. The process is: set up a wallet, deposit USDC, pick a liquid market like BTC or ETH, place a small trade with low leverage and a stop-loss, and manage your position.
What Are Perps (Perpetual Futures)?
Perps, short for perpetual futures contracts, are contracts that let you bet on the price of an asset - crypto, stocks, commodities, or forex - without actually buying or owning it. Unlike traditional futures that expire monthly, perps have no expiration date, so you can keep positions open as long as your margin covers it.
They let you:
- Go long (profit when the price rises)
- Go short (profit when the price falls)
- Use leverage (control a larger position with less capital)
- Hold indefinitely (no expiration date)
The price of a perp stays close to the real market price through funding rates. Every 8 hours, one side of the market (longs or shorts) pays a small fee to the other side. This keeps the perp price in line with the actual asset price.
On Perpmate, perps use USDC collateral and track assets like BTC, ETH, SOL, HYPE, memecoins (PEPE, TRUMP, PUMP), stock indexes (NVDA, TSLA, GOOGL), and prediction markets.
Why Traders Use Perps
Perpetual futures dominate crypto trading with over $2T+ in daily volume. Here is why:
- Long and short - profit whether the price goes up or down
- Leverage - trade with 2x-40x exposure using less capital. Learn more in our leverage guide
- No expiry - keep positions open as long as you maintain margin
- Tight price tracking - funding keeps perp price aligned to spot
- On-chain transparency - Perpmate settles trades on-chain with Hyperliquid's engine
- One collateral for everything - USDC works for BTC perps, ETH perps, memecoins, indexes, and more
Spot vs Perps: Key Differences
| Property | Spot Trading | Perpetual Futures (Perps) |
|---|---|---|
| Ownership | You own the asset | You hold a derivative contract |
| Expiry | No | None (perpetual) |
| Direction | Only profit if price rises | Long or short |
| Leverage | No | Yes (1x-40x) |
| Liquidation | No | Yes |
| Collateral | The asset itself | USDC (on Perpmate) |
| Fees | Simple | Trading + funding |
Spot is for holding. Perps are for active trading.
Key Concepts Before You Trade
Before you put any money in, make sure you understand these ideas. They come up in every single perp trade:
Leverage
Leverage lets you control a bigger position than what you deposited. With 10x leverage, your $100 controls a $1,000 position. Bigger potential profits, but your losses get multiplied the same way.
| Leverage | Position Size on $100 | Liquidation Distance |
|---|---|---|
| 2x | $200 | ~50% move against you |
| 5x | $500 | ~20% move against you |
| 10x | $1,000 | ~10% move against you |
| 20x | $2,000 | ~5% move against you |
Read our full leverage trading guide.
Liquidation
If your trade loses too much, the exchange automatically closes it. This is called liquidation, and it means you lose the money you put into that trade. Higher leverage = smaller price move to trigger it.
See how liquidation works for formulas, examples, and prevention strategies.
Funding Rates
Perps use funding rates to stay priced correctly. If you hold a position for more than 8 hours, you either pay or receive a small fee. Think of it like a holding cost - the longer you keep a trade open, the more these fees add up.
Position Sizing
This is about how much of your account you put on the line with each trade. Get this wrong and one bad trade can wipe you out. Our position sizing guide shows you the math.
Set Up Your Wallet
On decentralized perp exchanges like Perpmate, your crypto wallet is your account. No signup forms, no email, no uploading your ID.
You will need:
- A crypto wallet - MetaMask, Trust Wallet, or any other EVM-compatible wallet.
- USDC on Arbitrum - Most perp DEXs use USDC (a stablecoin worth $1) as your trading balance. You will need USDC on the Arbitrum network.
- A small amount of ETH for gas - This covers the tiny transaction fees for using the blockchain (usually less than $0.10 per trade).
For a detailed walkthrough, see our wallet connection guide.
How to Get USDC If You Are Starting From Scratch
- Buy crypto on a centralized exchange (Coinbase, Kraken, Binance) and withdraw USDC to your wallet address on Arbitrum or Base.
- Swap or bridge crypto you already have - If you hold Bitcoin, Solana, Ethereum, or any other token on any chain, you can swap or bridge it to USDC on Arbitrum using a cross-chain swap. No centralized exchange needed.
Choose Your First Market
Not all markets are beginner-friendly. Start with popular, high-volume assets where prices move more predictably:
| Asset | Why It's Good for Beginners |
|---|---|
| BTC | Highest trading volume, smallest price gaps, smoothest price movement |
| ETH | Very popular, moves similarly to BTC, lots of traders in the market |
| SOL | High volume, good for learning to trade with momentum |
Avoid starting with memecoins, small altcoins, or leveraged stock perps. These have bigger price gaps between buy and sell orders, wilder price swings, and higher holding costs.
How to Place Your First Trade on Perpmate
1. Connect Your Wallet
Go to Perpmate and click "Connect Wallet." Select your wallet provider and approve the connection. No personal information is required.
2. Deposit Collateral
Deposit USDC from your wallet. This becomes your trading balance - the money that backs your trades.
3. Select a Market
Choose the trading pair you want to trade (e.g., BTC-USD, ETH-USD).
4. Go Long or Short
- Long if you think the price will go up
- Short if you think the price will go down
5. Set Your Leverage and Size
Start with 2x to 5x leverage as a beginner. Risk no more than 1-2% of your total account on any single trade.
6. Set a Stop-Loss
Before you confirm, set a stop-loss order. This automatically closes your position if the price hits a certain level, capping your maximum loss.
7. Confirm and Monitor
Review your entry price, leverage, position size, liquidation price, and stop-loss. Confirm the trade. You can monitor your open position and current profit or loss from your portfolio dashboard.
Example: Long Trade
- You long BTC at $85,000
- BTC moves to $86,700 (+2%)
- Using 10x leverage, your return = +20% on your margin
Example: Short Trade
- Short ETH at $3,000
- ETH drops to $2,940 (-2%)
- Using 10x leverage, your return = +20% on your margin
To close a position, tap close position. You can also check our detailed guide on how to close a perp position.
Manage Your Trade
Watch Your Liquidation Price
Always know where your liquidation price is. If the market moves toward it, consider reducing your position or adding margin rather than hoping for a reversal.
Account for Funding Rates
If you hold a position for more than 8 hours, funding rates kick in. Check the current rate before entering - if it is high, it eats into your profits.
Know When to Exit
Decide your exit strategy before you enter the trade:
- Take-profit level: Where will you close for a gain?
- Stop-loss level: Where will you close to cut losses?
- Time-based exit: Will you close before a funding interval if the trade is flat?
Having a plan keeps you from making emotional decisions, which is the number one reason traders lose money.
Common Beginner Mistakes to Avoid
Using Too Much Leverage
The most common mistake. 20x-50x leverage looks attractive, but it means a 2-5% move wipes out your margin. Start low, increase only as your skill develops.
Trading Without a Stop-Loss
"It will come back" is the most expensive sentence in trading. Always set a stop-loss. The market does not care about your entry price.
Risking Too Much Per Trade
Betting 50% of your account on one trade is gambling, not trading. Experienced traders risk 1-2% per trade because they know losses are part of the game.
Ignoring Funding Rates
Holding a position through multiple funding intervals without checking the rate can quietly drain your account. A 0.1% funding rate at 10x leverage costs 1% of your margin every 8 hours.
Revenge Trading
After a loss, the urge to "make it back" leads to oversized, emotional trades that usually make things worse. If you lose a trade, step away. Trade again later with a clear head.
Common Issues and Quick Fixes
Insufficient Margin
Add more USDC on Arbitrum or reduce your leverage.
Funding Too High
Reduce position size or consider the opposite direction.
Liquidation Risk
Add collateral or sell part of your position to lower the liquidation price.
Order Failing
Retry again, make sure you have enough USDC in your balance and a stable connection.
Your First Week: A Practical Schedule
| Day | Activity |
|---|---|
| Day 1-2 | Read this guide and the leverage guide. Set up your wallet. |
| Day 3 | Deposit a small amount ($50-100). Place one trade on BTC with 2x leverage and a stop-loss. |
| Day 4 | Review your first trade regardless of outcome. Read the position sizing guide. |
| Day 5 | Place 2-3 small trades. Focus on the process: entry reasoning, stop-loss placement, exit execution. |
| Day 6 | Read the funding rates guide. Hold one position through a funding interval to see how it works. |
| Day 7 | Review all trades from the week. Write down what worked and what didn't. Read why traders lose money. |
The goal of your first week is not to make money. It is to learn the mechanics and build discipline.
What to Learn Next
- Cross Margining - How to use your portfolio as shared collateral
- Funding Rates - How to factor holding costs into your strategy
- Trading Psychology - Why most traders fail and how to avoid it
- 10 Perp Trading Rules - Risk management dos and don'ts every trader should follow
Detailed Guides for Popular Perps
- Guide for Bitcoin Perps
- Guide for Ethereum Perps
- Guide for Solana Perps
- Guide for Hype Perps
- Guide for BNB Perps
Summary
Starting perp trading is straightforward: understand the concepts, set up your wallet, choose a liquid market, place a small trade with conservative leverage and a stop-loss, and manage it with discipline. The traders who succeed long-term are the ones who treat learning as the priority and capital preservation as the first rule.
Start small. Learn the mechanics. Build discipline. The markets will be there tomorrow.
Disclaimer: Trading perpetual contracts involves significant risk, including the potential for sudden and total loss of your investment and collateral due to high leverage and market volatility, and may not be suitable for all users. Prices may be influenced by funding rates and liquidity and you may be subjected to automatic liquidations without notice. Always do your own research (DYOR) before making any trading decisions.