Tracking Your Realized and Unrealized Gains

Tracking Gains: Spot Holdings Versus Futures Positions

Welcome to trading. As you begin, understanding how to measure your success is crucial. This guide focuses on tracking your financial results across both your long-term holdings in the Spot market and your short-term activities using Futures contracts. The main takeaway for a beginner is to treat your spot portfolio as the foundation and use futures for calculated adjustments, not speculation alone. We will cover simple ways to balance these two areas while maintaining a safety-first approach.

Realized vs. Unrealized Gains

When managing crypto assets, you will encounter two types of profit or loss measurements:

• **Unrealized Gains/Losses:** This is the current theoretical profit or loss on assets you still own. If you bought Bitcoin at $30,000 and it is now $35,000, your $5,000 gain is unrealized until you sell. This number changes constantly.
• **Realized Gains/Losses:** This profit or loss occurs only after you close a position—either by selling your spot asset or by closing out a futures trade (e.g., buying back a short position or selling a long position). Realized gains are locked in and impact your net worth immediately.

Tracking realized gains from futures is vital because these small, frequent trades fund your trading activity, while unrealized gains in your spot portfolio represent your long-term growth. Effective management involves Using Futures to Protect Existing Spot Gains without letting small futures wins distract you from the larger spot picture.

Practical Steps: Balancing Spot and Simple Hedges

For beginners, the goal of using futures should often be risk management, not just aggressive leverage. A good starting point is learning First Steps in Partial Hedging Strategy.

Step 1: Establish Your Core Spot Holdings

Your primary assets should remain in your secure spot holdings. These are the assets you intend to hold for the medium to long term. Understand your Spot Market Liquidity Considerations before deciding how much you can safely allocate to active trading.

Step 2: Implement Partial Hedging

If you are concerned about a short-term market correction impacting your spot assets, you can use a futures contract to create a temporary hedge. This is a form of Hedging Against Sudden Market Downturns.

A partial hedge means you do not try to perfectly offset 100% of your spot position.

• **Action:** If you hold 1 BTC in your spot wallet, you might open a short Futures contract equivalent to 0.25 BTC.
• **Result:** If the market drops 10%, your spot holding loses 10% of its value, but your 0.25 BTC short position gains value, offsetting some of the loss. This is an example of a Spot Purchase Paired with a Small Short.
• **Benefit:** This strategy aims at Reducing Portfolio Variance with Futures rather than trying to time the exact top or bottom.

Step 3: Set Strict Risk Limits

Never trade futures without defined risk parameters. This is critical when dealing with leverage. Always know your liquidation price. Review guides on Setting Firm Leverage Limits for Safety and ensure you are familiar with The Basics of Cross and Isolated Margin in Crypto Futures.

• Use strict stop-loss orders. This is essential for - Discover how to set effective stop-loss orders to limit losses and manage risk in high-leverage futures markets.
• Limit the total capital risked on any single trade to a small percentage of your total portfolio, perhaps 1% to 2% initially, following the principle of Using a Fixed Percentage Risk Per Trade.

Using Indicators for Timing Entries and Exits

Technical indicators help provide context, but they are not crystal balls. They work best when used together and when you have a good understanding of Recognizing Market Structure Before Trading.

Relative Strength Index (RSI)

The RSI measures the speed and change of price movements.

• Readings above 70 often suggest an asset is overbought (potentially due for a pullback).
• Readings below 30 suggest an asset is oversold (potentially due for a bounce).
• **Caveat:** In a strong uptrend, RSI can remain overbought for a long time. Do not automatically sell just because RSI hits 70; look for confirmation near major Support and Resistance Zone Identification. Successful traders often look for Using RSI Divergence for Entry Signals.

Moving Average Convergence Divergence (MACD)

The MACD shows the relationship between two moving averages.

• A bullish crossover (MACD line crosses above the signal line) can suggest upward momentum.
• A bearish crossover suggests momentum is slowing down.
• **Caveat:** The MACD can give false signals (whipsaws) in choppy markets. Pay close attention to the MACD Histogram for Momentum Shifts to gauge the strength behind the crossover.

Bollinger Bands

Bollinger Bands consist of a middle moving average and two outer bands that measure volatility.

• When bands contract (squeeze), volatility is low, often preceding a large move.
• When price touches the upper band, it may be relatively high compared to recent volatility.
• **Caveat:** Touching the upper band does not guarantee a reversal; it just means the price is extended relative to the current volatility envelope. Look for confluence with other tools, perhaps Bollinger Bands Combined with Moving Averages. Remember When to Use a Long Hedge Versus Short.

Psychology and Risk Management Pitfalls

Your biggest threat is often your own decision-making process, especially when dealing with the high stakes of futures trading.

Fear of Missing Out (FOMO)

FOMO causes you to chase moves that have already started, often leading to poor entry prices. If you see a massive price spike and jump in without analysis, you are likely buying near a short-term peak. Stick to your plan; there will always be another trade.

Revenge Trading

After a loss, the urge to immediately trade again to "win back" the money is powerful. This is called revenge trading and almost always leads to larger losses because you abandon your established rules. Focus on Managing Risk Across Spot and Futures rather than trying to erase a single loss instantly.

Overleverage

Leverage magnifies both gains and losses. A small adverse price move can wipe out your entire margin if you use excessive leverage. Always define your maximum acceptable loss using Defining Acceptable Stop Loss Placement. When taking profits on futures, consider Taking Partial Profits on Futures Trades to secure capital.

Practical Sizing and Risk Example

Let us look at a simplified scenario for managing a small portion of your spot holding using a futures hedge. Assume you hold 1 ETH in your spot wallet, currently valued at $3,000. You fear a short-term drop to $2,800.

You decide to hedge 25% of your position using a short futures contract.

Scenario Component	Value / Action
Spot Holding	1 ETH ($3,000)
Hedged Portion (25%)	0.25 ETH
Futures Trade	Short 0.25 ETH equivalent
Price Drop (Market moves to $2,800)	-$200 per ETH (6.67% drop)
Spot Loss Calculation	1 ETH * $200 = $200 loss
Futures Gain Calculation	0.25 ETH * $200 gain = $50 gain
Net Loss (Before Fees)	$200 (Spot Loss) - $50 (Futures Gain) = $150 Net Loss

In this example, the futures trade reduced your loss from $200 to $150. This reduction helps protect your capital base while you wait for the market to find a clearer direction, allowing you to maintain your core position. Be aware that Fees and Slippage Impact on Small Trades will slightly reduce this net gain. If you are using expiring contracts, understand the Futures Contract Expiry Mechanics. For more depth on market mechanics, review The Role of Support and Resistance in Futures Trading for New Traders.

By keeping your spot holdings stable and using futures strategically for small hedges or tactical trades, you build experience while minimizing the impact of volatility on your overall portfolio value. Always prioritize capital preservation over chasing high returns.

Recommended Futures Trading Platforms

Platform	Futures perks & welcome offers	Register / Offer
Binance Futures	Up to 125× leverage, USDⓈ-M contracts; new users can receive up to 100 USD in welcome vouchers, plus lifetime 20% fee discount on spot and 10% off futures fees for the first 30 days	Sign up on Binance
Bybit Futures	Inverse & USDT perpetuals; welcome bundle up to 5,100 USD in rewards, including instant coupons and tiered bonuses up to 30,000 USD after completing tasks	Start on Bybit
BingX Futures	Copy trading & social features; new users can get up to 7,700 USD in rewards plus 50% trading fee discount	Join BingX
WEEX Futures	Welcome package up to 30,000 USDT; deposit bonus from 50–500 USD; futures bonus usable for trading and paying fees	Register at WEEX
MEXC Futures	Futures bonus usable as margin or to pay fees; campaigns include deposit bonuses (e.g., deposit 100 USDT → get 10 USD)	Join MEXC

Join Our Community

Follow @startfuturestrading for signals and analysis.