Drift Trade — How to Trade Perpetuals on Drift

Overview

Drift is a decentralized derivatives exchange on Solana that offers perpetual futures (perps) with cross-margining, low-latency order execution, and on-chain settlement. This guide explains the practical steps to start trading, order types, position management, and key safety tips so you can trade on Drift confidently.

Before You Start — Checklist

• Wallet: Install a Solana-compatible wallet (Phantom, Solflare, Backpack, etc.).
• Collateral: Hold USDC (or other supported collateral) on Solana to use as margin.
• Network: Ensure your wallet is on the Solana mainnet and funded with a small amount of SOL for fees.
• Read docs: Familiarize yourself with Drift’s margin rules and insurance/liq mechanisms.

Step-by-Step: Connect & Deposit

1. Open the official site: Go to drift.trade and click “Connect Wallet”.
2. Connect your wallet: Approve the connection in your wallet popup. Only connect trusted wallets and verify the URL.
3. Deposit collateral: Navigate to the “Deposit / Wallet” panel and deposit USDC (or supported token) into your Drift margin account.
4. Confirm balance: After deposit, confirm your margin balance and available free collateral before placing trades.

Placing Trades — Order Types

Drift supports common order types; know them before trading:

• Market Order: Immediate execution at current market price. Use when you need instant entry/exit.
• Limit Order: Set a price to buy/sell and only execute if market reaches that price.
• Trigger / Stop Order: Execute a market or limit order when a predefined price is hit (used for stop-loss/take-profit).
• Reduce-Only: Ensure an order only decreases your existing position (avoids accidental increases).

Leverage & Position Sizing

Leverage amplifies gains and losses. Drift offers configurable leverage — choose a level that fits your risk tolerance. A good rule: never use maximum leverage with your full account; size positions so a reasonable price move won’t instantly liquidate you.

1. Decide target position size in USD terms.
2. Choose leverage (e.g., 2x, 5x, 10x) — higher leverage reduces required margin but increases liquidation risk.
3. Check initial margin and maintenance margin requirements shown by the UI before confirming the trade.

Managing Positions

• Monitor PnL: Watch unrealized PnL and margin usage in the positions panel.
• Use stop-loss: Place stop or trigger orders to limit downside automatically.
• Add margin: If margin usage rises, deposit more collateral or reduce position size to avoid liquidation.
• Close or reduce: Use market/limit orders or the reduce-only flag to unwind risk.

Liquidation & Insurance

Drift auto-liquidates positions that fall below maintenance margin; part of fees and an insurance fund exist to cover shortfalls. Understand the liquidation price and maintain a comfortable buffer above it to avoid sudden forced closures.

Fees & Funding

Perpetuals charge trading fees (maker/taker) and funding payments that periodically transfer between long and short sides to keep perp prices aligned with the spot market. Check the market’s funding rate and historical values before holding large positions.

Advanced Tips

• Use limit orders to improve execution price and reduce taker fees.
• Split large orders into smaller slices to reduce market impact.
• Employ cross-margin carefully — it pools collateral across positions and can improve capital efficiency but raises systemic exposure.
• Backtest simple strategies off-chain before executing significant capital on-chain.

Common Issues & Fixes

1. Wallet not connecting: Refresh the page, reconnect your wallet, or try a different wallet provider.
2. Deposit not credited: Confirm the on-chain tx and allow for network finality; if still missing, check Drift’s support channels.
3. Stuck or failed orders: Verify transaction status on a Solana explorer and re-submit if necessary.

Security & Best Practices

• Only use the official site and bookmark it.
• Keep wallet software updated and protect seed phrases (never share them).
• Start small and scale up as you become comfortable with the platform’s mechanics.
• Consider using separate wallets for trading vs. long-term storage (cold storage).