Although you may not be able to make much money by playing spot in the cryptocurrency circle, at least you will be able to break even with a high probability, and it is almost impossible to lose a lot of money. Of course, the premise varies from person to person. It is difficult for a novice who has just entered the market to do this, but I believe that old leeks who have experienced two rounds of bull and bear markets can basically make money easily in the spot market. As long as you have enough knowledge about the cryptocurrency circle, it is almost impossible to lose money in the spot market. People who understand will naturally understand whether what I said is right or not. Recently, I have been thinking about why there are many more people in the cryptocurrency circle who make money through spot than through futures. In summary, there are several reasons:
1. Investor awareness: Spot trading usually has no leverage and slow capital accumulation. Those who hold spot trading are often people with large capital. They usually have achievements in other industries and are not in a hurry to make a fortune. They can live well even without the cryptocurrency circle. Most people who play contracts have less than $100,000 in capital. This group of people can go up or down, and many people cannot resist the temptation of overnight success.
2. Cyclicity: Spot is a long-term investment with a high tolerance for error; contracts are short-term with a low tolerance for error. The high handling fees and funding rates of contracts require you to make judgments in a short period of time, but the short-term market is highly random, and once the judgment is wrong, it will cause actual losses; the floating losses of spot are relatively easy to accept.
3. Psychological pressure: It is difficult for people who play contracts to have a good sleep. The first thing they do when they wake up in the middle of the night is to check whether the market has exploded, and they even dream about it. Spot trading is completely different. You can sleep at any time without worrying about explosions, and you have more time to do what you like.
In summary, if you want to make steady profits in the spot market, you must do the following two things:
1. Don’t invest if you don’t understand: The most important point. Many people have invested heavily in Ethereum but have never done in-depth research, just following the trend. If you really understand the investment target, you won’t complain about price fluctuations. People who lose money often invest all their funds in targets that they have not studied, and once the market is not good, they panic and sell at a loss.
2. Grasp the entry opportunity: Even if you have done a thorough research, you cannot enter the market blindly. No matter how good an asset is, if it rises to a high level, do not chase it because of FOMO. Wait until the price falls back to a reasonable level before buying. Just like Nvidia is a good company, but a good company may not make money immediately. If there is no suitable opportunity, wait for the next one. Don't have the mentality of "I must do this or that" when investing. Patience is necessary.
In short, the key to making money stably in spot trading is: first, don't invest if you don't understand; second, find the right entry point. This point is not necessarily the absolute low point, but the relative low point. What is the relative low point? It means that when others are selling, you take over, instead of following the trend when everyone is buying. This makes it easier to avoid getting hurt. I am the captain, and I hope we can all continue to make money.
Brothers who often blow up their positions and have no opening direction, please follow me and join the zone. I will post the opening direction every day to help everyone make a profit and win back what they have lost. Making money is actually very simple. The key is to follow the right people.