#TradingTypes101

💹 Trading Types 101

1. Spot Trading

What it is: Buying or selling an asset for immediate delivery.

Example: Buying 1 BTC at $30,000 and it goes directly into your wallet.

Best for: Beginners and long-term holders.

2. Margin Trading

What it is: Borrowing funds to increase trade size (leverage).

Example: With 2x leverage, $1,000 becomes $2,000 in trading power.

Risks: You can lose more than your original investment (liquidation).

3. Futures Trading

What it is: Agreements to buy/sell an asset at a future date for a set price.

Popular in: Crypto, commodities, indices.

Leverage: Often much higher than margin (up to 100x).

Use case: Speculating on price or hedging.

4. Options Trading

What it is: Contracts that give you the right, but not the obligation, to buy/sell at a set price.

Types:

Call = Right to buy

Put = Right to sell

Best for: Advanced traders managing risk or volatility.

5. Scalping

What it is: Very short-term trades (seconds/minutes).

Goal: Profit from small price movements many times a day.

Requires: Speed, technical skills, low fees.

6. Swing Trading

What it is: Holding positions for days or weeks.

Goal: Catch "swings" or trends in price.

Best for: Those who can't monitor charts constantly.

7. Day Trading

What it is: Buying/selling within the same day.

Goal: Profit from daily volatility.

Requires: Strategy, discipline, and time.

8. Arbitrage Trading

What it is: Buying an asset on one exchange and selling on another for a profit.

Example: ETH at $1,800 on Exchange A and $1,810 on Exchange B.

Risk: Low, but requires speed and capital.