1️⃣ In the cryptocurrency world, playing spot trading may not guarantee how much you earn, but at least it won't lead to significant losses. Of course, this depends on the person; for a newcomer, it can be very difficult to achieve this. I believe that seasoned traders who have experienced two cycles of bull and bear markets can generally make steady profits in spot trading easily, as long as their understanding of the cryptocurrency market is adequate. It is almost impossible to lose money in the spot market if you know what you're doing. Those who understand naturally know if I’m right or wrong. Recently, I’ve been pondering this issue: why are there so many more people making money in the cryptocurrency market through spot trading compared to futures? I’ve summarized a few reasons.
2️⃣ The cognitive level of investors: Spot trading usually lacks leverage, and the capital accumulation is slow, so those who generally hold spot assets are often individuals with a large capital base. This group of people has likely achieved a certain level of success in other industries outside the cryptocurrency market, so they are not in a hurry to achieve results. They can live well without the cryptocurrency market. In contrast, the futures trading crowd usually has less than $100,000; these individuals can go up or down. When prices soar, they feel invincible, but when they crash, they have to restart, which makes it hard for most people to resist the temptation of getting rich quickly.
3️⃣ Periodicity: Spot trading tends to have a longer cycle and higher tolerance for errors, while futures trading has a shorter cycle and lower tolerance for errors. The high transaction fees and funding rates in futures trading force you to make decisions within a relatively short timeframe. We know that market trends, especially short-term trends, are largely random. If you make a wrong judgment, you face the risk of real monetary loss, whereas spot trading only involves unrealized losses.
4️⃣ Psychological pressure: Those who have experienced it know that trading futures makes it impossible to sleep well. The first thing you do when you wake up in the middle of the night is to check your phone to see if you’ve been liquidated. You dream of liquidation scenarios and before sleeping, you keep staring at a market that doesn’t fluctuate until you can’t bear it anymore and quietly add some margin before daring to sleep again. Spot trading, on the other hand, is completely different; I can sleep anytime I want without worrying about liquidation and have plenty of time to do what I want.
5️⃣ Don’t invest in what you don’t understand: I believe this is the most significant reason among all. I see many people complaining that Ethereum isn’t rising, indicating that many people are heavily invested in Ethereum. However, I can guarantee that at least 80% of these people haven’t researched Ethereum in depth; they just think it’s good because others say so. If you truly understand what you are buying, you certainly wouldn’t lash out at it for not rising. Many people lose money simply by throwing all their money into something they haven’t researched thoroughly. Once the market goes against them, they fall into endless doubt and panic, ultimately leading to self-inflicted losses.
6️⃣ Timing of entry: Just because you’ve researched and confirmed something is good doesn’t mean you should mindlessly jump into something that’s skyrocketing. Even if it’s great, don’t chase it due to emotional FOMO; wait for a discount to buy. For example, with Nvidia, we must acknowledge that it is an excellent company, but a good company doesn’t always equate to making money. If you miss an opportunity, look for the next one. In investment, you must avoid the mindset of 'I have to do this' or 'I must achieve that.' Appropriate waiting is necessary; a good hunter doesn’t fire recklessly.#中心化与去中心化交易所 #交易类型入门 #PCE数据来袭 #加密市场回调 #币安Alpha上新