Understanding different types of trading is key to creating an effective strategy in the crypto market. Spot, margin, and futures trading each have their own features, advantages, and risks that should be considered depending on your goals and experience.

Spot trading is the simplest type of trading, where you buy or sell assets at the current market price with immediate settlement. For example, you buy 1 BTC for $60,000 and immediately receive the coins. This is ideal for beginners due to its low risk and simplicity, but profits depend solely on the price increase of the asset.

Margin trading allows you to trade with borrowed funds, using leverage (e.g., 5x). This increases potential profits, but also risks: if the market goes against you, you can lose more than your initial capital.

Futures trading involves trading contracts for the future price of an asset. You can profit from a market decline by using short positions, and leverage further amplifies potential profits. However, futures are more complex due to contract expiration dates and the high risk of liquidation.