If trading cryptocurrencies is a game, then 'spot trading' is the starting point of this game.

Many newcomers get confused by terms like 'spot', 'contract', and 'leverage' right at the first step; it's actually not that complicated. Today, let's first discuss spot trading.

🔍 What is spot trading?

In simple terms: you use money to buy cryptocurrencies, and then that cryptocurrency genuinely belongs to you. You can sell it if you want or keep it. This is called spot trading.

For example, if you used 100U to buy 0.001 BTC, regardless of whether BTC rises or falls, that 0.001 BTC is yours. You can check it in your wallet anytime and sell it whenever you want.

🔁 How to make money in spot trading?

The core idea of spot trading is two words: buy low, sell high.

✔️ Buy when everyone is pessimistic (price is low).

✔️ Sell when everyone is shouting 'go for it!' (price is high).

Here's an example 🌰:

If you bought BTC at 20,000 and later sold it at 30,000, the price difference of 10,000 is your profit.

Of course, conversely, if you buy when the price drops from 30,000 to 20,000, you must be mentally prepared to bear the loss.

📌 The suitable aspect for beginners is:

  • No forced liquidation, no margin call; if you can hold it, it won't go to zero.

  • Helps to understand the operating logic of the crypto world; it is a path every veteran has walked.

  • No need for leverage; the risk is relatively controllable.

❗ But don't be complacent:

  • Does not mean guaranteed profit; don't blindly go all in on popular coins.

  • Cryptocurrency prices fluctuate greatly; don't frequently trade for small profits.

  • Be clear about heavy and light positions; don't turn your living expenses into impulsive funds.


📣 Interactive question:

What was your first spot trade? Which coin and at what price? Looking back now, was it a 'brilliant move' or did you 'regret it to tears'?

Feel free to share in the comments and learn from each other!

If you find this article helpful, don't forget to like and follow. I will continue updating this [Beginner's Guide to Crypto] series to help you start from scratch and understand every key concept in the crypto world.

In the next issue, let's talk about: 'What is the difference between contract trading and spot trading?'
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