For newcomers to the cryptocurrency space, it is strongly recommended to start learning with spot trading, and only consider contracts after fully mastering it
1. Why is spot trading more suitable for newcomers?
1. Risk level
Spot trading: loss limit = principal to zero (e.g., a maximum loss of 1000 yuan if you start with 1000 yuan)
Contracts: Possible liquidation and debt (the higher the leverage, the greater the risk; a 10x leverage drop of 10% results in a 100% loss)
2. Learning curve
Spot only needs to master:
✅ Buy and sell operations
✅ Basic market analysis
✅ Wallet transfer
Contracts need to additionally master:
❗️ Leverage selection
❗️ Margin calculation
❗️ Liquidation price alert
❗️ Funding rate arbitrage
3. Psychological impact
Spot volatility is relatively mild, suitable for cultivating market perception
Severe fluctuations in contracts can lead to emotional trading (a common fatal flaw for newcomers)
2. Hidden thresholds of contracts (easily overlooked by newcomers)
1. Differences in exchange mechanisms
Difference between full warehouse/partial warehouse mode
Differences between USDT-based and coin-based contracts
Difference between marked price and latest price
2. Hidden costs
Funding rate (charged every 8 hours, long-term holdings may accumulate high costs)
Slippage issue (small price differences can trigger liquidation at high leverage)
3. Strategy complexity
Simple spot strategies: dollar-cost averaging, taking profits in batches
Contracts need to be paired with: hedging, grid trading, swing trading, etc.
3. Recommended learning path (phased)
Stage 1: Spot Basics (1-3 months)
Must-learn content
Buy BTC/ETH from the exchange (recommended Binance/OKX)
Learn to check the top 50 tokens on CoinMarketCap
Understand basic indicators such as market capitalization, circulation, and trading volume
Practical operational goals
Complete more than 10 spot trades
Try transferring tokens from the exchange to the wallet
Practical operational goals
Stage 2: Contract Trial (after 6 months)
Preconditions
Spot trading continues to profit for more than 3 months
Can accurately explain concepts such as 'funding rate' and 'liquidation price'
Safety strategies
Initially use leverage below 5 times
Single trades should not exceed 2% of the principal
Must set a stop-loss
Establish your own trading discipline (such as profit-taking and stop-loss rules)
Participate in one bull market cycle to observe market sentiment
4. Key recommendations
1. Start with simulated trading
Both Binance/OKX have contract simulation trading features; it is recommended to simulate for at least 1 month before going live
2. Beware of 'Get Rich Quick Traps'
Social media posts showcasing contract profits usually do not display more liquidation records
3. Remember two formulas
Spot loss speed: Principal × Price drop
Contract loss speed: Principal × Leverage × Price drop
Summary: The first priority for survival in the cryptocurrency space is to stay alive; spot trading is the best starting point for learning. Once you have sufficient understanding of the market, contracts will naturally become a tool rather than a gamble.