💰Must-Read for Newcomers! Cryptocurrency Beginner's Guide from 0 to 1: Pitfall Avoidance Guide | Spot vs. Contract Bump Guide
🚨 Why do I advise you to start with spot trading? 3 major differences every newcomer must understand
1. Risk levels are worlds apart
✅ Spot: You can only lose your principal (if you invest 1000U, you can lose a maximum of 1000U)
❌ Contract: With 10x leverage, a 10% drop can lead to liquidation, potentially leaving you in debt to the platform!
2. Learning costs are not on the same level
✨ For spot trading, you only need to master:
✅ Buying coins on exchanges (Binance/OKX beginner-friendly tutorial)
✅ Understanding price charts (MA moving averages/intro to trading volume)
✅ Wallet transfers (don't convert ERC20 to TRC20!)
💥 For contracts, you need to additionally learn:
❗️ Full position/isolated position (losing all margin with full position)
❗️ Liquidation price calculation (formula: margin ÷ (leverage × contract value))
❗️ Funding rates (mutual payments between long and short positions, long-term holdings may incur losses)
3. Psychological impact varies
You can stay calm and play dead if spot drops 30%
But a 5% drop in contracts could wake you up at midnight due to liquidation
Hidden traps in contracts! 90% of newcomers have stepped into these pitfalls
1. Exchange mechanism traps
▪️ USDT-based (opening positions with USDT) vs. Coin-based (opening positions with BTC)
▪️ Mark price ≠ real-time price (liquidation calculated based on mark price, which could lead to a 5% extra loss)
2. Cost assassins
💸 Funding rates: charged every 8 hours; in a bull market, going long incurs 0.1% daily, leading to 10% extra cost in 100 days!
💸 Slippage: with 100x leverage, a price difference of 0.5% when placing an order may lead to immediate liquidation
📈 Newcomer's learning path: steady and phased
Phase 1: Practice with spot trading (1-3 months)
✅ Essential tasks
1. Use 100U to buy BTC/ETH (experience the entire deposit and withdrawal process)
2. Check the trends of the top 10 coins on CoinMarketCap every day
3. Practice dollar-cost averaging: invest 50U weekly for 3 months
💡 Goal: Understand "Market Cap = Price × Circulation", be able to read simple price charts
Phase 2: Contract simulation (only go live after 6 months)
✅ Prerequisites:
▪️ Continuous profit from spot trading for 3 months
▪️ Able to calculate your liquidation price (practice with the exchange calculator)
✅ Safety strategies:
▪️ First-time use of 5x leverage (avoid anything above 10x!)
▪️ Individual investment ≤ 2% of principal (maximum investment of 200U for 10,000U)
▪️ Always set a stop-loss when opening a position (calculate stop-loss level using ATR indicator)
❗ Newcomer's life-saving quotes (memorize these!)
1. Practice on a demo account for 1 month (don't jump straight into real trading and lose money)
2. 99% of those flaunting contract profits never show liquidation records (survivor bias can be deadly)
