lately i post my trading position, nomatter what it goes, lose or win, i post it with vey high leverage.
Intro
Spot trading is like you buy a goods, we own it, use it, destroy, everything we want we can do it. this is very low risk in trading, cause you never lose the goods itself, but we only losing the value of the goods. for example we buy 1 Bitcoin at 110k, hold it for 6 months, it still 1 bitcoin, and we can move the bitcoin into our own wallet even after hokd it in exchange like binance, but the value may fall to 98k or even flying high to 150k.
Futures Trading is different. we never own the goods, we only put the "value" into the contract. basically, we buy the value of contract. for example, we buy 1 Ethereum at 2550$, hold it for 6 months, we may losing 2550$ or baging over 3000$. now, we can see the different, after 6 months, we cant move our futures contract but we can move our spot coin.
Risk Management
When we do buy/sell, we must understand what is risk management, especially on futures trading.
š¢ basic things you need to understand is, futures can make you rich in a night or make you poor forever. if you not ready for this, better you stop here.
š¢ next step is understanding the leverage. in simple word, leverage is multiplying your money with market money. for example, you open position 1 contract on SOLUSDT prepetual contract with 100x leverage, its mean you buy 1 sol, but you only pay 0.01 of the price. who pay the rest? the market. thats why it has liquidation price when you use leverage trading to pay back the market.
š¢ next step is managing the leverage. most people didnt realky understand how the leverage work. as mentioned above, you must manage how much i buy with my current balance? for example, you have $100 and want to open position on Solana prepetual. for lowering the liquidation price, pick lower leverage such as 20x. now, in total you have $2000 to buy sol. let say current price is 100$ per sol, you can buy up to 20 sol with you initial balance $100. when will be liquidate? at this situation, you'll liquidated if sol price under 25$ for short and over $175 for long position.
Conclusion
after simple description above, you must understand the basics of futures and spot. if you like hodling coin, spot is best choice. but, if you like adrenaline and high risk, futures is suited with your style like me, hhhh. remember, dont follow my trading style with max leverage with small balance, you'll liquidated in short time.
