Many newcomers to the cryptocurrency world are stumped at the first step:
Should I trade spot or play contracts?
Which is easier to make money? Which is easier to get liquidated?
Today, I will explain it in the simplest terms👇
✅ First, the conclusion:
If you want to survive in the long term: trade spot
If you want to double your money quickly, but might also lose it all overnight: play contracts
🟢 1. What is 'Spot'?
You spend money to buy cryptocurrency, and the coins are yours.
For example, if you buy BTC with 1000 USDT, then you hold Bitcoin,
if it goes up, you earn, if it goes down, you lose, but you won't be 'liquidated', the coins are still in your account.
📌 Suitable for: beginners, small-cap investors, long-term believers in a project.
🔴 2. What is 'Contract'?
You don't need to buy coins, you just bet on whether it will go up or down, with leverage, and you can get liquidated at any time.
Contract trading is essentially a directional bet + leverage amplification,
using 10x leverage to go long on BTC, a 1% increase means you earn 10%,
but a 1% decrease could lead to liquidation.
📌 Suitable for: stable-minded, experienced, short-term traders who understand position management.
⚖️ 3. Key Comparison Table
Project Spot Contract
Asset held Yes (real coin purchase) No (betting direction)
Leverage None Supports high leverage
Profit and loss mechanism Price increase/decrease = profit/loss Direction of trend = profit
Risk of liquidation No liquidation High risk of liquidation
Suitable for Beginners / Long-term Experienced / Short-term
❗️ Common mistakes made by beginners:
Seeing others make quick money with contracts, impulsively entering the market → liquidation
No position management, going all in → successive losses
Emotional control leads to increased positions → losing more and gambling more
🧠 My advice:
If you're new to the space, please start with spot trading, and slowly build your understanding of the market, positions, and candlesticks.
Don't listen to others saying '10x profits', what's earned by others is your loss.
Trading cryptocurrency isn't about speed, it's about understanding + mindset
