#SpotVSFuturesStrategy
Here are effective spot and futures trading strategies, including key differences, risk levels, and when to use each:
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šµ SPOT TRADING STRATEGIES (Buying/selling the actual asset immediately)
1. Buy and Hold (HODL)
Use for: Long-term belief in the assetās growth.
Example: Buying Bitcoin at $30,000 and holding it for years.
Risk Level: Low to Medium (depends on asset volatility).
2. Swing Trading
Use for: Medium-term market movements (days to weeks).
Example: Buy when RSI is oversold, sell when RSI is overbought.
Risk Level: Medium.
3. Scalping
Use for: Quick small profits from minute-to-minute moves.
Tools: Use technical indicators (MACD, RSI, Bollinger Bands).
Risk Level: High (requires constant attention).
4. Breakout Trading
Use for: Capitalizing on price breaking support/resistance.
Example: Buy once BTC breaks above a key resistance zone.
Risk Level: Medium to High.
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š FUTURES TRADING STRATEGIES (Speculating on price without owning the asset, often with leverage)
1. Hedging
Use for: Protecting spot positions from losses.
Example: Long BTC in spot, short BTC in futures to lock in value.
Risk Level: Low to Medium (reduces downside risk).
2. Leverage Trading
Use for: Amplifying gains (and losses) on small price moves.
Example: 10x leverage on ETH/USDT futures.
Risk Level: Very High.
3. Funding Rate Arbitrage
Use for: Earning from differences in funding payments.
How: Go long in spot, short in futures (or vice versa).
Risk Level: Low to Medium (mostly market-neutral).
4. Contango/Backwardation Arbitrage
Use for: Profit from futures trading above (contango) or below (backwardation) spot price.
How: Buy in spot, short futures when in contango.
Risk Level: Medium.
5. Trend Following
Use for: Riding strong trends using momentum indicators (like MA crossovers).
Tools: EMA, ATR, trendlines.
Risk Level: Medium.
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āļø Comparison Summary
Strategy Type Asset Owned? Leverage Typical Use Risk
Spot Trading Yes No Investing, short-term trades LowāMedium
