#SpotVSFuturesStrategy Both spot and futures trading are popular in crypto and traditional markets, but they have distinct characteristics that influence trading strategies.

Spot Trading**

Definition:** Buying/selling assets (e.g., BTC, ETH) for immediate delivery at the current market price.

Pros:

✅ Simple & straightforward (buy low, sell high)

✅ No expiry or leverage (lower risk)

✅ Ownership of the asset (can withdraw to wallet)

Cons:

❌ Limited profit potential (only profits if price rises)

❌ No shorting (unless margin trading is available)

Spot Trading Strategies:

1.Buy & Hold (HODL) – Long-term investment in strong assets.

2. Dollar-Cost Averaging (DCA)** – Regular buys to reduce volatility impact.

3. Swing Trading– Capitalizing on short-to-medium-term trends.

4. Arbitrage– Exploiting price differences across exchanges.

2. Futures Trading

Definition: Trading contracts to buy/sell an asset at a predetermined future price (with leverage).

Pros:

✅ Leverage (amplifies gains, e.g., 10x-100x)

✅ Short Selling (profit from price drops)

✅ Hedging** (protect spot positions from downside)

Cons:

❌ High risk (liquidation possible if market moves against you)

❌ Funding fees (for perpetual contracts)

❌ Complexity (requires risk management)

Futures Trading Strategies:**

1. Trend Following** – Entering long/short positions based on momentum.

2. Mean Reversion** – Betting price will return to its average.

3. Hedging** – Using futures to offset spot market risks.

4. Scalping** – Small, quick trades for minor profits.

5. Arbitrage** – Exploiting price differences between spot & futures.