#TradingStrategyMistakes

The difference between spot trading and futures trading

Spot trading is about buying a specific amount of a certain currency at a specific price at the time you buy it, and you can hold it for a certain period during which its price may rise or fall.

On the other hand, futures trading is a form of betting on the price increase (buying) or decrease (selling). For example, you may set up a trade, such as buying for an amount of $10 and setting a leverage of, for example, 10% - leverage is a tool that allows you to control a large trading position with limited capital.

Example:

- A 10x leverage means that every $1 in your account can control a position worth $10.

You can set the type of account to isolated or cross. The isolated account isolates part of the amount you enter, and in case of loss, you only lose the amount you initially entered. On the other hand, the cross account, unlike the isolated, in case of loss you lose the entire balance in the futures account. This is considered futures trading to be forbidden (haram) by Sharia.