When it comes to contracts and spot trading, many people always feel that spot is stable and contracts are risky. But to be honest, those who truly understand the market know that contracts have many more advantages than spot trading, especially for those who want to operate flexibly in the cryptocurrency space; they are practically tailor-made tools.
Let's first talk about the most practical aspect—making money in both directions. In spot trading, you can only earn when the price of the coin rises; when it falls, you either hold on or cut your losses, and all you can do is watch your account shrink. But contracts are different; you can long when the price rises and short when it falls. Regardless of whether the market goes up or down, as long as you judge the direction correctly, you can make a profit. For example, when Bitcoin fell from 40,000 to 30,000 recently, spot traders were crying, while those who shorted with contracts were already smiling with profits in their pockets.
Then there's the allure of leverage. In spot trading, you have to spend exactly how much you want to buy, for instance, buying 10 Bitcoins now costs hundreds of thousands, which ordinary people don't have lying around. Contracts are much more flexible; by adding leverage, you can control large positions with a small amount of capital. For example, with 10x leverage, money that could only buy 1 coin can now be used to trade 10 coins. If the direction is right, your profits can multiply tenfold. Of course, leverage is a double-edged sword, but as long as you control your position well, it’s a great way to quickly amplify returns, much more efficient than slowly waiting for spot prices to rise.
Another point is that contracts are not afraid of missing out. What do spot traders fear the most? Missing out on big market movements. For example, if you think a certain coin will rise but don’t have cash at hand, by the time you gather the funds, the price may have already skyrocketed, leaving you regretting. Contracts don’t have this issue; as long as you correctly judge the trend, even if your capital is limited, you can immediately leverage and enter the market. When the opportunity arises, you won’t just watch it slip away.
Moreover, stop-loss and take-profit are particularly convenient. When trading spot, setting up an automatic stop-loss can be quite troublesome; sometimes when the market drops suddenly, by the time you manually operate, you've already suffered substantial losses. The built-in stop-loss and take-profit functions of contracts allow you to set them up directly when you open a position, and when the price reaches the level, it automatically closes the position. Whether you're sleeping or busy with other things, it helps you protect profits and control losses. This aspect is especially friendly for beginners; you don't have to stare at the screen every day, and you can still keep risks in your own hands.
Some may argue that contracts carry high risks, but to be honest, the risk mainly depends on how you play. If you blindly buy and sell in spot trading, and heavily invest at peak prices, you can still suffer painful losses. The risks of contracts are actually controllable; as long as you don't get greedy, don't use too much leverage, and strictly implement stop-losses, they can be more flexible in responding to the market's ups and downs compared to spot trading.
Ultimately, spot trading is like holding onto coins and waiting for appreciation, while contracts are more like clever strategies that can adapt to market conditions. If you want to earn more quickly in the cryptocurrency space and can accept moderate risks, contracts are indeed worth exploring more than spot trading. Of course, no matter what you trade, you must first understand the rules and not rush in impulsively; that is the most important thing.
