The life of a cryptocurrency contract trader is like this: I only sleep 2 hours a day, with the alarm ringing every 15 minutes, my eyes glued to the K-line, and my heart hanging by a thread with the fluctuations. When a spike occurs, I am even more frightened, fearing I might get liquidated in the next second. The 3000 yuan in my pocket is the last capital saved from delivering food. No girlfriend, no time to spend with family, and even sex life has become a luxury. I can't muster interest in anything, only the bloodshot eyes while smoking and chewing betel nut.
One deep night, the account was liquidated. The next day, I could only put on the delivery uniform and ride the electric bike again. Long-term poor eating habits led to malnutrition knocking on my door. In the cold wind and under the blazing sun, I could only endure. Delivering the wrong order with dark circles under my eyes, I received a bad review, lost 50 yuan, and had to deliver 10 more orders to make up for it. But just then, the cryptocurrency bull market arrived, and I had no money left to enter the market.
In the cryptocurrency world, some people's assets can multiply 50 or 100 times overnight, while others can instantly drop to zero, leaving nothing behind. Playing contracts is like a heartbeat; it's even more thrilling than a roller coaster. Have you ever experienced consecutive losses and frequent liquidations? Have you felt frustrated and regretful, rushing to recover your losses but sinking deeper? Do you always fantasize about success, only to be slapped by reality time and again?
For beginners, avoiding contracts and starting with spot trading is a more prudent choice, and there are many reasons behind this.
Contract trading poses multiple hidden risks for beginners.
High leverage is a 'double-edged sword' that beginners find hard to handle. Contracts often allow leverage, enabling large trades with a small amount of capital. For example, with 10x leverage, a 10% price fluctuation could result in a total loss of principal. Beginners cannot withstand market fluctuations, have no concept of leverage risk, and can easily amplify losses due to short-term fluctuations.
The risk of forced liquidation coupled with 'spike' risks is even more dangerous. 'Spikes' cause prices to fluctuate violently in a short time, easily triggering forced liquidation. Novices may lack foresight and coping experience and may miss the opportunity to recover after a price correction, leading to irreversible losses.
The rules are more complex than beginners can comprehend. In addition to leverage and forced liquidation, there are professional topics like margin calculations, expiration delivery, and perpetual contract fees. Entering the market without fully understanding the rules may lead to losses due to operational errors, and such 'non-market factors' losses are too unfortunate for beginners.
Spot trading is an ideal choice for beginners.
The risk boundaries are clear, suitable for establishing risk awareness. In spot trading, you are buying the cryptocurrency itself, and the maximum loss is just the principal invested. There won't be excessive losses or liquidation caused by leverage, allowing beginners to gradually accumulate experience without the fear of 'overnight liquidation.'
The operation is simple, making it easier to learn market rules. The logic is straightforward: buy low and sell high to earn the difference, without considering complex parameters like leverage and margin. Beginners can focus on studying market supply and demand, news, technical indicators, etc., to understand the underlying logic of price fluctuations and lay the foundation for the future.
It helps cultivate a rational trading mindset. High volatility in contracts can easily lead to emotional trading; novices may increase their positions due to impulsive profits or panic sell due to losses. However, spot trading has a smoother rhythm, causing less psychological impact, making it easier to cultivate a 'long-termism' mindset and avoid chasing highs and cutting losses.
For newcomers in the cryptocurrency world, the core of investment is to accumulate experience and build awareness. Spot trading provides a low-risk practice environment, allowing you to learn the rules and hone your mindset in the market; while the high complexity and high risk of contracts may lead to severe losses right from the start, causing you to lose confidence in the market. Therefore, starting with spot trading is more stable and sustainable.
If you now feel helpless and confused in trading, and want to understand more market trends, following Xiaowan will help you see clearly and operate confidently. Stable profits are much more realistic than fantasizing about getting rich overnight.