Newcomers to the Cryptocurrency World Must Read: Start with Spot Trading, Then Move to Futures!

Are you a newbie just entering the cryptocurrency world, feeling dazzled by various trading methods? Today, I have a super practical suggestion for you: first learn spot trading, and once you have fully mastered it, consider moving to futures.

Why is spot trading more suitable for newcomers?

From a risk perspective, in spot trading, the maximum loss is just your initial capital; however, futures are different. If you use leverage, not only could you get liquidated, but you might also end up owing money. For example, with 10x leverage, a 10% drop could wipe out your entire capital.

In terms of learning difficulty, the skills required for spot trading are relatively simple, involving buying and selling operations, basic market analysis, and wallet transfers. Futures, on the other hand, are much more complex, requiring knowledge of leverage choices, margin calculations, liquidation price alerts, funding rate arbitrage, and many other factors.

The psychological aspect also cannot be ignored. Spot trading has relatively moderate fluctuations, allowing newcomers to gradually develop their market perception. Futures trading can be highly volatile, which can easily lead to emotional trading, a fatal flaw for beginners.

There are also many hidden thresholds in futures trading. Different exchanges have different mechanisms, such as full margin and isolated margin modes, U-based and coin-based contracts, etc. There are also implicit costs, such as funding rates charged every 8 hours, which can make long-term holding very expensive, and slippage can be deadly at high leverage. The strategies are also much more complicated than in spot trading.

So, how should newcomers learn? Spend the first 1-3 months learning the basics of spot trading by buying and selling BTC/ETH on Binance or OKX, learn to look at token rankings, understand basic indicators, complete over 10 trades, and even transfer tokens to your wallet.

After 6 months, if you have made continuous profits from spot trading for more than 3 months and can accurately explain concepts related to futures, then consider trying futures, but only use leverage below 5x for your first trades, and limit each trade to no more than 2% of your capital. You must set stop-losses and establish trading discipline.

Newcomers must first practice futures on a demo account, stay alert to the "get rich quick traps" on social media, remember the loss formula, and avoid blindly following trends. When you have enough understanding of the market, futures can become a tool rather than a gambling device. In the cryptocurrency world, survival comes first; starting with spot trading is the way to go!

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