There are two trading modes for cryptocurrency: one is spot trading, and the other is contract trading. Spot trading is just like buying things normally; you give them money, and they give you the goods. For example, if you spend 3000 yuan to buy a coin, you own that coin, and you can exchange it for whatever its current value is.

The advantage of spot trading is that the coin you bought belongs to you, regardless of whether its price rises or falls; your coin is always there. If the price goes up, the coin is worth more, and if it falls, the coin is worth less. It's quite simple to understand. The downside is that you can only make a profit if the price of that coin goes up; your earnings come from the price difference when it rises.

On the other hand, contract trading involves using a small amount of capital to trade with leverage that is multiple times, even hundreds of times, the original price. Both profits and losses will increase simultaneously by that multiple. For instance, if you buy one BTC with 10x leverage, it's equivalent to buying 10 BTC for trading.

Contract trading also has the advantage of being able to trade in both directions, allowing you to bet on price increases or decreases, commonly referred to as long and short positions. As long as you choose the correct direction, you can profit regardless of whether the price goes up or down. However, the risk is proportional to the profit; under sufficient leverage, you could multiply your investment several times, or you could end up back where you started. This is the essence of profit and loss being intertwined.

Therefore, it is advised for beginners to start with spot trading. Once you become familiar and have explored the nuances, ideally with guidance from an expert, then consider trying contract trading. A mature trader must rationally analyze the advantages and risks of various trading methods and cautiously choose the one that suits their comprehensive abilities.
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