In the end, there are two types of trading: spot trading is like simmering soup over a low flame, while contracts are like cooking with hot oil.

When I first entered the space, I was also confused by these two terms. After guiding more than thirty newcomers, I found that not being able to distinguish between the two meant jumping in blindly, like crossing the street with your eyes closed.

First, let's talk about spot trading, which is the most practical approach.

It's like going to the market with cash to buy potatoes; you pay 3000 yuan and can take a bag home. No matter if the market price rises to 5 yuan or falls to 2 yuan, the potatoes are still in your basket. When I bought BTC for the first time in 2019, I spent over 20,000 yuan for 1 BTC. Later, it dropped to 18,000, and I felt pain looking at my account, but the coin was still there. By the next year, it rose to 40,000, and I made back my money.

The advantage of spot trading is that it gives a sense of security; even if the price drops, you won't lose everything overnight. The downside is also clear: during a bear market, you can only watch your account shrink, and there's no way to profit from price differences.

Now, let's talk about contracts; this is all about the adrenaline rush.

It's like using a down payment to leverage a full payment, using 10x leverage to buy 1 BTC, effectively controlling a position worth 10 BTC. The most tempting part is the ability to operate in both directions: going long when the price rises and shorting when it falls. As long as you're on the right side, you can make money whether the price goes up or down. But conversely, if you're on the wrong side, you'll lose faster than anyone else.

I had my first mishap with contracts. In 2020, I went long on ETH with 5x leverage and got liquidated due to sudden bad news. Later, when training students, I repeatedly emphasized that the speed of liquidation in contracts can be faster than a blink of an eye; with 100x leverage, a 1% fluctuation can wipe you out entirely.

So for newcomers, my advice has always been: first, understand spot trading.

Once you can comprehend the temperament of candlestick charts and grasp the fluctuation rhythm of a certain coin, it's best to have a reliable mentor before touching contracts. One of my students started with spot trading and practiced for half a year before engaging with contracts, and now he trades steadily with 3x leverage.

In short, spot trading is a long-distance run that requires endurance; contracts are a sprint that tests explosive power. Choosing between the two, first assess your own temperament: if you can accept slow profits and endure losses, choose spot trading; if you want to get rich quickly and can’t handle a 3% fluctuation, stay away from contracts.

If you're still worried about your account or want to discuss the spot trading strategy of a certain coin, feel free to contact me at @bit多多 . It's better to learn to walk before trying to run and risk breaking your legs. (Personal profile on the homepage)