The Binance platform offers more than one type of trading, and the two most popular types are:
Spot trading and Futures trading.
In this episode, we will clarify the difference between the two, and when to use each type safely.
First: What is Spot trading?
In this type of trading:
You buy the currency directly and it becomes yours.
It can be kept or sold later.
There is no leverage (you trade with your own capital only).
Example:
You bought 100 USDT of BNB, now you actually own BNB.
Secondly: What is Futures trading?
In this type:
You do not actually buy the currency, but trade on its price (up or down).
You can make a profit whether the price goes up or down (Long or Short).
You use leverage that multiplies your capital (for example ×5, ×10, ×20...).
Example:
You entered a trade with 100 USDT on BTC with ×10 leverage, so you are trading as if you own 1000 USDT.
Simplified comparison table:
When to use Spot and when to use Futures?
Use Spot if:
You were a beginner in the market.
You do not want high risk.
You want to buy and hold the currency.
Use Futures only if:
You have good experience in technical analysis.
Know how to manage your capital.
You can control your emotions during loss or profit.
Important tips when using Futures:
1. Always start with small leverage (only ×2 or ×3).
2. Set the stop-loss accurately.
3. Do not risk more than 1-2% of your capital in the trade.
4. Learn on a demo account before entering with real money.
In summary:
Spot trading is the most suitable option for beginners, as it is safer and simpler to understand.
Futures is a powerful tool for quick profit, but it carries high risk and requires experience and discipline.
In the next episode we will discuss:
The most important technical analysis tools in Binance and how to use them in decision making?
