Which is more suitable for newcomers in the cryptocurrency world?

For newcomers in the cryptocurrency world, it is strongly recommended to start learning from spot trading, and only consider contracts after fully mastering it.
1. Why is spot trading more suitable for newcomers?
1. Risk Level
Spot: Loss limit = Principal goes to zero (e.g., with 1000 yuan, the maximum loss is 1000 yuan)
Contract: Possible liquidation and debt (the higher the leverage, the greater the risk; a 10x leverage with a 10% drop results in a 100% loss)
2. Learning Curve
Spot only requires mastering:
✅ Buying and selling operations
✅ Basic market analysis
✅ Wallet transfers
Contracts require additional mastery:
❗️ Leverage selection
❗️ Margin calculation
❗️ Liquidation price warning
❗️ Funding rate arbitrage
3. Psychological Impact
Spot trading has relatively mild fluctuations, suitable for developing market perception.
The extreme fluctuations of contracts can easily lead to emotional trading (a common fatal flaw for newcomers).
2. Hidden Thresholds of Contracts (easily overlooked by newcomers)
1. Differences in Exchange Mechanisms
Full Position / Isolated Margin Mode Differences
Differences between U-based and Coin-based Contracts
Difference between Mark Price and Last Price
2. Hidden Costs
Funding Rate (charged every 8 hours, long-term holding may accumulate high costs)
Slippage Issues (small price differences can trigger liquidation at high leverage)
3. Strategy Complexity
Simple Strategies for Spot: Dollar-cost averaging, partial profit-taking
Contracts require combinations: Hedging, grid trading, swing trading, etc.
3. Suggested Learning Path (Phased)
Phase 1: Spot Basics (1-3 months)
Essential Learning
Buy BTC/ETH using exchanges (recommended Binance/OKX)
Learn to view the top 50 tokens on CoinMarketCap
Understand basic indicators such as market cap, circulation, and trading volume
Practical Goals
Complete over 10 spot trades
Try transferring tokens from the exchange to your wallet
Practical Goals
Phase 2: Attempt Contracts (after 6 months)
Prerequisites
Continuous profitable spot trading for over 3 months
Can accurately explain concepts like 'funding rate' and 'liquidation price'
Safety Strategies
Only use leverage below 5x for the first time
Do not risk more than 2% of your principal in a single trade
Must set stop-loss orders
Establish your own trading discipline (e.g., profit-taking and stop-loss rules)
4. Key Recommendations
1. Start with a Demo Account
Both Binance and OKX have contract simulation trading features; it is recommended to simulate for at least 1 month before trading live.
2. Beware of 'Get Rich Quick Traps'
Those who showcase contract profits on social media usually do not display more liquidation records.
3. Remember Two Formulas
Spot Loss Speed: Principal × Price Decline
Contract Loss Speed: Principal × Leverage × Price Decline
5. Common Questions from Newcomers
Q: What should I do if I see others making tens of thousands in contracts in a day?
A: Statistics show that 98% of new contract traders lose money within 6 months; survivor bias only shows you the winners.
Q: When can I start learning about contracts?
A: When you can answer the following questions:
Why does Bitcoin halving affect the price?
What is the Ethereum Gas fee mechanism?
How to determine whether a project's TVL is real?

Conclusion: The first principle of survival in the cryptocurrency world is to stay alive; spot trading is the best starting point for learning. When you have enough market knowledge, contracts will naturally become a tool rather than a gamble.