For newcomers in the cryptocurrency space, it is strongly recommended to start learning with spot trading and only consider engaging with contracts once fully mastered.
1. Why is spot trading more suitable for newcomers?
1. Risk Level
Spot: Loss limit = Principal going to zero (e.g., with 1000 yuan, the maximum loss is 1000 yuan)
Contract: Potential liquidation leading to negative balance (the higher the leverage, the greater the risk; with 10x leverage, 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 alerts
❗️ Funding rate arbitrage
3. Psychological Impact
Spot volatility is relatively mild, suitable for cultivating market perception
Severe volatility in contracts can easily lead to emotional trading (a common fatal flaw for newcomers)
2. Hidden Thresholds of Contracts (often overlooked by newcomers)
1. Differences in Exchange Mechanisms
Full position vs. isolated position models
Differences between USDT-denominated and coin-denominated contracts
Differences between marked price and latest price
2. Hidden Costs
Funding rates (charged every 8 hours, long-term positions may accumulate high costs)
Slippage issues (small price differences can trigger liquidation under high leverage)
3. Suggested Learning Path (staged)
Essential Learning Content
Buy BTC/ETH using an exchange (recommended Binance/OKX)
Learn to check the top 50 tokens on CoinMarketCap
Understand basic indicators such as market cap, circulation, and trading volume
Safety Strategies
Initially use leverage below 5x
Do not exceed 10% of the principal in a single trade
Must set stop-loss
Establish your own trading discipline (e.g., profit-taking and stop-loss rules)
Participate in one bull market cycle to observe market sentiment
4. Key Recommendations
1. Start with a simulated account
Both Binance and OKX have contract simulation trading features; it is recommended to simulate for at least 1 month before going live
2. Beware of the "get rich quick trap"
Those who flaunt contract profits on social media usually do not show more liquidation records
5. Common Questions from Newcomers
Q: What should I do if I feel the urge to trade contracts after seeing others making tens of thousands in a day?
A: Statistics show that 98% of new contract traders lose money within 6 months; survivor bias makes you only see the winners.
Summary: The first principle of survival in the cryptocurrency space is to stay alive; spot trading is the best starting point for learning. Once you have sufficient understanding of the market, contracts will naturally become a tool rather than a gamble.