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Key Differences
• Spot Trading: Buy/sell actual crypto at current market price simple and straightforward.
• Margin Trading: Trade with borrowed funds to amplify positions higher potential gains, but also higher risk and liquidation possibilities.
• Futures Trading: Enter contracts to buy/sell at a predetermined price on a future date ideal for hedging or speculating without holding the underlying asset; often heavily leveraged.
When & Why to Use Each
• Spot: Best for beginners or long-term holds; minimal complexity and no liquidation risk.
• Margin: Use when you’re comfortable with leverage and want to boost short-term returns; requires solid risk management.
• Futures: Great for hedging existing positions or speculating on price moves without owning coins; suits experienced traders.
> I personally stick to Spot for most trades keeps things simple and lowers stress on risk management.
Tips for Beginners
1. Start Small: Never risk more than you can afford to lose, especially with leverage.
2. Learn Order Types: Market vs. limit orders can make a big difference in execution and fees.
3. Use Stop-Losses: Protect your capital by automating exits when things go south.
4. Manage Leverage: If you try Margin/Futures, use low leverage (e.g., 2× or 3×) until you’ve practiced enough.
5. Educate Continuously: Crypto markets move fast read, watch tutorials, and analyze charts before diving in.