Spot trading means buying or selling an asset (currency-project-commodity-stock…) and settling it immediately, or within a very short settlement period (usually T+2 or less for stocks, and actually immediate in crypto platforms). In simpler words: you pay the price now and receive the asset now, with no futures contracts or deferred obligations.
Advantages of spot trading
Simplicity of the concept and execution: you buy the asset directly, you do not need to understand the terms of a contract or calculate time value erosion.
Absence of liquidation risks: because you are not using leverage, the broker cannot automatically 'liquidate' your position.
True asset retention: important for those who want to transfer cryptocurrencies to a cold wallet, or charge their shares to a custody record.
Lower fees compared to perpetual contracts that involve funding rates every 8 hours, for example.
4. Disadvantages of spot trading
Larger capital: without leverage, you must put the full value of the trade.
Lower returns on capital compared to those who successfully use leverage.
Variable liquidity: some currency pairs or small stocks may be less liquid, raising the buy and sell spread.
5. Practical steps to get started (example: cryptocurrency platform)
Choosing a trusted platform ↗ Make sure of the licenses and reputation of the platform.
Complete verification (KYC) if requested.
Deposit base currency (Dollar, Euro, Algerian Dinar, or stablecoin).
Open the spot market interface and choose the pair (e.g., BTC/USDT).
Specify the order type:
Market Order: executed immediately at the best available price.
Limit Order: you specify the price at which you want to buy/sell.
Portfolio management: after execution, you can withdraw to an external wallet or keep it on the platform.
6. Best practices and risk management tips
Use stop-loss orders even in the spot market to protect capital from sharp declines.
Divide positions into batches (DCA) instead of entering and exiting the entire amount at once.
Diversification: do not put your entire portfolio in one asset or sector.
Keep a trading log that shows prices, fees, and profit/loss to objectively assess performance.
Do not ignore taxes and regulations in your country; some countries treat trading profits as taxable income.
7. Resources for deeper learning (Arabic and English)
Binance Academy in Arabic: basic and advanced articles and explanations.
Investopedia – Spot Market: definitions and numerical examples.
$BTC $BTC The book A Beginner’s Guide to the Stock Market (useful for understanding stock settlement).