Which is more suitable for newcomers in the cryptocurrency space?
#Investment has risks, proceed with caution #Contract trading #Spot #Cryptocurrency knowledge
For newcomers in the cryptocurrency space, it is strongly recommended to start learning with spot trading, and only consider engaging in 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., at 1000 yuan, the maximum loss is 1000 yuan)
Contract: Possible liquidation and owing money (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 alerts
❗️ Funding rate arbitrage
3. Psychological Impact
Spot fluctuations are relatively mild, suitable for cultivating market perception
Contract's severe fluctuations can lead to emotional trading (a common fatal flaw for newcomers)
2. Hidden Thresholds in Contracts (easily overlooked by newcomers)
1. Differences in Exchange Mechanisms
Full margin vs. isolated margin model
Differences between USDT and cryptocurrency contracts
Differences between marked price and latest price
2. Hidden Costs
Funding rate (charged every 8 hours, long-term holding can accumulate high costs)
Slippage issues (small price differences trigger liquidation at high leverage)
3. Strategy Complexity
Simple spot strategies: Dollar-cost averaging, staggered profit-taking
Contracts require additional strategies: Hedging, grid trading, swing trading, etc.
3. Suggested Learning Path (Phased)
Phase 1: Spot Basics (1-3 months)
Essential learning content
Buy BTC/ETH using an exchange (recommended Binance/OKX)
Learn to check the top 50 tokens on CoinMarketCap
Understand basic indicators like market cap, circulation, and trading volume
Practical goals
Complete more than 10 spot trades
Try to withdraw tokens from the exchange to your wallet
Phase 2: Contract Experimentation (after 6 months)
Prerequisites
Consistent profitability in spot trading for more than 3 months
Ability to accurately explain concepts like 'funding rate' and 'liquidation price'
Safety strategies
Initially use leverage below 5x
Single trade should not exceed 2% of the principal
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
Summary: The first principle of survival in the cryptocurrency space is to stay alive, and 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