Everything you need to know about #SpotVSFuturesStrategy

Spot Trading:

What It Is: The direct purchase and sale of cryptocurrencies at the current market price, resulting in immediate ownership of the actual digital asset.

Risk Profile: Considered lower-risk because it does not use leverage. Your position cannot be forcibly closed (liquidated), and the maximum loss is limited to the capital you invested.

Best For: Beginners and long-term investors who prefer simpler strategies like "buy and hold" (HODL) and value direct asset ownership.

Futures Trading:

What It Is: Speculating on a cryptocurrency's future price by trading contracts, without ever owning the underlying asset.

Key Feature: Uses leverage to control large positions with a small amount of capital, which magnifies both potential profits and losses.

Risk Profile: High-risk due to the danger of liquidation, where an exchange forcibly closes a losing position, causing a total loss of the trader's initial investment.

Best For: Experienced traders using advanced strategies like short-selling (profiting from price drops) and hedging. Requires strict risk management, such as setting stop-loss orders.