📌#SpotVSFuturesStrategy BEFORE TRADING, CHECK THIS

The key difference between spot trading and futures on Binance lies in how cryptocurrencies are traded and the risks involved.

🔹*Spot Trading:*

- Immediate buying and selling of cryptocurrencies

- No expiration dates or contracts

- The trader owns the cryptocurrency and can hold it in their wallet for as long as they wish

- Profits are made when the price rises

🔹*Futures Trading:*

- Buying and selling contracts that speculate on the future price of a cryptocurrency

- May have expiration dates or be perpetual

- The trader does not own the cryptocurrency but is trading with a contract

- Profits can be made both when the price rises (long) and when it falls (short)

- Allows for the use of leverage, which can increase profits but also risks

🔹*Advantages of Futures Trading:*

- Higher liquidity

- Flexibility to make money in both directions of the market

- Possibility to hedge positions in the spot market

- Allows for diversification of investments

🔹*Risks and Considerations:*

- Leverage can significantly increase losses

- Liquidation can occur if the margin balance falls below the maintenance margin

- Requires a good understanding of the market and trading strategies