đš What is Spot Trading?
Spot trading is the purchase or sale of a financial instrument (like crypto, stocks, or commodities) for immediate delivery.
You buy or sell the asset right now, at the current market price (spot price).
Example: You buy 1 Bitcoin at $65,000, and itâs added to your wallet instantly.
Key traits:
Real ownership of the asset.
No leverage or margin by default.
Less risky compared to futures.
Common for long-term investors (HODLers).
đ¸ What is Futures Trading?
Futures trading involves contracts to buy or sell an asset at a later date, at a pre-agreed price.
You donât own the asset â you're speculating on its price.
You can use leverage to increase your position size.
Example: Open a long Bitcoin futures contract at $65,000, expecting price to rise.
Key traits:
No actual asset delivered.
Higher profit potential due to leverage.
Also higher risk (liquidation possible).
Suitable for short-term traders or hedgers.
â Basic Strategies Comparison
Strategy Type Spot Trading Futures Trading Goal Long term investment Short term profit or hedge Risk Lower Higher (due to leverage)
Leverage No/Yes (up to 100x on some exchanges)Best For HODLing, accumulating Day trading, swing trading Example Strategy Buy low, sell high over months/years Long if price rising, short if falling (use stop-loss)
đ Combined Strategy (Advanced)
You can also combine spot and futures:
Hedge spot holdings by shorting futures (to protect profits).
Use futures for income while holding spot (like funding rates in crypto).
â ď¸ Tips for Beginners
Start with spot trading to understand the market.
Only move to futures when youâve learned risk management.
Use stop-loss orders and position sizing wisely.
Avoid high leverage unless you're experienced.
Would you like real-world examples or a beginner-friendly trading plan?
