SPOT TRADING vs FUTURE TRADING
✅ Spot Trading
Pros:
- Immediate ownership: You own the actual crypto asset (e.g., BTC, ETH) in real-time.
- Simplicity: Easier for beginners—buy, hold, or sell.
- No expiry: You're not bound by contract duration.
- No leverage risk: Less chance of liquidation since you aren't borrowing funds.
Cons:
- No shorting: You can’t profit easily in a falling market without complex setups.
- Limited capital efficiency: Returns are based on your invested amount—no margin boost.
- Lower flexibility: Not ideal for hedging strategies or speculation beyond your holdings.
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🚀 Futures Trading
Pros:
- Leverage: Trade with more capital than you own, potentially amplifying profits.
- Shorting ability: Easily profit from a market downturn.
- Advanced strategies: Great for hedging or portfolio management.
- High liquidity: Major futures markets often have deep liquidity.
Cons:
- Risk of liquidation: With leverage, small price drops can wipe your position.
- Complexity: Requires more knowledge—contracts, margin, expiry dates.
- No actual ownership: You're trading contracts, not the actual crypto.
- Potential for loss amplification: Higher returns = higher risks if the market turns.
