Cryptocurrency Beginner's Knowledge
For newcomers to the crypto world, it is strongly recommended to start learning with spot trading and only consider contracts after fully mastering it.
1. Why is spot trading more suitable for newcomers?
1. Risk Level
Spot: Loss limit = principal to zero, e.g., with 1000 yuan, the maximum loss is 1000 yuan
Contract: Possible liquidation and owing money, the higher the leverage, the greater the risk; under 10x leverage, a 10% drop results in a 100% loss
2. Learning Curve
For spot trading, you only need to master:
✅ Buying and selling operations
✅ Basic market analysis
✅ Wallet transfers
For contracts, you need to additionally master:
❗️ Leverage selection
❗️ Margin calculation
❗️ Liquidation price alerts
❗️ Funding rate arbitrage
3. Psychological Impact
Spot market fluctuations are relatively mild, suitable for cultivating market perception
The severe fluctuations in contracts can easily lead to emotional trading, a common fatal flaw for newcomers.
2. Hidden Barriers in Contracts That Newcomers Easily Overlook
1. Differences in Exchange Mechanisms
Differences between full position/isolated position models
Differences between U-based and coin-based contracts
Differences between marked price and latest price
2. Hidden Costs
Funding rates are charged every 8 hours; holding long-term positions may accumulate high costs
Slippage issues: with high leverage, even slight price differences can trigger liquidation
3. Strategy Complexity
Simple strategies for spot trading: dollar-cost averaging, staggered profit-taking
Contracts require combinations: hedging, grid trading, swing trading, etc.
3. Key Suggestions
1. Start with a demo account
Both Binance and OKX offer contract simulation trading features; it is recommended to simulate for at least one month before going live.
2. Beware of the 'Get Rich Quick Trap'
People showcasing contract profits on social media usually do not display more liquidation records.
3. Remember Two Formulas
Spot loss speed: principal × price drop
Contract loss speed: principal × leverage × price drop
5. Common Questions from Newcomers
Q: What should I do when I see others making tens of thousands in contracts a day?
A: Statistics show that 98% of contract newcomers lose money within six months; survivor bias only lets you see the winners.
Q: When can I start learning contracts?
A: When you can answer the following questions:
Why does BTC halving affect the price?
What is Ethereum's gas fee mechanism?
How to determine if a project's TVL is real?
Conclusion: The first principle of survival in the crypto world is to stay alive; spot trading is the best starting point for learning. Once you have enough understanding of the market, contracts will naturally become a tool rather than a gambling device.
