Let me describe the life of a contract trader in the cryptocurrency sector:
But if you are trading contracts, you basically sleep 2 hours a day, and the alarm goes off every 15 minutes.
Watching the K-line fluctuations, feeling anxious, looking at the spikes, feeling terrified. Afraid of being liquidated.
With only 3000 yuan in savings, that is the last capital for delivering food on an electric scooter.
No girlfriend, no time to spend with family, no sex life, and no interest in anything else.
Maybe just smoking and chewing betel nut, with bloodshot eyes.
One night you were liquidated, and then the next day you put on a kangaroo costume to deliver food.
But it's exhausting, and not eating well for a long time has led to malnutrition.
But in the cold wind, under the scorching sun, you can only endure.
You risked dark circles under your eyes, made a wrong delivery, and received a negative review from the customer.
You were deducted 50 yuan, and you need to deliver 10 more orders to earn it back.
You have no way out, but at this moment, the bull market in the cryptocurrency sector has returned.
You no longer have the capital to enter the market, your credit card is overdue, and you haven't paid back your friend's money.
Your parents' money has been squandered by you, and you can't feel a trace of warmth in this cold city.
People in the cryptocurrency sector may increase their value by 50 or 100 times overnight, or they can instantly lose everything.
Playing contracts in the cryptocurrency sector is like playing with your heartbeat, thrilling and more exciting than riding a roller coaster.
Have you ever experienced consecutive losses and frequent liquidations?
Then you feel frustrated and regret your decision?
Are you eager to recover your losses, but instead you find yourself sinking deeper?
You keep fantasizing about the scenes after success, but reality keeps slapping you in the face.
For beginners, avoiding contract trading and starting with spot trading is a more prudent choice, which is backed by multiple reasonable logics.
Contract trading hides multiple risks for beginners.
The high leverage characteristic of contract trading is a 'double-edged sword' that is hard for beginners to handle. Contract trading usually allows investors to use leverage, meaning they can control larger trading volumes with a small amount of capital. For example, 10x leverage means a 10% price fluctuation could lead to a total loss of the investor's capital. Beginners have a weaker capacity to withstand market fluctuations and lack an intuitive understanding of leverage risk, making them more susceptible to amplified losses due to short-term price fluctuations.
The forced liquidation mechanism combined with the risk of 'spiking' further exacerbates the dangers of contract trading. As mentioned earlier, 'spiking' can cause prices to fluctuate sharply in a short period, and in contract trading, this kind of fluctuation can easily trigger forced liquidation. Beginners often underestimate sudden market situations and lack experience in dealing with 'spikes,' which may cause them to miss recovery opportunities after a rapid price rebound due to being liquidated.
Moreover, the complexity of contract trading rules far exceeds beginners' understanding. In addition to leverage and forced liquidation, it also involves professional content such as margin calculations, expiration deliveries, and perpetual contract fees. If beginners rush into the market without fully understanding the rules, they may incur losses due to operational errors (such as insufficient margin or choosing the wrong delivery time), and these losses caused by 'non-market factors' are particularly regrettable for beginners.
Spot trading is the ideal choice for beginners.
The risk boundaries of spot trading are clear, making it more suitable for beginners to establish risk awareness. In spot trading, investors are buying the cryptocurrency itself, and the maximum loss is just the invested capital, without the risk of excessive losses or being 'liquidated' due to leverage. This 'controllable loss' characteristic allows beginners to gradually accumulate experience in the market without always worrying about extreme situations like 'overnight liquidation.'
Spot trading is simple to operate, which helps beginners focus on learning market rules. The logic of spot trading is straightforward: buy low, sell high to earn the price difference, without needing to consider complex parameters like leverage ratios and margin maintenance. Beginners can focus their energy on studying market supply and demand, news impact, technical indicators, and other core content, gradually understanding the underlying logic of price fluctuations, laying the foundation for more complex trading later on.
From the perspective of developing a trading mindset, spot trading is better at helping beginners establish rational habits. The high volatility of contracts can easily lead to emotional trading; beginners often impulsively increase their positions due to short-term profits or panic sell due to losses. In contrast, spot trading has a relatively smooth pace, and the psychological impact of price fluctuations is smaller, making it easier for beginners to cultivate a 'long-termism' mindset and avoid falling into the vicious cycle of buying high and selling low.
For beginners in the cryptocurrency sector, the core of investment is to accumulate experience and build knowledge. Spot trading provides a low-risk practice space where beginners can learn the rules and hone their mindset in the real market; whereas the high complexity and high risk of contract trading can lead to significant losses for beginners at the entry level, causing them to lose confidence in the market. Therefore, starting with spot trading is a more stable and sustainable choice.
