For newcomers in the cryptocurrency circle, it is strongly recommended to start learning with spot trading and only consider engaging with contracts after fully mastering it.
1. Why is spot trading more suitable for newcomers?
1. Risk level
Spot trading: Loss limit = principal goes to zero (e.g., with 1000 yuan, the maximum loss is 1000 yuan)
Contracts: Possible liquidation and debt (the higher the leverage, the greater the risk; a 10% drop with 10x leverage results in a 100% loss)
2. Learning curve
Spot trading only requires mastery of:
✅ Buy and sell operations
✅ Basic market analysis
✅ Wallet transfers
Contracts require additional mastery:
❗️ Leverage choice
❗️ Margin calculation
❗️ Liquidation price warning
❗️ Funding rate arbitrage
3. Psychological impact
Spot trading volatility is relatively mild, suitable for cultivating market perception
The volatility of contracts can easily lead to emotional trading (a common fatal flaw for newcomers)
2. Hidden thresholds of contracts (easily overlooked by newcomers)
1. Differences in exchange mechanisms
Differences between full position and incremental position
Differences between U-based and coin-based contracts
Difference between marked price and latest price
2. Hidden costs
Funding rate (charged every 8 hours, long-term positions may accumulate high costs)
Slippage issues (small price differences trigger liquidation during high leverage)
3. Strategy complexity
Simple spot strategy: dollar-cost averaging, partial profit taking
Contracts should be paired with: hedging, grid trading, swing trading, etc.
3. Suggested learning path (phased)
Stage 1: Spot basics (1-3 months)
Essential content
Buy BTC/ETH from the exchange
Learn to view the top 50 ranked tokens
Understanding basic indicators such as market capitalization, circulation, and trading volume
Practical goals
Complete more than 10 spot trades
Try to withdraw tokens from the exchange to your wallet
Practical goals
Stage 2: Contract experimentation (after 6 months)
Prerequisites
Spot trading with continuous profit for more than 3 months
Can accurately explain concepts such as 'funding rate' and 'liquidation price'
Safety strategies
Initially use leverage below 5 times
Single trade should not exceed 2% of principal
Must set stop-loss
Establish your own trading discipline (e.g., rules for profit-taking and stop-loss)
Participate in a bull market cycle to observe market sentiment
4. Key recommendations
1. Beware of 'get-rich traps'
Those who flaunt contract profits on social media usually do not display more liquidation records
2. Remember two formulas
Spot loss speed: principal × price decline of cryptocurrency
Contract loss speed: principal × leverage multiplier × price decline of cryptocurrency
5. Common Q&A for newcomers
Q: What to do when you see others making tens of thousands in contracts in a day and feel itchy?
A: Statistics show that 98% of contract newcomers lose money within 6 months; survivor bias makes you see only the winners.
Q: When can I start learning about contracts?
A: When you can answer the following questions:
Why does Bitcoin halving affect the price?
What is the gas fee mechanism of Ethereum?
How to determine if a project's TVL is real?
Summary: The first priority of survival in the crypto world is to stay alive, and spot trading is the best starting point for learning. Once you have enough understanding of the market, contracts will naturally become tools rather than gambling devices. Of course, you can also find the veteran for bull market spot planning and contract secrets sharing.
