Topic: Futures trading and spots trading explained briefly (Read 263 times)

Woohw  ... I really don't think so. Futures trading is opportunity trading, and although it gives traders the chance to earn so much faster than sports trading in some cases, but it's also the fastest way to lose money in the blink of an eye. In sports trading, one can lose their capital slowly, but that's if the trader is not smart enough or well experienced in buying the right token at the right time and selling off if they gain a little profit, and wait to buy back when the price drops again. In future trading, experience can only help limit the risk of losing everything when volatility switches hands. In futures trading, one has to predict the price direction of the coin you are trading, and if you predict that the price will go up and decided to enter the trade, and at a point the price of the coin you are trading swings the opposite direction, it can quickly liquidate the trader's asset within just a few minutes. In fact, it's even more risky that when you have a small capital, it can easily get liquidated so quickly.

If not traded correctly, both spot and futures yield profits and losses. It is our responsibility to adjust to the trading sector that received our lucky entry, because not all traders will proceed in one way; we are all familiar with gains, but not all are willing to take on the risks associated. Spot trading is simpler to begin with because it is more affordable than future trading, which is regarded the oil well for trading bitcoin. Although it is complex due to the numerous characteristics it possesses, it is one of the most reliable ways to produce massive gains from transactions.

In other words, Futures trading is a leveraged trading. Where you can earn a lot even if you only invest a small amount of money. Unlike Spot trading, if the percentage increase in the price of an asset, that's what you will earn for your trade based on your capital.
Aside from that, there is what we called Perpetual futures and Quarterly futures, Quarterly has an expiration where your trade will automatically close if it exceeds the said date. And Perpetual in a simple way, has no expiration.
By the way, Futures trading is riskier than Spot.

You can do these also on the futures market, like scalping, day trading, or swinging.  These are all possible on the futures market. I think if you only use 1x leverage long, then it's better just to do spot trading. But if you want to short the market, then go for the futures market.

From what I understand spot and futures trading - which are the two major trading types in crypto  - to mean in a lame man's understanding..

Futures trading is like predicting future outcome of a coin's price in a progressive manner, that is, in real time..
You put In your money to predict that the price of coin is going up or down in the future, (and remember, 1 minute, 2, 5, 10 minutes, 1 Hour ahead, is a future and some do not know which direction the market will be headed by those times) if your prediction is correct, you start making profit for as long as you prediction(position) is open and market keep going the direction your predicted - this is why Futures trading is exactly gambling, if the trader do not know what he or she is doing.

Spot trading on the other hand is when you really do not know whether the price will go up or down, you lack the technical and fundamental knowledge to be able to predict correctly, you simply buy the coin at its spot price(immediate price at that moment), and hold, if the price goes up, you can decide for yourself to sell and take your profit, but if the price goes down, you also can decide to sell and take your loss or keep holding until the price goes back up and you are in profit.

Trading spot is like a mini aspect of investing in a coin for short term profit, and though it is usually less risky, the profit generated from spot trading is usually small, when compared to winning trades on futures market, where the risk is higher, but profit is higher too.

How easy can we consider futures trading? Because there is more risk in futures trading as compared to spot trading.  Even if you lose your money in spot trading, there is no chance of it disappearing completely, but in futures trading, just a little mistake can make your money disappear. After taking a trade certain amount limit is set for you, below that limit you will lose all your money if the price of your purchased coin goes below that limit. Since there is so much risk involved in this training, future trading has to be done very carefully. If you make a mistake in spot trading, there is a chance of getting your money back, but if you make a mistake in futures trading, there is no chance of getting your money back.

Both are opportunities but spot is more regular than in futures, that is because it is easier and less risky. There are people who can jump in the harder ones but these people are just crazy. They will only fail. The majority will always start on easy as this makes the harder ones more understandable.

Simple explanations are understandable for an average person but if they want to learn more, that is going to be the time to be more technical. Showing the interface might be in the intermediate level already. Then the ones with technical analysis included must be for advanced users. There are courses available online, there's also youtube and last but not the least is this forum if someone is now ready to get started.

People with no knowledge can assume anything and think of any outcome that might not be the actual reality. Some newbies when they haven't yet joined cryptocurrency trading or have no knowledge about it at all think they can get rich easily even with spot trading which might happen with only the luckiest people who invest in new tokens and grow a thousand folds like some meme coins.

Futures trading is all about risk if you are not experienced, it is just like Options trading where you predict an outcome and get money based on that and lose if your prediction is wrong, the only difference is that options are for short-term and future can be for a bit long term.

It will have been better you explained everything more so that everyone will be able to understand, your explanation is too brief, you should have elaborated it well so that everyone reading will easily understand it. You should have added the advantages and the disadvantages of both future and spot trading, the risk associated with both the trade, because I know future trading is highly risky compare to spot trading, that’s why mostly newbies are always encouraged to stay away from future trading, it’s better they stick to spot trading with low risk.

The way futures trading works is like that, you will benefit based on what position you choose, and every change in trend will only bring you closer to liquid. However, many novice traders may be too greedy about setting margins. They may forget that the margin will really determine how long you can survive during the changing market trends that are not in accordance with the position they choose, so liquidation is only getting more likely.

Hmmm, futures trading might be good for those who are good at managing their emotions and not too greedy.
Understanding strategy is mandatory instead of being too eager to get rich overnight. I tend to recommend spot trading or investing for any beginner, but they can learn about several other types of trading.

One difference thing about spot and future trading is huge profitable and with future you can earn profit without waiting Bitcoin or altcoin price up, exactly when trading with spot we need waiting moment when price up but future trading ability earn profit when market dump by short opening position. I have tried with spot and future trading, each kinds of trading have featured and weakness each other, I left with future trading because can't controlling the emotion exactly when position close with liquid and its not kinds of trading based on my passion.

I can't hold for longer time with spot trading after price going drop but don't have choose with future trading and seems not really recommended for beginner try with future trading.

But when you are just that a complete noob or just simply new into this field then i would be always recommending on making yourself that good first at spot trading before you would be considering out on moving

or trying or testing out on futures because we know that this isnt something that a noob or new people/trader could be able to bare up such risks specially on making use of high leverage which it could really be possibly be able to blown up your account balance or being liquidated on shortest time as possible, not like when you do deal up with spot on which in case you've been seeing your portfolio is already that going down or negative. You could still be able to hold up your position and would consider those losses to be paper losses. It wont be counted as a sure or realized loss until you would be closing it.

You should know the differentiation in between things because you cant really be able to tell it on the time that you wont really be experiencing for yourself. You would be able to determine and find out
about their risks levels on the time you would be testing it but of course you shouldnt really be sticking into something which is risky.

From your writing, If at all you did not mistakenly use the spot trading definition for future, then you totally got it all wrong.
Spot trading is a trading that involves you owning the particular coin you have purchased either base on instant order or by a limit order. Where for instance your 1 BTC = 1 BTC so far you did not sell your asset even when the value in dollar has decreased, whereas future trading is a trade that is meant to trade and run for a long period of time , and in this type of trading, your entire funds can get liquidated should the trade goes against your direction.

For someone who is not so patient and do not know how to wait for a time, spots trading should be what you should focus your energy on instead wanting to learn the patience involved with Futures. Futures require patience and it will be more suited for people who already have no problems with waiting. Bother trading can be profitable depending on strategy which you have to keep as simple as possible always, With a simple but working strategy, you will be able to make adjustments to your strategy when it begins to become unreliable.

Spot trading is regular trading, futures trading is opportunity trading, it's that simple.
People's preferences can be different, you also have to take a different way. In general, I don't think that people will properly understand the types of trading with simple explanations without showing the trading interface directly.

Whether it was spot or futures trading, a trader must know them and choose where they think it works for them.
I would say I preferred spot trading because I was been familiar with it and my profit is really good enough. And besides, the difference between them is the possible huge earning profit in Futures trading but also it will incur possible big losses as well.

If you wanted to have a safe trade (at least) spot trading is the best choice. Because it was not about the additional features that Futures has, it was all about where we can easily analyze the market.

To get in short in spot trading you are putting your assets with holding once you bought the price of the Bitcoin at that time that's the amount of the bitcoin you have any price movement of spot trading that's how does it's market volatile. In futures trading there's a leverage or margin still you have an option if you will put it or take zero but in that case better you go for spot. Back to the leverage and margin when you use it you are borrowing amount of money to the platform after you make trade they mandatory get those you.borrowed that's why making a Cross or isolated when you choose cross to prevent lower support or liquidation margin it's ideal but it cause all your balance in wallet.

Guaranteed income, in principle, does not exist in the cryptocurrency market. If you see in the cryptocurrency market that a guaranteed income is offered somewhere, then obviously you have a ponzi scheme in front of you. As for futures trading, the risk of losing your money here is much higher than with spot trading.

About bad experiences, I also experienced it and have never touched futures trading again.
Not only strategy, but psychology is also very much played in futures trading. it will drain emotions when experiencing liquidity.
Really not recommended for those who are too panicked and do not understand futures trading completely.


Yes, every tool will have good and bad both spot and futures trading, but it is riskier to trade futures because it is not recommended for beginners or for those who do not understand technical analysis or strategies for futures trading. But about the coin selection on spot trading, shitcoin is really not recommended, Bitcoin is still the best choice.

Futures trading, think of it like organizing a bash for next month. Agree on the details now, but party time's in the future. Spots trading? Picture buying a burger and chowing down immediately. Right here, right now. Futures trading: no annoying overnight charges. Attractive for those playing the long game. Spots trading: fast-paced, ideal for short-term trades. As for stuff, futures trading offers a smorgasbord: bonds, metals, even digital coins! Spots trading: focuses on quick transactions, like cash or cryptos. The choice? Up to you, your tactics, your appetite for risk. Both can bring home the bacon! Jump into trading with enthusiasm, and may your ventures be prosperous!