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!

If you see a trader that is not using stop loss, you should know it is a bigger risk already taken because the account is waiting to be blown off at a larger volatility wave depending on the account size. Whether spots trading or futures, using stop loss is advanced.  Most losses recorded is because of that reason, it takes a strong emotion to stop a losing market manually but if you have already set a stop loss, it will be easily understood as risk appetite taken for the trade.

spot trading is easier to use and understand and I think spot trading has minimal risk and less manipulation of the candles from possible cheating. while futures trading has a faster movement time but a high risk with continuous movement during the transaction. I've seen lots of people leave a trade like this in a few minutes but waste their money. well it's terrible if they don't put stop loss.

Same apply to spot trading. If you go with your instinct and spot buy shitcoin that is going to do a rug-pull you will end up with nothing.
The only difference is that you can't get margin call, but there is a easy fix for this called money management and proper stoploss which is important also for spot trading.

You can't say a tool is bad just because it requires a little more knowledge. You might as well say that a stick is better than a knife at cutting meat, because you can cut yourself with a knife.


To make it simple. In spot trading, you are buying or selling an asset, in futures trading, you are buying/selling exposure to the price change of an asset and nothing more.

Different methods of trading exist. Of fact, there are two sorts of trading: spot and future trades. They are both similar but work in different ways. Spot trading is a basic transaction that takes more balance and strategy creation. It is a day trade that many traders look forward to since they believe it is straightforward. While future transactions are viewed as the oil well in trading, they are fairly complicated to comprehend because they incorporate more features than people can handle. Future trades are divided into two categories: isolated and cross-margined trades, as well as leverages and margins, and there are two types of orders: long and short. Futures trading will appear complicated if these basic concepts are not understood.

You really tried your best to distinguish between future trade and spot trade and i think a newbie will find it still difficult to understand. Because an example will make it more easy to understanding.

And in my opinion, future trading is not for newbies as its highly risky and involve so much un-prediction so if you are newbie and have less idea about market sentiments then i suggest you to do spot trading because even if market goes down you still have your money and have a possibility of making profit again or atleast booking your own capital instead of losing it all, like in future trading.

The best part i like about future trading is, i can start even with $5 and can leverage even 10x on it but the worst part it, you could lose it all. So i don't recommend it to anyone because i am not in favor of it.

Agreed, as many used to say it's gambling, like even when a person start "X" business without proper knowledge, it's also gambling. So proper knowledge and case study is necassary to avoid gambling situations. But i also agreed with gladiator's point because future is full of risks and a newbie will always lose his money in it. So better to remain save.

Everyone probably has a rough idea about spot trading so I am trying to discuss about futures trading.  

Future Trade is one of the riskiest sites in the trading system. Money is not guaranteed here. Futures trading can generally be done in two ways, one is short and the other is long. Long trade means you have accepted trade in Bitcoin and you have accepted long in future trade. the more the price of Bitcoin increases the more money will be deposited in your account and another is shot in this method the more the value of your coin decreases the more money will increase in your account but if any  Due to the increase in the value of your coins, the money will slowly decrease from your main account and if you cross a certain limit, your money will disappear completely and you will never get it back. That is, in the house of future trading which Liq. Price says. There are certain multiples (X) through which futures trades are commonly accepted such as 5x, 10x, 15x,  20x, etc. The more X you take, the greater your financial risk.

Going with futures is mainly a gamble so if you just want to gamble, go ahead and do it. There are traders that are good with it because they can win on this gamble with the strategies that they've got.

But newbies get to misunderstand this because it's not what they think that will make them rich. It's true that there have been newbies thinking that this is going to make them rich.

Not that they know of, it's not really the actual thing that they should only know. There's more with trading and not everyone that goes in the futures win.

I really don't want to reminisce about my previous experience, but it is clear that the risk of futures trading is very bad when the market trend is different than what we predict.

Futures traders can lose their entire budget on this type of trading, but of course there are many other traders who can take profits as long as they have a good strategy and understanding. I tend to recommend spot trading over futures if someone asks which is best for beginners and non-experienced traders, but these topics may serve different purposes.

Following your logic, buying cryptocurrencies on the spot market with funds borrowed from a traditional bank can also be considered as margin trading? It does not matter the origin of the funds, whether you took them from the bank or your friend lent them to you, the trading mechanism is important here, in which there is no Margin Call option.

You can also borrow in spot trading which is more like use of leverage.


Yeah some of the things you said are correct and not totally taking out the things already said but is just to make it simpler. Like in this instance, is just for a lay man to understand that their is a kind of meeting point for drop off and collection which is in form of buying and selling but not physically.

What you explained is completely correct. spot trading is a trade that will make assets as the trader's ownership when purchased and there are assets held. whether it is sold immediately or not will not matter, it's just that the value will decrease due to fluctuations in crypto prices.

More minimal risk because there are still assets owned. while futures trading in my opinion is a higher risk because every time you place a Long or Short order and make a wrong prediction everything will be liquidated, especially if you use large leverage.

Futures trading looks easy, just guess the price is up or down but the risk is very high.
This can be like gambling if you only rely on instinct without having trading knowledge.

Wrong! Just use Google to research it, or simply use it even with a test account instead of guessing based on the nomenclature.
You can daytrade, scalp, or swing trade on both spot and futures. There is no such thing as "buyers and sellers agree on a trade to be carried out in a future". You can do whatever you want. buy now and sell in a second or after a year. The only difference is that in spot trading you are buying and selling real assets, and in futures trading you are not even tauching a real coin/bond/metal. In spot trading, you need to have the asset to sell it (or borrow it from someone who has it), in futures you only need to find a person willing to buy, and you can sell as much as you want. You are just finding a person who is willing to accept the opposite side of the transaction, and no one has to own a coin. You just agree with each other that from now on I earn on the rising price and you on the falling price.

I agree that futures trading does involves predicting the future price of an asset and there are risks involved in that and the biggest risk is the liquidation. But, still it's not correct compare it to betting which is totally a different thing. Futures trading involves buying and selling of real assets in this case crypto-currencies and they have some kind of regulation involved while on pure gaming you are just betting to win and there aren't any assets involved in that.

While it's true that futures trading does involves some risks but the gambling is purely a risk in which either you win or lose. With futures trading you have option of cross trading and isolated trading and leveraged can also be set. In a case of sudden price increase if you have put a trade on shorting you can control that with hedging techniques but in gambling there isn't anything that you can do if you face a loosing bet. 

The main difference between futures trading and spot trading is that you buy a contract, not a cryptocurrency, while with spot trading you buy cryptocurrency and, accordingly, you can freely dispose of it. In addition, in futures trading you use borrowed funds, while in spot trading you use only your own capital.

I think future trading is just like betting. You make predictions whether the price of token increase or decrease. If your prediction become true your capital token will increase. If it goes wrong you token quantity will go down until it hits stop limit or liquidate you.

Spot trading is just like buying something with thinking that it's price will increase without any prediction involved. Token price can be down or up but quantity of token will remain same. There is no liquidation and you can also store this token in your cold wallet while future trading can be perform in Cex.

As far as I know and what I have done in crypto trading in several parts, generally Spot, Futures and Margin, overall the three trading methods have different options in action.

Example:
Futures, when you open and start trading you can choose the option Limit, Market, Limit trigger, Take Profit, Stop loss and so on up to the Trailing Stop option.

Talking about Spot trading, for me and my understanding that I have done, Spot trading options are more towards investment methods, that is what is mentioned in futures trading, but that rarely happens, except: you choose a type of crypto such as Bitcoin or Ethereum, the two types of crypto are movement and changes can be made within a period of time, three days, one week and arrive at a certain selling price, Spot trading is often done for those with large capital, for example buying 2-5 Bitcoin or 5-10 Ethereum reselling within 1 week or 1 month, see the development of Bitcoin or Ethereum, profit or loss.

However, Spot trading is often an option for users with minimal capital, they are more considered as an investment method, with minimal capital.

I do believe that some of us new traders here may be in misunderstanding of these type of trading when we here them, at least at a point I was thinking far in my own quiet time on what it is just like any other trader on terms confused on.

To understand these trading types is to look at the simple meaning of future (which means a time to come). So if we understand that simple meaning then we can explain it together in terms of trade to mean a trade to be carried out or executed in a time to come (future). So in such kind of trade, buyers and sellers agree on a trade to be carried out in a future usually a long time and commodities traded include public bonds, metals, fiat or crypto, agricultural products, animals and other other things to trade etc.

This is where spots trading comes in. Spots trading is a shorter version of futures trading. It involves short time immediate buying or selling of which it features of trading are scalping, day trading and swing.

A futures trade does not have over the night charge but that exist in spots trading as swap.

There are more features though but what do you have as opinion ?