Long term investing - Spot, Margin or Derivatives? - page 2.

AmoreJaz

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Quote from: passwordnow on October 01, 2022, 03:53:35 AM

Quote from: Hamza2424 on October 01, 2022, 02:09:29 AM

Spot is the most productive side for the long long term investment as Low risk and also highly recommend for maximum profits.

You're likely to lose more there than holding if you're for the long term. Long term doesn't mean that you have to actively trade and get the maximum profit. Someone who's aiming for that is losing more than the others who are chill with holding and does nothing.

Quote from: Hamza2424 on October 01, 2022, 02:09:29 AM

I know that Future trade is more attractive in term of the profits but as there is high risk for the investment according to the market sentiments in long term there is no place for the Future trade. Spot is a best option where surety of profits can be managed.

Don't forget that in spot, losing is part of it and it's inevitable. There are traders that lose more than profiting whether they are on the spot or margin.

only few coins are worth holding long-term. this is why if you will venture on coins outside the top 10, you need to be very cautious with their market performance. if you feel they are about to go down, better sell it while you can. futures is only for those who know what they are doing. spot trading is good for starters, at least get the grasp of crypto trading. once you are getting good, you can explore other types of trading. but you need to start small so you won't lose much.

passwordnow

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Quote from: Hamza2424 on October 01, 2022, 02:09:29 AM

Spot is the most productive side for the long long term investment as Low risk and also highly recommend for maximum profits.

You're likely to lose more there than holding if you're for the long term. Long term doesn't mean that you have to actively trade and get the maximum profit. Someone who's aiming for that is losing more than the others who are chill with holding and does nothing.

Quote from: Hamza2424 on October 01, 2022, 02:09:29 AM

I know that Future trade is more attractive in term of the profits but as there is high risk for the investment according to the market sentiments in long term there is no place for the Future trade. Spot is a best option where surety of profits can be managed.

Don't forget that in spot, losing is part of it and it's inevitable. There are traders that lose more than profiting whether they are on the spot or margin.

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Spot is the most productive side for the long long term investment as Low risk and also highly recommend for maximum profits. I know that Future trade is more attractive in term of the profits but as there is high risk for the investment according to the market sentiments in long term there is no place for the Future trade. Spot is a best option where surety of profits can be managed.

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Quote from: harizen on September 24, 2022, 06:43:14 PM

I didn't think you are an idiot. It's just that you test a strategy and since we don't know what will happen next, you end up losing on the process. That's a wonderful experience I should say and not a dumb thing that you did.

What kind of strategy should you do now, I think you already know it but there's a worry that it might lead to you again losing.

I won't say any advice but just continue testing some strategies until you found a working one that's fit on your long-term goals.

Test a strategy and lose $35k in the process? I think that's a lot but anyone can use a small capital first when they know that it was only a test run and they are not sure if the results is going to be positive or not. Anyway, he cleared it out that what he did at first is investing and maybe he is investing blindly and ended up picking the wrong coins. It's only great tho that he didn't give up after losing massive and it seems he is learning now because there he is, asking if the new starts that he is using are correct.

@OP I think you are doing fine with it, as you said you are seeing some positive results now. Just continue doing it and I hope you will soon recover all of your losses.

Captain Corporate

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Trading or investing? If we are talking about investment then it should be a little bit more long term, which means it does happen via spot, but its basically buying something and holding it for a very long period of time until it makes you money. On the other hand if we are talking about something like trading, then these three would matter based on how good you are with them, doesn't matter which one you do, as long as you are good at it. I could make a lot of money via spot, but lose a lot on margin, you could be great at derivatives but lose on spot, its not how you do it, its how well you do it that matters.

alik111

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Long term investment in margin or derivatives trading is much risky to be liquidated.So we should go for spot trading for long term investment.And we should enter the market in the bear session for the maximum profit for long term holding.

loll_l

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Thanks for all of your replies - it's nice to see a forum and community who are actually trying to help and advise rather than condescend a newbie

I realise that the most common and less risky way to invest long term is to purchase a coin/token through Spot on an exchange like Binance or KuCoin and then transfer the coin/token to a wallet like TrustWallet or MetaMask (as this is considered safer than keeping the coin/token on an exchange)...

If however, hypothetically speaking, we lived in a world where exchanges were perfectly safe and you didn't need to move your crypto to a wallet... and in this hypothetical world I wanted to purchase crypto with a 2x leverage, I was just wondering what the downside (apart from safety) of keeping a long term trade open in Derivatives would be....

From what I can gather through your replies, it seems as though another downside of going down this route (apart from safety) would be that keeping your trade open in Derivatives will accumulate fees that would not be accumulated in Spot.... How do these fees work?

Using my initial example which I have quoted below….

Quote

EXAMPLE

If I purchase $1000 of BTC using the ByBit Derivatives pair BTC/USDT (i.e. using USDT to purchase the BTC) and I buy the BTC when the price is at $14k using a leverage of 2x, please can someone tell me if I've understood the following scenarios correctly:

1 - If, in a years time, the BTC price goes up from $14k to $56k, that would mean the price has multiplied by 4. That being the case, my investment of $1k USDT which I leveraged at 2x (so effectively invested $2k) will go up to $8k, resulting in $7k profit... Have I understood this correctly?

In an example like the above, how much in fees can I expect to pay over a year?

harizen

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I didn't think you are an idiot. It's just that you test a strategy and since we don't know what will happen next, you end up losing on the process. That's a wonderful experience I should say and not a dumb thing that you did.

What kind of strategy should you do now, I think you already know it but there's a worry that it might lead to you again losing.

I won't say any advice but just continue testing some strategies until you found a working one that's fit on your long-term goals.

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Quote from: coinerer on September 24, 2022, 07:40:22 AM

I am not find any connection with Spot, Margin or Derivatives for long term investment. Spot, Margin or Derivatives just a different trading system. if you want to keep holding your investment coins then you must keep your coins on your personal wallet or any exchange long time as much as you want. here spot can help you if you want to hold your coins in any exchange account

Me too, I'm confused.

Just like what everyone else have figured out about long term investing and putting that into those things that OP has mentioned, it's like keeping it there for long and that's not an advisable thing to do.

Those three that has been said are the trading features where an exchange platform has to offer for every user that they have.

I don't find any significance for telling that if you're going long term, you should put it on spot, derivatives and mostly in margin.

It's misleading and if a newbie thinks of that and putting it long on margin, well, just a matter of time and he'll receive a text of being liquidated.

YOSHIE

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Quote from: loll_l on September 21, 2022, 11:06:48 PM

Anyway, regarding long term investing and whether I should use Spot, Margin or Derivatives... My plan is to invest in loads of different coins/tokens but if we just use BTC as an example...

Before you continue trading or investing, of course you must understand the meaning/difenising of the three trades, as you said, namely: (spot, margin and derivatives).

Before that you need to know in detail what is called spot trading, Margin and Derivatives, for that you can understand the meaning of the three trades, below.

Quote

The spot market or spot market is a market for buying or selling financial instruments, commodities, or other assets using direct payment or cash techniques. Therefore, the spot market is often referred to as the cash market.

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Margin trading is a method of trading assets using funds provided by a third party. When compared to a regular trading account, Margin accounts allow traders to access larger amounts of capital so they can apply to their positions.

Quote

What are Derivatives? Derivatives are contract agreements entered into by two or more parties with the aim of selling or buying assets or commodities. Later, the contract will serve as the object of trade. The price of this contract value must be agreed by both parties.

After you understand the three trades, you can conclude what trading methods are worth using or long-term investments, I can suggest for you the right long-term investment method you do is the spot method.

Margin and Derivative methods are not appropriate / suitable if you use it as an investment method, the two methods that are the most appropriate for you to do are trading, because they have a third party.

coinerer

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I am not find any connection with Spot, Margin or Derivatives for long term investment. Spot, Margin or Derivatives just a different trading system. if you want to keep holding your investment coins then you must keep your coins on your personal wallet or any exchange long time as much as you want. here spot can help you if you want to hold your coins in any exchange account

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Quote from: GelatikKembar on September 23, 2022, 12:42:46 PM

Investing in cryptocurrencies is of course very convenient to do through the spot market,

I don't think that you should let it stay on the spot market when you're just going for long term. Like the majority's concern about holding in an exchange, you have no full control to your crypto there.

Quote from: GelatikKembar on September 23, 2022, 12:42:46 PM

I'm sure 99% of people in this world will also make purchases in the spot market and store them in a wallet,
whether it's a hardware wallet or a software wallet. For sure Spot market is the first and easiest choice to buy Bitcoin and altcoins.

Yes, we do purchase in exchanges and should be a norm to keep them in hardware wallets or those wallets good for long term not with exchanges.

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Quote from: loll_l on September 22, 2022, 12:12:33 AM

Quote from: hd49728 on September 21, 2022, 11:28:43 PM

Long term investment is not related to Spot, Margin or Derivatives.

When you invest long term, you must keep your coin in your wallet, not on exchange. If you mean Spot, Margin or Derivatives, you must store your coin at exchanges. That is bad in security for your coin and capital.

In addition, if you invest and store your coin at exchange, you can easily to go with trading because it is very convenience to trade on exchanges. Then you will change from long term investment to trading and it is bad.

Thanks for the advice but these are only hypothetical queries so when reading them please imagine, hypothetically, that wallets don't exist and exchanges are the only place to hold crypto.

It should be remembered that with margin trading, your position may be liquidated and you will completely lose your money. In addition, margin trading implies the use of borrowed funds of the exchange, and you will need to pay an hourly commission for its use. So a spot purchase will be safer for you, although it will bring less profit than using margin.

GelatikKembar

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Investing in cryptocurrencies is of course very convenient to do through the spot market,
I'm sure 99% of people in this world will also make purchases in the spot market and store them in a wallet,
whether it's a hardware wallet or a software wallet. For sure Spot market is the first and easiest choice to buy Bitcoin and altcoins.

Oneandpure

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Which one trading kinds do you wanna try despite your decision with short or long term trading, I saw you try leverage of 2x and looks want to trade on future trading, I don't think most recommended way exactly with long term with future trading because you have pay fund fees with this kind trader. Have promising with much profit earn than spot trading but I don't think long term holding need pay fund fees in future trading, better if try with long term trading better with spot only without try with future trading have bigger risk if suddenly miss out from your price predicting, although you try to open long position with bitcoin.

Spot trade have less risk because your investment funds as bitcoin keep safety without paying fees every days different when your use future as your long term investing. However when price drop from your invested still have bitcoin assets although values drop, different with future you will get notice with liquidation and loss all your bitcoin investment.

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Quote from: Inspiron14 on September 22, 2022, 11:05:26 AM

Investment for the long term which I think is very safe and comfortable of course I choose to invest in the Spot Market and choose the Binance platform to hold altcoins there,
I choose the Spot market because I'm used to trading there, and for derivatives and margin I still don't understand it, it's just that it's a little more complicated.

Binance is a good exchange but for long term purposes, it is still good to have it on your own hard wallet which you can have the control, and away from any institution which might affect your investments later on. Though if we are talking about long term trade here, I mean for just months then spot trading is really the safe option. Your profit for long term is also not guaranteed, so make sure to buy only the good coins for your long term purposes.

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Quote from: loll_l on September 21, 2022, 11:06:48 PM

I'm one of those idiots who invested in a bunch of coins/tokens at the top and lost a load of money - around $35k in total Angry

I sold all of my coins/tokens a few months back but I will be reinvesting in numerous different projects again when, or if, BTC goes down to $14k - which I believe will be somewhere close to the bottom.

So sorry to hear that. But as your experience, not all projects are valuable and survive to have a brighter future. Many are shit projects or scam projects. That is why I personally always avoid new projects, moreover that have not been listed in any exchanges or listed on DEX or low cap exchanges that only utilize the pump and dump process. this is high risk.
It is true also that we need to diversify our money into several coins investment. But it doesn't mean that we must invest in numerous shit coins.
It is better to invest in Bitcoin at first, and top coins. At least, we can decrease the risks. However those top coins are also valuable for long-term investment, althoguh right now the price still decreasing, but I beleive that this will be able to rise up in the future.

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Since you lost a lot I will prefer long time investment. So hopefully once a time you can recover your lost funds. It's normal when people enter first time in crypto they lost a lot due to no experience with the crypto movement. Who thought Bitcoin would be below $20K? Everything is possible in cryptocurrency, we don't know where is the exact bottom. But you shouldn't be selling your holding in too much loss. What is the benefit then if you can't hold a longer? Once dump means dumped, have to wait for recovery. Because you already lost, it won't be recovered if you sold. But you have to choose the right coin, not a shit coin or pump dump coin. That's how you will be lost your portfolio too quickly.

batang_bitcoin

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If you don't know what's the purpose and how to use margin, just don't get your hands on it. The farther, the better and if you're into long term investing.
It's all about just keep on holding and it's up to you on how long is that hold you'll do. Because, you can just put it on a wallet, where you're holding the keys.
Unlike putting it on an exchange like what you're planning to, you don't hold the keys there.

Findingnemo

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Don't add such leverage to your long term trading capital which simply add the risk and it may lead you to close at the wrong position and ends up wrecking again. So just spot trading is good and you will have all your assets on your wallet and comparatively less risky. So as you said in the example you still can make 300% return if Bitcoin reaches new ATH which is too good in practical terms.

Topic: Long term investing - Spot, Margin or Derivatives? - page 2. (Read 532 times)