Contents of this article:
There are different types of earnings on cryptocurrency and different types of trading on exchanges. One of the main ones is spot. What is spot and spot market, what advantages does it have, how to learn to make money effectively, a beginner should learn before entering the exchange in order to feel confident and not commit rash acts that cost him a deposit.
What is spot?
Cryptocurrencies can be sold and bought instantly on the spot market. The spot price is the current price of the coin; it is formed on the basis of analytical data and the latest transactions made on the exchange. The final value of the crypto in the spot market is dictated by traders. In simple terms this is the most common trading option, when one exchange player sells a coin for a certain amount, and the second one buys it, and the transaction closes instantly.
Differences and advantages over futures
Spot is just one of the most popular types of trading on the crypto market; futures are no less popular. The futures market involves pending transactions unlike the spot market.
Contracts are sold that indicate the price of a crypt at a specified time and date of the transaction in the futures market. The futures price is predicted and not current at the time of buying the contract since the cryptocurrency exchange rate is constantly changing.
Traders can access an asset without owning it thanks to futures. It means that at the time of buying or selling a contact, a trader does not have to have bitcoin or another coin; he must fulfill his obligations under the contract later, at the agreed time. A trader can receive an asset directly or earn on the difference in price upon the fulfillment of the terms of the contract by trading futures.Difference between spot and futures:
- Leverage. Traders cannot use leverage in the spot market, while credit improves capital efficiency in the futures.
- Short and long positions. By holding assets, purchased on the spot market, a trader can earn on the growth in the value of the crypt in the long term, while they earn on short-term changes in the exchange rate on the futures market.
- Liquidity. Futures markets have higher liquidity than spot markets.
- Asset prices. The value of a coin depends on supply and demand. The current price of the crypto is decisive for transactions in the spot market. The price of a futures contract is based on the underlying spot price and the futures contract premium, which can be either positive or negative.
Advantages of spot trading:
- risk management (participants manage only the assets they have at the time of the transaction);
- price transparency, regulated by supply and demand;
- simple rules for transactions.
Why should you study?
Crypto trading may seem simple at first glance. It is enough to choose suitable transactions and close them, increasing capital having opened a deposit. But it is far from true. It is easy to fall for manipulation and lose a deposit in the first days of trading on the exchange without understanding the features and trends of the market.
You need to learn trading if:
- you want to trade crypto successfully from the first transactions;
- you have a small deposit, and you do not have the opportunity to learn from your mistakes, losing several deposits in a row;
- you want to feel confident in the market, understand the psychology of the exchange players and recognize rapidly changing trends.
Training spot for beginners
Any type of trading, a beginner can master in two ways, is on their own or with a mentor. If you are not ready to spend months processing information from open sources and learn from your own mistakes, losing one deposit after another, you should approach the development of the crypto market consciously by completing a training course, developed by professionals.
The Crypto Crew team has created an accessible and effective course for beginners, where everyone will quickly master the basic trading skills, understand the intricacies of the market, and understand how to act on the exchange on their own, analyze and not succumb to manipulation. Become a part of the Crypto Crew to trade the spot market safely and successfully!
Author: admin_cryptocrew
