The Three Major Trading Methods in the Crypto World: A Must-Read for Beginners

Want to trade crypto but don’t know how? There are 3 main trading methods in the crypto world. Choosing the wrong one could wipe you out. Let me explain them clearly.

1. Spot Trading—Simplest and Safest

This is just using money to buy coins directly, which are stored in your wallet. No leverage, no interest, you only earn or lose from price movements.

Features:

• You actually own the coins
• Coins are in your own hands
• Lowest risk
• But returns are limited

Suitable for: Beginners, long-term holders

2. Spot Margin Trading—Leverage Comes with Risk

The platform lends you money to trade. For example, you have 10 USDT, the platform lends you 90 USDT, so you can trade with 100 USDT.

Key Points:

• Up to 10x leverage
• Need to use your coins as collateral (can’t borrow everything)
• If the market moves against you and hits the liquidation line, you’re done
• You have to pay interest

Risk: Forced liquidation, total loss

3. Futures Trading—High Leverage, High Return, High Risk

You don’t actually own any coins; you’re just betting on future price movements. Leverage can be 25x or even 125x.

Two Types:

• Fixed-term Futures: Has an expiration date (day/week/month/quarter), must be settled at expiry
• Perpetual Futures: No expiration, can hold indefinitely (but you have to pay funding fees)

Advantages: You can profit from going short (make money when the market falls), use small funds for big positions

Disadvantages: The higher the leverage, the easier it is to get liquidated—$10 can become $0 in an instant

Quick Comparison Table

How to Choose?

Beginners: Start with spot trading, avoid leverage

Experienced and want higher returns: Use spot margin with max 3-5x leverage, don’t be greedy

Pro traders: Futures are an option, but manage risk strictly, take responsibility for your funds

Core Advice: No matter what you play, never put all your money in. One day in crypto equals ten years in the real world. 😤