Let me describe the life of a contract trader in the cryptocurrency circle:
But if you are trading contracts, basically you only sleep 2 hours a day, with the alarm ringing every 15 minutes.
Watching the K-line fluctuations, feeling anxious, looking at the pin, feeling terrified. Deeply afraid of being liquidated.
I only have 3000 yuan in savings, that was the last capital to ride an electric bike for delivery.
No girlfriend, no time to spend with family, no sex life, not interested in anything else.
Maybe just smoke and chew betel nuts, with bloodshot eyes.
One deep night I got liquidated, and then the next day I put on my kangaroo outfit to deliver takeout.
But it's so tiring, I haven't eaten well for a long time and I'm already malnourished.
But in the cold wind, under the scorching sun, you can only endure.
You stayed up late, made a wrong delivery, and received a bad review from the customer,
You were deducted 50 yuan, and you need to deliver 10 more orders to earn it back.
You feel helpless, but at this moment, the cryptocurrency bull market has returned.
You no longer have capital to enter the market, your credit card is overdue, and you haven't repaid your friend's money.
Your parents' money has been squandered by you, and you feel no warmth in this cold city.
People in the cryptocurrency world might increase their value by 50 or 100 times overnight, or they might suddenly go to zero and have nothing.
Playing contracts in the cryptocurrency world is like playing with your heartbeat, thrilling and more stimulating than a roller coaster.
Have you ever experienced consecutive losses and frequent liquidations?
Then you feel frustrated and regret your decision?
Are you eager to recover your losses, but getting deeper into trouble?
You repeatedly fantasize about scenes of success, but reality keeps slapping you in the face?
For beginners, avoiding contract trading and starting with spot trading is a more prudent choice, backed by multiple reasonable logics.
Contract trading hides multiple risks for beginners.
The high leverage characteristic of contract trading is a 'double-edged sword' that beginners find difficult to handle. Contract trading usually allows investors to use leverage, meaning that a small amount of principal can control a larger trading scale. For example, 10 times leverage means that a 10% price fluctuation can put the investor's principal at risk of total loss. Beginners have a weaker ability to withstand market fluctuations and lack an intuitive understanding of leverage risks, making them prone to magnified losses due to short-term price fluctuations.
The forced liquidation mechanism combined with the 'spike' risk further exacerbates the dangers of contract trading. As mentioned earlier, a 'spike' can cause prices to fluctuate violently in a short time, and in contract trading, such fluctuations can easily trigger forced liquidation. Beginners often lack the foresight to predict sudden market situations and lack experience in dealing with 'spikes', which may cause them to miss the opportunity to recover after a quick price correction due to being forcibly liquidated, resulting in irreversible losses.
Moreover, the complexity of contract trading rules far exceeds beginners' understanding. In addition to leverage and forced liquidation, it also involves margin calculations, expiration delivery, perpetual contract fees, and other professional content. If beginners enter the market rashly without fully understanding the rules, they may incur losses due to operational errors (such as insufficient margin or choosing the wrong delivery time), which is particularly regrettable for beginners as these losses are caused by 'non-market factors'.
Spot trading is an ideal choice for beginners.
The risk boundaries of spot trading are clear, making it more suitable for beginners to establish risk awareness. In spot trading, investors buy the cryptocurrency itself, and the maximum loss is the invested principal, without the risk of excessive losses or liquidation due to leverage. This 'controllable loss' characteristic allows beginners to gradually accumulate experience in the market without constantly worrying about extreme situations like 'getting liquidated overnight'.
Spot trading is simple to operate, which helps beginners focus on learning market rules. The logic of spot trading is straightforward: buy low and sell high to earn the price difference, without needing to consider complex parameters like leverage ratios and margin maintenance. Beginners can concentrate on studying core content such as market supply and demand, news impact, and technical indicators, gradually understanding the underlying logic of price fluctuations and laying the foundation for more complex trading in the future.
From the perspective of cultivating trading mindset, spot trading is better at helping beginners establish rational habits. The high volatility of contracts can easily provoke emotional trading; beginners often increase their positions due to the impulse of short-term profits or panic sell due to losses. In contrast, spot trading has a relatively calm rhythm, and the psychological impact of price fluctuations is smaller, making it easier for beginners to cultivate a 'long-termism' mindset and avoid falling into a vicious cycle of chasing highs and cutting losses.
For beginners in the cryptocurrency world, the core of investing is to accumulate experience and build awareness. Spot trading provides a low-risk practical environment that allows beginners to learn the rules and refine their mindset in a real market; while the high complexity and high risks of contract trading may cause beginners to suffer significant losses at the entry stage, losing confidence in the market. Therefore, starting with spot trading is a more stable and sustainable choice.