Hello everyone, i would like to talk about why spot market is most likely better choice to buy crypto than futures/margin market. A lot of people choose not to buy spot and i get it. Everyone would like to get rich in week by trading on futures market(with 100x leverage), am i right? Out-trading the market becomes increasingly difficult the more bullish the conditions. Sure you can still get long on perps or with leverage but that comes with a whole heap of other problems to manage. So let me cover the positives of buying spot.
1. No risk of liquidation
You don't need to worry about a liquidation value on your position. I know it's obvious, but i'm sure this is a tremendous relief for traders when you don't need to worried about your position especially since, as we know, many people under pressure make ill-considered decisions.
2. Discipline
Most people are overleveraged and their positions are too big, they have to close down positions early and manage them aggressively. Spot stops that and allows you to relax and survive chop without overtrading.
3. Easier risk management
Let's face it the majority of you are awful at risk management, you say you understand it but you still don't implement it. Buying spot forces your hand slightly in restricting your buying power.
4. Better view/Ability to see more
So many look for positions on a daily, get filled and then overmanage a trade on the 5m, closing for no other reason than panic. As a spot trader you are more relaxed and also your patience is on point.You can easily delve into the chart.
5. More relaxed on entries
Conditions need to be less precise. With leverage you need to be precise, because of liquidation, because of that you will probably wait for entries, which only increases your impatience and you have a better chance of making a mistake under the pressure.
6. No bad mindset
People think "I need to long with leverage so I can make big $ when the trade hits". They never consider the trade failing so many times while price chops. Every trade feels like the winner and you need to enter to make the big bucks right now. Spot helps to remove this thought process and actually is more profitable to the majority of people.
7. Letting the market do the work
We're in a bull market, let the market do the heavy lifting. When we're in these conditions, you just need to let the market do the work in increasing value, the worst thing you can do is try to out-trade it (newer traders) - price go up.
Conclusion
I know that futures/margin markets are good way to get more $$$ and if you are professional trader, it's better way than spot, but for most of traders spot are better option in my opinion. And remember do not attack this market with the "I need to 100x this to win big" - you need to consider the longer term. I like to push risk in these conditions, but at the same time the biggest downfall you can have is overtrading and overmanaging positions.