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DAY 8/10
UNDERSTANDING CRYPTO TRADING
When most people enter Web3, one of the first words they hear is:
"Trading."
But what exactly is trading?
In simple terms, trading is the act of buying and selling an asset with the goal of making a profit from price movements.
Let's say you buy Bitcoin at $100.
If the price rises to $150 and you sell it, you've made a profit.
If the price drops to $80, you're at a loss.
That's the basic idea behind trading.
Sounds simple, right?
Well, trading isn't just one thing.
There are different ways people trade in crypto, and each comes with different levels of risk.
👇 Here are the most common types:
🟢 SPOT TRADING
This is the simplest form of trading and usually where beginners start.
In spot trading, you buy and actually own the cryptocurrency.
For example:
You buy 1 SOL.
It stays in your wallet until you decide to sell it.
If the price goes up, you profit.
If the price goes down, you still own your asset and can wait for recovery.
Think of it like buying a car.
Once you buy it, it's yours.
🔴 FUTURES TRADING
Futures trading is more advanced and much riskier.
Instead of owning the actual asset, you're trading contracts based on where you think the price will move.
You can make money when prices go up.
You can also make money when prices go down.
The biggest attraction is leverage.
For example:
With $100, leverage can allow you to trade as though you had $500 or even $1,000.
The problem?
Losses are multiplied too.
A small market movement against you can wipe out your entire position.
This is why many experienced traders tell beginners to learn spot trading before touching futures.
🟡 DEGEN TRADING
"Degen" comes from the word "degenerate."
In crypto, a degen trader is someone who takes very high risks in search of very high rewards.
These traders often buy:
• Newly launched tokens
• Meme coins
• Low market-cap projects
The goal is simple:
Get in early and catch massive gains.
Sometimes a token does a 10x, 50x or even 100x.
Other times it goes to zero.
Degen trading is less about safety and more about speculation.
It's the highest-risk category of crypto trading.
So which is best?
🟢 Spot Trading → Lower risk, beginner-friendly.
🔴 Futures Trading → Higher risk, requires discipline and proper risk management.
🟡 Degen Trading → Extremely high risk, highly speculative and unpredictable.
One important thing to remember:
Most successful traders weren't successful because they made the most money.
They were successful because they survived long enough to learn.
In crypto, protecting your capital is just as important as growing it.
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