Finance

10 reasons to start spot trading on Zineеra

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The reason for the interest of crypto investors in futures is clear. Many traders do not have large amounts to trade, which makes it tempting to use borrowed funds to increase profits. But even on an uptrend, the price of bitcoin tends to pull back, triggering multi-billion dollar liquidations of long positions. Then there is a need to recapture losses, preferably in one transaction. All this results in an endless cycle of fear of missing out (FOMO) and despair. But all this can be avoided by using spot on a trusted exchange.

Switching from futures trading to spot trading, where the assets themselves are bought and sold instead of contracts for them, would be a solution for many market participants. Exchanges offer tools for direct conversion from fiat to digital currency and vice versa without even having to go to a full-fledged trading interface. Many traders prefer not to use spot trading. Historically, holders of cryptocurrencies in the spot market have been the butt of ridicule.

But now they look at this phenomenon differently because there are many reasons to switch to spot trading and actively earn on it. Here are the most important of them:

  1. Buying in the spot market automatically helps manage risk. Many traders are bad at risk management. Even those who have learned the theory are often unable to put it into practice. Buying in the spot market helps manage risk by limiting the trader’s buying power.
  2. No risk of liquidation. Of course, it is possible to end up with a hopelessly collapsed altcoin, but you don’t have to worry about the liquidation price.
  3. Patience and discipline. Many traders use too large leverage and open too large positions. As a result, they have to aggressively manage such positions and close them prematurely. Spot trading limits this aspect and allows you to comfortably endure market fluctuations without having to make hasty decisions.
  4. Calm perception of PnL. When trading with leverage or in extremely risky positions, we become hostages to the profit and loss ratio (PnL), constantly monitoring its change, panicking due to evaporating profits or increasing losses. Spot trading eliminates such fears, making the thought process freer.
  5. Ability to survive fluctuations. Although this feature has already been mentioned, it makes sense to dwell on it in more detail. Spot trading is less stressful, and therefore a trader will be less likely to overdo things and spend all day charting. This helps to see how often the markets stay in the same range, movements in which take out positions with high leverage without any significant price changes in the broader perspective. By switching to spot trading, a trader may be faced with the revelation that they are abusing microtrading.
  6. An opportunity to see the bigger picture. Buying in the spot market at long-term supports is a smart move during a bull cycle. Many choose entry points on the daily chart only to close them due to moves on the five-minute chart.
  7. Let the market work for you. In a bullish cycle, it makes sense to leave all the hard work to the market. In such conditions, you just need to give the market the opportunity to increase the value of assets, and the most unfortunate decision is to exit the transaction before the rate goes up.
  8. Easier to choose entry points. Spot trading does not require such strict entry conditions. Many are waiting for a pullback or are guided by short-term charts. The spot trader tends to buy on strength and retracements. We return to a large long-term level of resistance / support, buy, rest. 
  9. You can continue to manage positions. In spot trading, there is no need to give up active position management. Even decisions based on long-term schedules will have points of reversal.
  10. Limitation of harmful thinking. People think, “I need to go long with leverage to make a lot of money when the trade works.” They never think that a trade might fail five times due to market fluctuations. Every trader sees himself as a winner and considers it necessary to hit the big jackpot right now. Spot trading helps to avoid such thoughts and in fact turns out to be more profitable for most traders who are still counting on the high point due to the use of leverage. Many trades would be much more successful if traders simply stayed in positions. Options trading can also help in this regard.

FOREX SCALPING IN FOREX TRADING METHODS

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