Hello @everyone i have attended the lecture of sir @besticofinder about How to spot trade ? If you have not attended the lecture yet then come and join this class and learn important things about trading spots. As i have learned many new things which i did not know even i did not heard about them.

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Join Class : Lesson 3 : How to spot trade ? Everything a beginner need to know ...

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Today Homework Task To Attempt:

(1) Explain Spot Trading and Margin Trading
(2) Discuss the advantages and disadvantages of Spot Trading and Margin Trading

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So Let's Start
If you want to start trading then you are given two options to start your trading. These two options are given below:

1. Spot Trading
2. Margin Trading

Spot Trading

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The word spot means "place" and the whole term "spot trading" is defined as the buy or sell of your digital assets immediately or or on any other specific and suitable time. As from the name it is clear that spot trading occurs in the spot markets at the current prices. Spot trading is basically like your normal trading. You can spend your one crypto for the other. This is immediate trading and you must have assets in your wallet to pay your trade for the current date settlement. So if you want to do spot trading then you must have enough balance i you wallet to buy assets. Otherwise if you do not have balance in your wallet then you will not be able to buy anything. And the spot trading will be lost means to say that you will not be able to buy any single thing if your account balance is zero. Because you have to pay for the trade instantly.

For Example

Let me explain with the help of an example. It is very easy to understand with the help of an example. So i select "Tron(TRX)" to explain this spot trading. Let's Suppose you want to buy $1000 worth of TRX then you have to first maintain $1000 in your wallet to pay for the TRX. And if you do not have $1000 in your wallet then you will not be able to buy TRX . So if you want o buy TRX then you have to maintain $1000 in your account balance first before doing spot trading. I hope now you have learnt that spot trading means at once .

Advantages Of Spot Trading

Everything has its own advantages similarly Spot Trading also has its advantages. Some of the advantages of the spot trading are given below:

• Spot trading is quite simple and easy to do.
• It is a best choice for the beginners.
• It does not has any extra fee or hidden fee.
• It is safe and sound and less risky.
• It is completely transparent .
• The interface for doing spot trading is also very simple and everything is clear in the interface about the fees.
• Spot trading is very helpful to hold your assets.
• Spot trading provides a chance for the users to hold their assets and to wait for the better price time.
• Spot trading is open all the time and there is no any minimum requirement for the amount to trade.

Disadvantages of Spot Trading

Some of the disadvantages of the Spot Trading are also given below:

• It may be more risky if the price fluctuate rapidly.
• It does not provide you good opportunities to make profit.
• Spot trading is also not flexible.
• It gives you less profit than the margin trading.
• Spot trading make you limited.
  

Margin Trading

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Margin trading means to borrow funds from a third party to support you position in the market. It is completely different from the spot trading. There is no any requirement to hold equal money in your wallet for trading. If you do not have enough balance in your wallet then you can also do margin trading. Basically you borrow money from the third party in this trading. So from this trading type you can buy more than the spot trading.

For Example

Let me explain with the help of an example. It is very easy to understand with the help of an example. So i select "Tron(TRX)" to explain this spot trading. Let's Suppose you want to buy $1000 worth of TRX. There is no need to maintain $1000 in your account to buy TRX. If i tell you that Overbit provides you a leverage of upto 100x on crypto currency. This means you only have $10 in your account to enter in the $1000 trading of TRX. I think this example is enough to understand the margin trading.

Advantages Of Margin Trading

There are many advantages of the margin trading some of the important advantages of the margin trading are given below:

• The most loved advantage of the margin trading is , provides more profit.
• Margin trading provides you trading as much as your investment in any crypto exchange.
• Traders can get huge benefits even with the small investment.
• Less investment large profit.

Disadvantage Of Margin Trading

As spot trading has its disadvantages similarly Margin trading also has its own disadvantages. Some of the basic disadvantages of the margin trading are given below:

• There is a lot of risk of loosing your money.
• As in the margin trading you trade at 100x so there is also a risk of loosing more money than your initial investment.
• In Margin Trading you can loose as much as the capital you have .
• Your account can be cleaned out in the Margin Trading.

Conclusion

The spot trading and margin trading both have their own advantages and disadvantages. If you are a beginner in a trading i will suggest you to join Spot trading as your first experience. Because there is less risk of loosing your investment. If i say there is zero risk then it will also be correct . Because when you buy any crypto with your money it remains same in its quantity. For example you buy 225 TRX of $ dollar then your asset trx will remain same in quantity all the time. But it is the price of that specific asset which can fluctuate. But it has less profit.

If you are expert then you should choose margin trading. But it is your style in margin trading that matters all the time. If your trading style is good then you can make more profit by investing a small amount. But if you do not know about the market trends then i will not recommend you margin trading because you can loose your money without knowing any thing. You can clean your wallet if you do not have any understanding about the trading.

Special Mentions

@steemitblog
@besticofinder
@steemcurator01
@steemcurator02