Hello friend Today I will talk about Spot trading and Margin trading, the advantages and disadvantages of both.

What is Spot Trading

Spot trading is the process where a buyer or a seller come together to exchange cryptocurrency, In this process the settlement happens instantly.

Order book

A order book consist the list of all the current offers that are available in the market , in order book a trader can view the offers that are available to buy or sell an asset. A trader can execute a trade anytime of the day because the order book is updated constantly

Bid Prices

The Bid price is the price set by traders those ordering to buy a particular assets, It is usually represented with green colour.

Ask Prices

The asking prices is the price set by traders that are offering to sell a particular assets. It is usually represented with the red colour

Advantages of Spot Trading

It allows a traders to find a better deal if they are not satisfied with the current price

If a trader buy or sell a particular asset, the asset bought or sold reflected immediately the order to buy or sell is completed.

A trader can start with any amount because there is no minimum capital.

Disadvantages of Spot Trading

The only disadvantage I see on spot trading is that the trading is affected by market price fluctuation

Margin Trading

Margin trading is a type of trading whereby a trader can use a borrowed funds either from a broker or third party to trade an asset. In this case traders have access to large capital allowing them to leverage their positions, which allow the trader to make large profits anytime the traders makes a successful trades.

Advantages of Margin Trading

The sweet thing about margin trading is that it allow traders to make a large profit whenever they make a successful trades because levarage positions they hold.

Disadvantages of Margin Trading

This is a high risk on margin trading, the loss largerly if any trade is not successful just like the way they make like profit on any successful trades

Conclusion

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