Spot Trading
Hi guys, welcome to this space once again. Am super happy to have you visit my blog once again. I want to believe you're getting value. Trust me, I won't slow down. So the last time we talked about Revenge Trading, it causes and how that it's detrimental to us as traders.
Today we would be looking at yet another interesting topic which I've titled "Spot Trading". We would be exploriñg this topic shortly and I just hope you enjoy every bit of it. Kindly tag along as I take you on this journey guys.
Cryptocurrency has come to stay and it has made the financial realm much more easier as it has proven to be more efficient and profitable. We have platforms where we buy and sell these crypto and even wallet where we store them after purchase.
On the trading platform available we have different market, we have the futures market were people enter future contract and we also have the spot market which seems to be the basic and fundamental market which most trader, if not all have at some point interacted with. Let's talk about the spot trading/ market in the next section.
Spot Market in crypto is a market place where one can trade (buy or sell) cryptocurrency for immediate delivery. This is unlike the future kind of contract that get delivery of asset or settlement at a future date. A trader or investor who purchases a coin here purchases it at the current market price which make the transaction instantaneous.
The buyer can then take ownership of such asset using his or her wallet as storage. This market is the primary or basic market for buying and selling cryptocurrency at the prevailing/current market.
So in a nutshell, the spot market provides a ground where buyers and sellers can come and carry out real time transaction. They ensure there is enough liquidity which makes transaction swift and seemless. A trader can easily enter and exit a position without delay or prolong future settlement/delivery.
Sport Trading is a trading strategy used by spot traders, they aim to buy Cryptos when the price is very low and sell when the price becomes high in a bid to make substantial profit out of such transaction. Immediately they purchase the crypto, they at that point claim ownership of the crypto which is then stored up using wallet until there is a need to transact with it again.
A CEX or DEX platform can be used to spot trade. There is also what we call OTC market. It simply means over-the-counter market where brokers carry out these transaction on behalf of their clients. On Dex/Cex platforms, you can directly spot trade using your wallet, a smart contract facilitates the whole process. It's also important to note that a fee is always attached to this transaction.
Another important point to mention as touching spot trading is that the risk is minimal, you invest directly with your money, I mean with what you can personally afford and risk unlike margin trading where you can suffer more in the even of loss.
Another fascinating fact is that you are not under pressure to sell even when the coin becomes worthless. One is actually at loss when one sells at loss. It therefore means one's coin is not worthless yet until you sell it off at that state. You are free to hold as long as you want to until it appreciates.
Making profit from spot is simple, it only requires your time and patience. How long can you wait for your asset to appreciate. Many experienced trade use the Dollar-cost-average to get the best out of their spot trading activity. They sure know that their patient will pay off in a bull run.
So much have been said already, I just hope you've been able to pick one or two point so far about spot trading. I hope to delve even more deeper when am opportune to make another post.
There you go friends.I would love to wrap it up at this juncture. I want to believe you've gotten so much from this piece. As my usual custom is, I would always encourage that you DYOR to be sure of every financial step you would want to take as I won't be liable for any form of loss encountered by you.
Feel free to share with me your thoughts in the comment section. Thanks for your time once again. Gracias!
Disclaimer: This post is made as an education and not investment advice. Digital asset prices are subject to change. All forms of crypto investment have a high risk. I am not a financial advisor, before jumping to any conclusions in this matter please do your own research and consult a financial advisor.
Regards
@lhorgic♥️
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