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Which should a newbie in the crypto world start with, contracts or Spot?
Should newbies in the crypto world start with contracts or spot trading?
When just entering the crypto world, many people have a question:
"Contracts sound like they have high returns, doesn't playing contracts make more money?"
"Spot rises slowly, is it too conservative?"
But after actually getting into the game, I found that the two directions are completely different in terms of difficulty.
Spot vs Contract, how should a newbie choose?
First, the conclusion: 99% of newbies are more suited to start with Spot.
Why?
Spot is "buying coins and holding them"; once you buy, you own this coin.
• Similar to buying gold or stocks, although it feels bad when the price drops, as long as you don't sell, there is still a chance to wait for a rebound.
• The risk is relatively controllable; even if you incur losses, it won't lead to a complete liquidation.
Contracts are "leveraged trading", you do not actually own the coin.
• Similar to "predicting rise and fall", if the direction is wrong or the volatility is large, the account will be directly liquidated.
• Often it's a K-line, and the profit is gone.
Back in the day, I was lured into it by a friend's words, "Contracts are exciting." I got the direction right, but I used too much leverage, and a small pullback led to a direct liquidation. I lost my money and my confidence.
Think carefully: are you here to speculate, or to understand in the long term?
Many people think that the crypto world is a place to get rich quick, but to be honest, those who really make money are not the ones who get rich overnight from contracts, but rather those who understand trends over the long term and take steady steps.
Contracts are amplifiers; they can magnify profits as well as losses.
Especially for newbies, if they haven't even learned the candlestick charts, using 10x or 20x leverage is basically giving away money.
Newbies can start with this:
• Start with Spot to familiarize yourself with the rhythm of the crypto world, platform operations, and security settings.
• Learn to read basic candlestick charts, understand popular projects, and pay attention to on-chain data.
• Gradually try low leverage and practice on a demo account.
• If you really want to trade contracts, it is also recommended to start with a small position + small leverage and strictly set stop-loss.
In summary:
Spot is a gradual process of understanding the market, while contracts are like walking a tightrope with a magnifying glass.
What newbies fear the most is not losing money, but being scared away as soon as they come in. #BTC# #ETH#