Trading Knowledge: The Difference Between Contracts and Spot
1. From a pure trading perspective, there is no difference between the two. Theoretically, all long positions can be bought in the spot market, and all short positions can be sold. Some analysts always use the spot market as an excuse for their losses, even encouraging fans to hold without stop-loss, which reflects a lack of understanding of basic trading knowledge. For traders with a complete system, there is no difference between spot and futures operations.
2. From a risk control perspective, contract risks are greater. Contracts imply leverage, which simultaneously amplifies profits and losses. Therefore, normal contract operations are either small positions + high leverage or large positions + low leverage. If it is large positions + high leverage, it is no different from gambling. Thus, contracts increase both the upper and lower limits of trading. For mature traders, the return on contracts or short-term trading is far higher than that of medium to long-term trading, but very few can understand it, perhaps less than 0.1%.
In summary.
I agree with the statement that beginners should not touch contracts. If trading ability is average, then focus on the spot market, and definitely avoid leverage. However, beginners will eventually become seasoned traders, and this process is achieved through continuous short-term practice and ongoing review, developed through personal experience; it is unrealistic to expect to make hundreds of times with one trade over several months.
