Trading Playbook - 002
In our last post we discussed on how much capital we should keep in our active trading account and how much to keep in stable coins.
Now, we move on to second challenge we face in terms of selecting the trading mode between #SpotTradding , #Margin trading and #future Trading. Each of the trading mode has it's own merits and disadvantages.
--> Starting with Spot Trading: Spot trading is best for people looking for low risk and low return option. It is good for someone who believe in a particular project/coin and invest for long term (for a year or more). When someone plans to get into spot trading with long term view, s/he doesn't need to worry about technical or timing the market. The decisions are generally taken based on fundamental of underlying asset. However, in bull market, being focused on select few coins in spot trading may not help you in taking full advantage of market.
--> Margin Trading: Margin trading is medium risk and medium reward product. This is considerably ideal for people looking for stress free trading with long terms growth in bull market. Cross margin trading helps in using the profit of one coin in opening or covering position in other coin which might run in short to medium term. Here, entry and exit from a trade may become significant in order to ensure that we do not expose our selves to large positions.
--> Future Trading: Future trading has relatively high risk and with that comes high return. A single wrong trade can liquidate your capital and similarly, a single good trade can boost your wealth exponentially. Due to it's inherent nature, risk management is very important for Future Trading. Also, timing of entry and exit along with technical analysis becomes very important over and above the fundamentals of the coin.
We will focus more on Risk management, position size, DCA and how to create a disciplined structure for our Future and Margin Trading.
Do let me know your views or any other topic you want us to cover. Do not forget to like and share!
