Spot vs futures trading

Spot trading is the simple kind: you buy a coin, you own it, and you can sell it whenever you like. If the price goes up 10%, you make 10%. If it falls 10%, you lose 10%.

Futures trading is a bet on where the price will go, without owning the coin. You can bet on the price rising ('going long') or falling ('going short').

Futures also allow 'leverage' — borrowing to multiply your bet. With 10x leverage, a 5% price move becomes a 50% gain… or a 50% loss. If the price moves far enough against you, the exchange closes your position and you lose your entire stake. This is called liquidation.

Most beginners should stick to spot. The majority of people who trade futures with leverage lose money — the statistics from exchanges and regulators are very clear on this.