Since the Inception of bitcoin, the bearish and bullish trend in the market has been a deterrent factor for traders willing to trade in the ecosystem, because the market daily greets traders with high volatility.
The volatile status of the market has liquidated many from trading, therefore, stringent measures are deployed by different Blockchain to introduce different trading measures which could be a saving haven for the trader, thereby opting for the option that suits their analysis predicament.
One trading measure investors found safe is SPOT TRADING, because of its less liquidity nature. In this discussion today, I will do an expository explanation of spot trading, how it can serve as a saving ground for traders
What is spot trading?
Spot trading refers to buying and selling cryptocurrency for immediate delivery on a specific date. In other words, it means immediate receiving of coins purchased at the exact price of the market.
This is quite different from future trading, you get your commodity in the future because it will wait to mature and appreciate based on leverage before you can receive your funds.
No leverage is required.
Spot trade allows you to trade with your fund without the need for leverage, unlike future trading which requires you to trade the market with high leverage. Talk about leverage, leverage in crypto simply means the money you borrowed to trade stocks because you can't afford the trading money on your own. This a risky means of trading because it exposes you to a high level of liquidity if the market works against you, this is a norm for future trading, but for spot traders it is free from leverage, you can trade with your fund and make a reasonable profit trading.
Immediate market trading.
Sopt trading deals with immediate buying and selling, it has no future return. The reason why it is termed spot is the fact that you get your money on the spot. The advantage of trading a spot is that you don’t wait in the process of funding, it deals with immediate funding.
Market price.
The market associated with spot trade is the current, which implies that you get your asset at the current market price, spot trading doesn't delay your order mitigation before you get your order, you get your order immediately at the current market price.
Less volatility.
The most fearful nature of traders is market volatility, everyone is always careful of the market volatility with the fear of liquidating, which informs people's reactions to the market psychology. Spot trading is a haven for many traders because it has a lower volatility ratio. You don't liquidate your fund unless otherwise, a coin dump. No matter how the market might bearish the possibility of liquidating is low for spot trading, this is the reason many traders prefer spot trading to other forms of trading.
Less liquidity risk.
The real-life application of trading is liquidity, many traders strongly avoid this while trading. They are curious to scout for the best trading that can give them a low liquidity ratio. Spot trade is the best liquidity, when a coin dumps that is the only time liquidity can be visible in spot trading. This is one of the advantages of trading a spot, you barely fear liquidity during trade.
Make the best profit during trade when you adopt spot trade as the leverage for trading. Although the market psychology poses a liquidity and volatility threat if you choose to trade spot you have a safer advantage than any form of trade.
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