💼 Spot Trading

In spot trading, you buy the actual asset—that means you are the owner of the cryptocurrency, stock, or whatever you’re buying. It’s straightforward: you pay, you own it.

📈 Futures Trading
Here, you’re buying and selling contracts instead of the actual asset. The exchange provides these contracts (for a small fee), and their value follows the real asset’s price.

🔑 Main Differences Between Them

1️⃣ Ownership:

Spot: You own the asset.

Futures: You trade contracts, not the asset itself.

2️⃣ Trading Direction:

Spot: You can only trade when the price is expected to rise (buy low, sell high). It’s like traditional investing.

Futures: You can trade both upward and downward (long or short)—suitable for intraday strategies.

3️⃣ Leverage:

Futures: Allows you to use leverage (trade more than what you have).

Spot: No leverage—you are limited to the amount of money you have.

4️⃣ Risk Management:

Futures: You can use Stop Loss and Take Profit to automatically exit the market.

Spot: You decide by yourself when to sell (there’s no system to lock in profit or limit loss automatically).