Beginners Guide To Spot Trading on WEEX

In the crypto market, there are different types of trading; some more complex than others.For beginners, it is important to first get a hang of spot trading before moving on to more complex types of trading as it is most likely going to be the first type of trading you’ll execute.

In this article, we’ll delve into the following:

• What is spot trading in crypto?

• How Spot Trading Works

• Spot Trading vs Futures Trading

• Benefits of Spot Trading

• Getting Started with Spot Trading

• How To Profit From Spot Trading

• Conclusion

What Is Spot Trading In Crypto?

Spot trading is when you trade your cryptocurrency at the current market price, also known as spot price. The main goal of spot trading is to buy low and sell high to make a profit.

Spot trading can be divided into limit orders,  market orders, and stop orders.

• Limit Orders: Limit orders allow you to set a specific price at which you want to trade the coin.

• Market Orders: When you place a market order, you’re essentially trading your coin at the market price at that particular time.

• Stop Orders: Stop orders are triggered when the market price reaches a specified level. They are used to limit losses or capture profits at predetermined price points in the volatile cryptocurrency market.

How Spot Trading Works

In cryptocurrency trading, there's the spot market where people trade coins. In this spot market, traders buy cryptocurrencies like Bitcoin (BTC) or other types and hang onto them, hoping they'll increase in value over time.

In the spot market, there are sellers, buyers, and order books. Sellers set prices for what they're selling, and buyers offer prices for what they want to buy. The highest price a buyer is willing to pay is called the bid price, and the lowest price a seller is willing to accept is called the ask price.

The order book shows these bids and asks on two sides: the ask side, where buyers want to buy, and the bid side, where sellers want to sell. For example, if a trader wants to buy ETH, his order shows up on the bid side. When a seller agrees to sell ETH at the same terms, the order is completed.

Below is the order book on WEEX.

Spot Trading vs Futures Trading

While spot trading allows you to trade your assets on the spot, at the current market price, futures trading involves entering into contracts to buy or sell assets at a predetermined price on a specified future date.

In addition to this, futures trading often involves the use of leverage, allowing traders to control a larger position with a small capital. With spot trading on the other hand, what you see is what you get.

Benefits of Spot Trading

There are different reasons why you should choose spot trading as a beginner. Some of them include:

• Accessibility: Spot trading is available on almost all cryptocurrency trading platforms including decentralized exchanges and centralized exchanges, as it is the core of crypto trading. This means that spot trading is easily accessible for anybody.

• Transparency and simplicity: Spot trading is as simple as it gets. There is no complicated process and theory that you need to understand. You simply swap a coin for another at the current market rate or set a desired rate and wait for the order to be executed.

In addition to this, prices depend solely on the market demand and supply, ensuring price transparency.

• Low risk: Compared to other types of trading, spot trading has a lower risk. With spot trading, you can set an order and forget about it. It’s simply going to be executed when the market hits your set price, or the order is going to remain unexecuted until you cancel it.

You don’t have to continuously worry about being liquidated. Although it is important to note that every type of trading comes with its own risk.

Risks of Spot Trading

• Market volatility: The crypto market is known for its volatility. So, even though spot trading is relatively low risk, it’s still subject to the general market volatility. So, ensure that you have a strategy to avoid losing a major part of your capital.

• Liquidity squeeze: In order to trade a token pair, there must be a liquidity pool on the exchange. If the liquidity of an asset is little, it might be difficult to swap it, or you might face a high slippage. To avoid this, make sure the exchange you’re trading on has a high liquidity for your trading pair.

• Platform choice: When spot trading, you should meticulously choose what platform to trade on. Historically, some centralized exchanges have gone bankrupt and users were unable to withdraw their assets. So, it is important to pick a secure exchange.

At WEEX, we ensure that our users’ assets are safe with our Protection Fund. WEEX Protection Fund is  a reserve fund of 1,000 BTC to safeguard all user assets and create a secure environment. So, at every point in time, you know that you can withdraw your asset, come what may.

Getting Started with Spot Trading

Spot trading is pretty straightforward. Follow these steps to trade any coin of your choice.

1. Choose a reputable exchange

The first step to spot trading is to pick a reputable and trustworthy cryptocurrency exchange. This can be a decentralized or centralized exchange.

For this guide, we’ll be using WEEX. WEEX is one of the most secure cryptocurrency exchanges in the market right now.

1. Create an account and fund it

• Open the WEEX website or download the mobile app on Google Play Store or Apple Store.

• Click the Sign Up button.

• Provide the required information.

• A verification code will be sent to your email address. Copy this code from your inbox and input in the provided space.

• Congratulations, you now have a WEEX account. You can go ahead and complete your KYC verification.

1. Explore available trading pairs

The next step is to find the trading pair of your choice. This depends on the coin you have in your wallet and what you want to trade it for. For example, if you have USDT and want to trade it for BTC, search for the BTC/USDT trading pair. Below is where you’ll find the spot trading pairs on WEEX

For Market Order

• Select a trading pair and click on “Market Order” to trade at the current market price (also known as spot price). We’ll use BTC/USDT for this guide.

• Enter the total amount of USDT you want to trade for BTC. Then click “Buy BTC”

• To sell your BTC, enter the total amount of BTC you want to trade for USDT. Then click “Sell BTC”

For Limit Order

• Select a trading pair. We’ll use BTC/USDT for this guide.

• To trade at a specific price (Also known as the limit price), select Limit Order.

• Specify the price at which you want the trade to be executed.

• Enter the total amount of BTC you want to buy. Then click “Buy BTC”

• To sell your BTC, enter the total amount of BTC you want to sell. Then click “Sell BTC”

• Wait for the trade to be executed when the market hits the specified price.

And that’s it! You’ve done your first spot trading transaction.

How To Profit From Spot Trading

Even though spot trading is basically swapping one coin for another at the market rate, there are ways to profit from it.

First is buying low and selling high. Note that you have to be particular about taking profit. Otherwise, the price can swing in the opposite direction and you’ll lose your profit.

Tips For Crypto Trading

• Exercise Caution in Financial Trading

Similar to traditional financial assets, cryptocurrencies carry both profit potential and risks of losses. The crypto market's volatility underscores the importance of prudent investment practices. It is advisable to allocate funds for trading that you can afford to lose.

• Beware of FOMO

The widespread adoption of cryptocurrency trading has made it a global phenomenon. However, succumbing to the fear of missing out (FOMO) can lead to impulsive decisions and financial setbacks. It's crucial to resist the urge to follow the crowd and refrain from trading under pressure.

• Stay Informed About Cryptocurrencies

The cryptocurrency landscape undergoes constant evolution, introducing new dimensions to trading. Keeping abreast of industry developments is essential for successful investments. Utilize social media platforms like Twitter, Facebook, and Telegram, along with reputable news sources, to stay informed. Adapt your investment strategies in response to market dynamics to maximize profitability.

Conclusion

Spot trading is the starting point for beginners and it is pretty straightforward and easy to understand. It is the easiest way to swap one coin for another without having to worry about different factors, as you’re swapping at the current market price or a specified price.

If you’re just getting started in crypto trading, sign up for a WEEX account to start spot trading. The user interface and experience is as simple as it gets.

About WEEX

WEEX, a prominent player in the cryptocurrency exchange arena, stands as a beacon of innovation and reliability in the digital asset landscape. Founded with a vision to redefine the trading experience, WEEX offers users a comprehensive platform that prioritizes security, usability, and accessibility. With a diverse range of features and services, WEEX caters to the evolving needs of cryptocurrency traders worldwide. From spot trading to futures trading and beyond, WEEX provides traders with the tools and resources they need to navigate the dynamic markets with confidence and precision.

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Sign up for a WEEX account now: https://www.weex.com/en/welfare/register