Introduction
Cryptocurrency investors taking their first steps often prefer spot trading as a starting point over futures trading. Spot trading is one of the most basic and direct methods for buying and selling financial assets immediately.
Darkex Spot is an extremely user-friendly platform that allows users to easily buy and sell cryptocurrency assets with fast processing times and a secure transaction infrastructure. Darkex offers transparent pricing and a wide range of assets, making it ideal for both beginners and experienced investors.
In this article, we will cover the fundamentals of spot trading for beginners, detailing what it is and how to trade using this method.
What is Spot Trading?
Spot trading involves buying and selling assets at the current market price. This type of trading allows for direct and swift transactions without futures contracts or complex financial instruments. Spot trading is known for its low transaction fees and high transaction speeds.
Spot traders buy assets hoping their value will increase. They then hold these assets and sell them at a profit when prices rise.
The current market price of an asset is referred to as the spot price. On an exchange, you can quickly buy or sell your assets at the current best price using a market order. It is important to note that the market price can change during the order execution.
Spot prices are dynamic and updated in real-time, changing as orders are executed. Without an order book, you can directly set a fixed amount and price with another party. Delivery occurs within 2 business days, depending on the asset. These are known as over-the-counter (OTC) trades.
Understanding the advantages of spot trading and the differences between spot and futures trading will help you make better trading decisions.
Advantages of Spot Trading
Transparency
Provides the ability to trade at real-time market prices.
Low Fees
Spot trading generally has lower transaction fees compared to other trading types.
High Liquidity
High trading volume and liquidity enable fast buying and selling transactions.
In spot transactions, investors trade only with the capital they have, without using leverage, unlike futures trading.
Spot Trading vs. Futures Trading
Leverage is a feature in futures trading that allows investors to control a larger position with a smaller amount of capital. While leverage can increase potential profits, it also introduces higher risks compared to spot trading.
Futures Contracts
Futures contracts are agreements to buy or sell an asset at a future date. Long-term futures do not have a specific settlement date. Futures trading allows large-volume trades, which may increase potential gains but also carry greater risks.
Due to leverage, investors can open larger positions with less capital, but this significantly increases risk compared to spot trading.
How to Trade Cash Market on Darkex
Beginner’s Guide to Trading Cash Market
The process of trading spot on the Darkex platform is very simple.
Here are the basic steps:
Account Creation and Login
Before you start trading on the spot market, you’ll need to create an account on Darkex and complete the Know Your Customer (KYC) verification procedures.
Once your account is verified, simply log in to begin trading.
Further information on account opening and KYC verification is detailed below.
How to Complete Identity Verification on DarkEx ?
What is Identity Verification (KYC), How Is It Complete?
Choose Assets You’d Like to Co-Invest
Now choose the cryptocurrency assets you want to buy or sell.
Enter Orders
Place your buy or sell order for the selected assets. You may choose the order type depending on your strategy.
Confirm Orders
After you finish confirming your orders, the entire process is completed instantly on the platform.
Take a look at the guide on how to perform spot trading.
The key difference in this trading type for beginners entering the cryptocurrency market is that it carries lower risk.
Investors starting with spot trading generally have a more comfortable trading experience compared to those dealing with margin trading, mainly due to fast processing times.
Disclaimer
It is important to stay informed in the rapidly changing world of cryptocurrency to make well-informed trading decisions.
If you set your trading strategies and capital management properly, you can expect to enjoy a rewarding trading experience on Darkex.
