Types of Trading

                       Types of Crypto Trading

 There are three types of trading in cryptocurrency. Let's discuss one by one here below;

1- Spot trading

Spot trading is the process of buying and selling digital assets  in real-time. In another words if you have $100 and you buy BTC for that $100 and receive the coins for  exact worth $100 this is spot trading

2- Scalping

Scalping is a simple day to day trading ,these are short term trades where your  goal is to book as much profit as you can daily. Scalping is popular in cryptocurrency trading because the market is volatile and moves quickly

3- Future trading 

Future Trading is an agreement to buy or sell an asset at a later date for a fixed price

They are typically used by traders  to lock in profits when trading in volatile markets. 


Types of Future Trading?

A) Isolated
When a trader places an isolated margin trade, the initial margin used to open the position is kept separate from the available balance and other open positions. By opening isolated margin trades, traders have more control over managing individual positions as compared to the cross margin method. The isolated margin option is useful when opening speculative positions as the maximum amount a trader will lose is limited to the initial margin placed and does not tap into a trader’s available funds.  On the other hand, an isolated margin position with high leverage can be automatically liquidated, even with a slight movement in an asset price. 

B) Cross Margin
 A cross margin position taps into all available funds in a trader’s account balance or wallet. Please note, any unrealised profits from other open positions are not counted towards available funds The cross margin position is liquidated once the trader’s available account balance falls below the maintenance margin. On the other hand, using the cross margin mode offers traders have less control over managing their funds. And sometimes traders lose all their money from their wallet in cross margin position.


C) Margin trading 

Margin trading is also a kind of future Trading. It allows users to borrow funds from their exchanges to access greater capital, and leverage their positions. It amplifies trading results, so traders can make a higher profit from their trades, without having to invest more capital
Leverage is the amount that your buying power has been amplified to. You have seen that various exchanges offer 2x, 5x and 10x leverages to its users. These leverages are actually used in future trading. if you have $100 and leverage is 2x, it means  your buying power is $200. Various exchanges have fixed percentages on leverages either you use that $100 or not you will have to pay leverage on that $100. An Exchange will take its profit automatically it yo are in profit and remaining balance will be automatically transferred into your account or wallet. If you are loosing the trade then an exchange will get its leverage amount (like $100) and its fee while it will let your money go to liquidation.