Market foundations
Understand what moves crypto markets before you risk capital.
01
Start with your role
An investor builds a longer-term thesis. A trader manages a defined setup over a shorter horizon. A speculator accepts that the outcome is highly uncertain. Problems begin when someone enters as a trader, removes their stop and quietly becomes a long-term investor. Define the role before the order.
02
Spot and derivatives are different tools
Spot ownership gives direct exposure to the asset. A derivative tracks its price and may introduce leverage, funding costs and liquidation risk. Leverage does not improve a weak idea—it only magnifies the result. New traders should learn execution and risk on spot or a simulator before considering leverage.
03
Price is an auction
Every candle records a contest between buyers and sellers. Instead of predicting every movement, identify where demand previously absorbed supply, where sellers took control and whether price is making higher highs, lower lows or moving sideways.
Practice exercise
Write down whether your next planned position is an investment or a trade, its intended duration, and the exact event that would prove your idea wrong.
Knowledge check
What is the main danger of using leverage?
Leverage magnifies both gains and losses and can force a position to close before a longer-term idea has time to work.
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