The mechanics of buying, selling, and safely holding crypto.
What you will learn
Understand spot trading mechanics
Compare wallet types
Master key management discipline
Reading price action
Reading price action
Keys and custody
Keys and custody
Spot trading basics
Spot trading is buying or selling the actual asset for immediate delivery — you own what you buy. It's the simplest trade: you go long (buy hoping price rises) or, with borrowing, short (betting on a fall). Most beginners should master spot before touching leverage.
💡 A spot trade
You buy 0.1 BTC at $60,000, spending $6,000. You now own 0.1 BTC. If BTC hits $66,000, your position is worth $6,600 — a $600 gain. You can hold it in your own wallet. No liquidation, no interest — just ownership.
Wallet types
Hot wallets (apps, browser) are connected to the internet — convenient but exposed. Cold wallets (hardware, paper) are offline — secure but less convenient. Custodial wallets (on exchanges) are managed by others. The right mix depends on amount and frequency of use.
Key management is the whole game
Every story of lost crypto is a key-management failure. The discipline: one offline copy of your seed, never digital, never shared, protected from fire and theft. A $10 hardware wallet protecting $100,000 is the best insurance in the market.
💡 The $1M lesson
People have lost fortunes to a single screenshot or a phishing site that asked for a seed phrase. No legitimate service ever asks for your seed. Internalize this: the moment someone asks for your seed phrase, it's a scam — full stop.
Position sizing from day one
Even in spot, decide the size before you click. A common beginner error is going all-in on one asset. Position sizing (how much per trade, how much per asset) is a skill you'll formalize later — but the habit starts now.
❓ Quick check
In spot trading you:
A) Borrow to trade
B) Buy and own the actual asset
C) Only short
D) Trade futures
Spot = own the underlying asset.
(Knowledge check — full exam is next)
Key takeaways
Spot = buy and own the asset; master it before leverage
Hot = convenience, cold = security; match wallet to amount
Never share your seed phrase — key management is everything
📝 Weekly Exam — pass with 80% to unlock next week
10 questions. Review the Deep Dive and courses before attempting.
1. Spot trading means you:
Spot = ownership.
2. You buy 0.1 BTC at $60k. BTC rises to $66k. Your gain is:
0.1 × (66k−60k) = $600.
3. A hot wallet is:
Hot = online, convenient.
4. A cold wallet is:
Cold = offline, secure.
5. The #1 cause of lost crypto is:
People lose keys or share them.
6. A legitimate service will ___ your seed phrase:
No legit service asks for your seed.
7. The best protection for large holdings is:
Cold storage for large amounts.
8. Position sizing means:
Size is a decision, not an afterthought.
9. The first thing a beginner should master is:
Walk before leverage.
10. Your seed phrase should be stored:
Offline physical storage only.
Your score: —
🛠 Weekly Project
Execute (or paper-trade) one disciplined spot trade.
1
Pick an asset and decide a position size first (e.g., 2% of a demo balance).
2
Use the Practice trader to execute a simulated spot buy.
3
Record your entry, and set a target and a stop in your journal.
4
Write 2 sentences on how sizing first changed your process.