After this guide you can
- Distinguish spot purchases from perpetual contracts
- Understand supply, liquidity and custody risks
- Size positions without relying on leverage
What does the token do and how does supply change?
Before the chart, investigate network or project utility, issuance and major holders. Market capitalisation usually multiplies price by circulating supply; fully diluted value assumes a larger supply base. Definitions vary between sources, so check project documentation.
Unlocks can change tradable supply without causing immediate sale of all released tokens. Consider dates, recipients and market depth together. A very low unit price does not establish that the whole project is cheap.
Spot purchases differ from perpetual contracts
Spot involves ownership and withdrawal access; derivatives provide contractual price exposure. Perpetuals can involve periodic funding payments. Direction and size vary, so longer holding can generate either costs or receipts.
Last trade, index and mark prices may differ. Some platforms use mark prices for liquidation calculations. Maintenance margin, fees, margin mode and balance changes mean “one divided by leverage” does not give an exact liquidation distance.
Order depth and custody risk
Reported volume alone does not prove liquidity quality. Check bid/ask spread, nearby order depth and slippage for the intended quantity. Round-the-clock trading does not mean equal depth every hour or uninterrupted withdrawals; technical failures and withdrawal suspensions can occur.
Platform custody adds counterparty risk; self-custody transfers responsibility for keys and recovery phrases to the holder. Never send a one-time password or recovery phrase to support. Transfers on the wrong network or to a wrong address may be irreversible; match the network and destination.
Separate the trade scenario from the narrative
A popular project narrative does not replace entry and exit planning. Record invalidation, size and holding period before ordering. If several assets depend on one market wave, calculate their shared risk too.
Do not automatically equate a stablecoin with bank cash: reserves, redemption and depeg risks differ. Evaluate results in account currency and relative to collateral assets; volatile collateral can fall simultaneously with the position.
Educational calculation · hypothetical numbers
Bitcoin quantity with a hypothetical stop
Teaching-only entry is 60,000 dollars, stop 58,800 and example loss budget 60 dollars. Assume a linear dollar-denominated instrument.
| Step | Result and interpretation |
|---|---|
| Stop distance | 1,200 dollars per bitcoin |
| Quantity before costs | 60 ÷ 1,200 = 0.05 bitcoin |
| Position notional | 0.05 × 60,000 = 3,000 dollars |
| Initial margin at a simple assumed 5× leverage | About 600 dollars; this is not a loss ceiling |
This excludes commission, funding and slippage. The simple formula is insufficient for inverse contracts or crypto collateral. Prices are not current and the leverage is not a recommendation.
Before submitting an order
- I read token structure, supply and unlock events.
- Spot versus derivative status and funding costs are clear.
- I understand mark, margin and liquidation rules.
- I reviewed account security, custody and collateral risk.
Mistakes to recognise
- Choosing high leverage to compensate for a small account.
- Assuming sufficient liquidity from reported volume alone.
- Confusing a stablecoin’s target price with guaranteed value.
Check your understanding
If position margin is 600 dollars, is planned loss necessarily 600 dollars too?
Show answer and reasoning
No. Margin concerns collateral and contract rules. Scenario loss depends on price change, quantity, costs and exit execution; liquidation is not the plan’s desired exit.
Key terms
- Funding
- Periodic payments between perpetual-contract sides under product rules.
- Mark price
- A calculated reference price used for some valuations and platform risk controls.
- Self-custody
- The holder controls asset keys and is responsible for protecting them.
For further reading
This guide was independently written. The official sources below support further study of the concepts; product rules and local regulations may differ.
This guide is educational, not a personal buy or sell recommendation. Examples do not establish specifications of products offered by CAPITEX.