Information that 99% of New Crypto Traders Have Missed
First of all, it is important to know the difference between investing and trading. Like in the case of bitcoin. Bitcoin trading is the act of buying low and selling high; an investor, on the other hand, would hold the bitcoin for a period of time waiting for it to rise in value as they study the market.
To trade successfully, one needs to be patient and have time, money and energy because it requires a lot before you can be any good at it.
Trading Types
Now after you have grasped the difference between trades and investment, it is important to know the trading types. While the ultimate goal is the same for all traders the journey there will vary.
The most common trading types include:
✔ Day Trading: This involves multiple trades during the day and trying to profit from short term price movements. The trade is usually closed by the end of each day.
✔ Scalping: This is a day trading strategy based on the idea that making small profit consistently reduces risk and gives traders an advantage. It attempts to make considerable profit on small price changes.
✔ Swing trading: This type of trade leans into the natural swing of the price cycles. Traders identify the beginning of a price movement and enter the trade then. They hold on until the movement dies out and take profit the profit.
Analysis Methods
There are two main methods when it comes to analyzing cryptocurrencies: Fundamental Analysis and Technical Analysis. It should, however, be taken into account that none of them are exclusively profitable but eventually there will be some positive balance despite a few losses.
👉 Fundamental Analysis
This methodology looks considers the grand scheme of things. It is globally analyzing the coin and the trends that might affect its price. These could be regulations, outside players, technical developments and so on.
👉 Technical Analysis
This analysis involves looking at patterns by studying statistics, such as volume of trade and past price movements. Using that to predict what could happen to the price.
There are no guarantees with either of them but a blend of both methods could affect your chances positively.
Know the meaning of different Trading Terms
🔺 Trading Platform — online sites where buyers and sellers are automatically matched.
🔺 Broker — A person who sells you cryptographic coins directly but at a higher fee.
🔺 Marketplace — Where buyers and sellers communicate in order to complete a trade.
🔺 Order book — Usually viewed on a trading platform, contains the complete list of bids and asks. Bids are the buy orders because people bid on the coins ask are the sell orders because they show asking price.
🔺 Volume — The number of coins that have been traded in a given period of time. High volumes mean important trends low volumes mean weak trends.
Conclusion
These barely scratch the surface there are many other terms you will need to be familiar with, market order, limit order and so on. But you have to start somewhere and like any other partaking to successfully trade, you need to give your time, money and energy. You will only get good at it if you keep at it.
