Cryptocurrency trading is the trading or buying and selling of bitcoins and digital currencies for profit. The trader uses price charts, market news, and upcoming market events to make a profit.
According to the definition of Investopedia, when we talk about trading or trading in financial markets, we mean giving something (which can be money or currency, an asset, a commodity, a digital currency, or anything else) and taking something else.
Suppose someone buys bitcoin and sells it at a higher price in the hope of raising it in the future. He paid and bought bitcoins and will exchange bitcoins for money in the future.
The concept of trading in simple language
By definition, a bitcoin transaction means buying at a low price and selling at a high price. Unlike investing, which means holding bitcoins for a long time, the trader in the trade seeks to predict the price of bitcoins. To predict prices, you have to follow the news and events of this industry and deal with different charts. The trader needs a lot of time, capital, and effort to achieve trading skills.
Who is a trader?
A trader is a person who seeks to buy or sell any type of financial asset in the financial markets. This activity can be done by a person for himself, another person, or an organization. The main difference between a trader and an investor is the length of time a person maintains assets.
Investors have a long-term outlook, but traders are usually interested in short-term periods to take advantage of short-term trends. Traders make more trades in the same period than investors.
Traders in the cryptocurrency market refer to those who buy and sell and exchange various cryptocurrencies at intervals of one day to several months. But in the long run, investors are looking to keep cryptocurrencies in their wallets for one to several years.
What are the factors affecting the profit of cryptocurrency trading?
Among the various financial markets, the cryptocurrency market is the youngest and has attracted a lot of attention. Even those who are accustomed to traditional ways of investing, such as buying gold and housing. Contrary to many people’s beliefs, the issue of cryptocurrencies is not new and has been raised and even implemented since the official launch of Bitcoin.
Many cryptocurrencies were designed and launched before Bitcoin, and all of them soon went out of business due to their problems.
The biggest problem with cryptocurrencies before Bitcoin was the issue of double-spending. This means that the user could use the same amount of money multiple times with a little manipulation.
Fortunately, Bitcoin had a solution to this problem, and that was to use users within the network for security. As you probably know, no government agency or individual has control over the price of Bitcoin, and everything is monitored by miners within the network.
This issue has the greatest impact on cryptocurrency trading. Why the value of bitcoin is directly determined by the people who use it! So as long as people stand behind this currency code and use it, bitcoin will be worth it. But this is not a good thing for government financial institutions.
That is why they are always trying to indirectly affect the digital currency trade and greatly weaken this market;
Therefore, the factors that weaken the cryptocurrency market are:
- Opposition from governments, celebrities, and celebrities
- Hacking and attacking digital currency
- Rumors about cryptocurrencies
cryptocurrency trading
Digital currency trading refers to the proper use of their fluctuations, various news and events, and the use of exchange strategies to make a profit. The working tools of traders differ slightly from those of investors.
For example, they often use online exchanges to buy and sell digital currencies momentarily or convert them to each other, the location of their digital assets is different, and the risk of what they do is consequently higher.
Trading requires the analysis of digital currency prices over different periods, which requires learning the knowledge of technical analysis and using fundamental analysis so that the trader can identify the opportunities offered by the market.
There are different types of buying and selling digital currencies or trading. The point that must be observed in all of them is the main element of trading is to wait. Also, each of the different styles should be tested for an acceptable time to determine if it is useful or not.
However, prices do not always agree with your analysis. The key to success in trading is the high number of successes compared to failures. It should be noted that the right style of buying and selling is different for everyone. The important thing is to achieve the style in which you are successful.
The different types of trading methods are described below:
Immediate buying or selling or scalping
Scalping or buying and selling for immediate profit seeks to make a profit (albeit a very small profit) from the exchange of digital currency in a very short time. This type of trading can be done in minutes to hours.
For example, you buy an atrium for $ 500 and a few minutes later you sell it for $ 505. Then when the price goes down again, you buy it at $ 502 and sell it at $ 504. In such cases, you should keep your loss ratio very close to the price you have bought to be safe from potentially huge losses.
This type of digital currency exchange requires skill, focus, time, risk management, and a little luck; However, if you do it well, you will make a good profit in a short time.
Day Trading
Daily trading is something that can be understood from the word. This type of exchange is similar to the previous type, but instead of a few minutes, trades are made during the day. In these trades, you also use the loss limit, and usually, the profit you are looking for is a little more than scalping trades.
Because trading in the digital currency market is not limited to specific hours and takes place 24 hours a day, in another type of trading style called Intra-day Trading, according to the trader’s decision, trading can take more than one day.
Swing Trading
Swing trading takes place over longer periods. In this method, you take a position according to the relative price floor created. After buying an asset, you sell it all at once or gradually at a price that, in your analysis, is the relative price ceiling. The opposite is also true for sales positions.
Swing trades are usually made in intervals of a few days to a few weeks. This means that once you position yourself, you will see price fluctuations and you do not need to worry about it.
If you are good at technical analysis, for example, you can identify patterns well and identify support and resistance levels, swing trading is probably the best option. Digital currencies fluctuate widely, and a fluctuating trader seeks to find potential ceilings and floors to make the most of price waves.
Those who trade volatile usually have a very high justification for the result they get from the time they spend. Losses in this type of transaction are further away from the purchased price.
Position Trading
This type of trading is a more general view of volatile trading and is a version of trading in investing. In this trading style, you take the position of buying or selling and then you stay in it for weeks, months, and even years.
This is the simplest type of trading, but it has special rules.
Consider, for example, someone who has maintained his buying position since 2017, when Bitcoin was $ 1,000. Or someone who has remained in his selling position to the day when the price of Bitcoin reached $ 15,000. (At the time of this writing, the price of Bitcoin is about $ 5,000)
Positioning is very similar to investing, but it is not quite the same. The ultimate goal in this type of trading is to achieve significant profits in the long run.
Investment vs. Trading
Investing and trading are two different categories. Trading means taking a buying or selling position and making a profit from it. But investing means owning an asset that is a tool for storing value and aims to increase the value of the asset over time.
When people invest in bitcoins, it means that they do not intend to buy or sell and decide to keep their bitcoins in the long run. In other words, they believe that regardless of the ups and downs that occur along the way, the price of bitcoin will eventually rise. Usually, people invest in that digital currency because they believe in the technology, its approach, and the team behind the currency.
Warren Buffett
People like Warren Buffett are an investor. They buy shares in different companies. If you own a portion of the 500 largest American companies, you will not be looking to make a profit by increasing its value, but you will pursue its continued value growth in the long run.
Investors do not necessarily use the concept of a loss limit. For some reason, they form their investment in the first place, and as long as these reasons are true, they trust their investment.
They are the real keepers. They do not look at charts much, except when they want to increase their investment position. People looking to invest in digital currencies need to look more closely at the fundamentals of a project.
Those who want to invest in the market for several years should choose the right wallet (exchanges or hot wallets are by no means a good choice to keep digital currencies for several years) and after considering the various aspects of digital currencies that they intend to buy. They have to transfer them to their wallets.
Types of analysis methods Technical and fundamental analysis
Fundamental and technical analysis are two methods of assessing the value and price of an asset. Using such analyzes, a good perspective on the current and future condition of an asset can be obtained.
Can we predict the price of bitcoin?
The short answer to this question is no one can predict exactly what will happen to the price of bitcoin. However, some traders have identified specific patterns, methods, and rules that enable them to make a profit in the long run. No one can only make profitable trades; But the important thing is to be positive in the end, even if you are in the middle of a difficult path.
People use two methods to analyze the price of bitcoin (or anything that can be traded on it): technical analysis or fundamental analysis, which we will explain in the following.
Fundamental analysis
This analysis tries to determine the price of an asset in general. For example, in Bitcoin, with a fundamental analysis of the industry, relevant news and developments in the technical aspects of Bitcoin, such as the Lightning network, worldwide legislation, and any other news or topic that may affect Bitcoin, its price trend can be Predicted to some extent.
This method examines the value of bitcoin from a technology perspective (regardless of the current price) and examines the relevant external factors and tries to predict the price from this method. For example, according to such an analysis, the price is likely to fall if China decides to ban bitcoin.
Technical analysis
This type of analysis is an attempt to predict price by studying market statistics, ie price history, and trading volume. The trader tries to identify patterns and price trends and based on that he can infer what will happen to the price in the future.
“Regardless of what happens in the world, price movements provide you with concepts and content that can be used to predict asset prices and future movements,” says Technical Analysis.
Which method of analysis is more appropriate?
As we have said before, no one can predict the future; Fundamental analysis for a breakthrough in technology may erroneously predict a fall, and in the realm of technical analysis the chart does not always behave as it did in the past. There is no guarantee that an analysis will be accurate. However, the right combination of both methods is likely to work better.
Where to trade?
Choosing the right exchange to trade will play an important role in the success of your transactions
cryptocurrency trading or exchanging digital currencies is usually done in online exchanges or exchanges. There are several criteria for choosing a suitable exchange for trading, such as liquidity, high trading volume, number of currency pairs, and so on.
Most digital currency transactions now take place in centralized exchanges such as Binance, Quinbis, and Cracken, but decentralized exchanges have plenty of room to grow and eliminate some of the risks of centralized exchanges.
Depending on the buying and selling style you choose, you should keep your digital currencies in different wallets. For example, for someone who trades daily, the transfer from a cold wallet or hardware to an exchange account is troublesome and a large fee will be deducted. Therefore, this trader should be more careful in choosing an exchange to be able to keep it.
On the other hand, for someone who trades on a monthly or annual basis, the risk of being kept in an exchange office will naturally be greater than the cost of the fee deducted from him during transfers. In any case, the cost-benefit of the trader to keep his assets determines the place of storage of digital assets which can be different for each person.
Trading as a job
When entering traditional financial markets, you may encounter various obstacles, but in the digital currency market, everything is done online. This is why many see it as an opportunity. Also, hearing that the digital currency market offers amazing profitability opportunities to traders has led to the emergence of trading as a job.
However, looking at trading as a job is risky. Lack of fixed income in trading and the possibility of losing capital in case of insufficient trading experience is one of the risks in choosing to trade as a job. Also, the ability to operate at any time and under any circumstances is one of the advantages of trading digital currency. Accordingly, having experience and skills is required to choose to trade as the main job.
Why do we need a strategy for trading?
Suppose you are going to buy or sell an asset that you have been monitoring for days, how would you feel if it were possible for a notification to be displayed on your mobile phone at the appropriate time? This feeling is exactly what should encourage you to have a strategy.
The ultimate goal of a trading strategy is to let you know the exact time of the buy or sell.
A simple trading strategy consists of the following parameters:
Risk:
How much loss you are going to control and manage in buying and selling.
Price:
The price at which the transaction is to be made.
Amount: The amount of capital that will be in the transaction.
Enter the transaction:
According to the strategy, buying or selling at a predetermined price should be done.
Withdrawal:
The strategy determines the time of withdrawal based on the outcome of the transaction. Before building and implementing your strategy, you must first know in what market you want to buy and sell and choose your target market.
In the meantime, you do not have to start from scratch, but you can follow a general strategy based on different categories. There are many strategies to choose from.
It is important to optimize this strategy to always be profitable, even on new data. Once you have a trading system, you should consider setting up a risk management system.
Risk management includes pre-and post-transaction reviews in the algorithm to determine reasonable stop loss or optimal capital allocation. Efficient and appropriate risk management prevents catastrophic losses.
Stan Weinstein, author of The Secrets to Making a Profit in Uptrends, said:
Fear makes you think irrationally and sell your property at the lowest price, and it stimulates your greed to buy close to the highest price. These are the motivating factors behind your mind.
Familiarity with trading terms
Here are some of the terms and concepts we encounter in most bitcoin and digital currency transactions.
Bitcoin trading platform, brokerage, and markets
Bitcoin trading platforms are websites where vendor and buyer orders are automatically matched. It should be noted that a trading platform is different from a Bitcoin brokerage.
Unlike trading platforms, brokers sell bitcoins to you directly, usually at a higher fee. Trading platforms are also different from bitcoin markets. In a bitcoin market, the buyer and the seller are in direct contact with each other and there is no intermediary between them.
The Order Books
The complete list of buy and sell orders is recorded in a list called the Order Book. This list consists of two parts, “Bids” and “Ask”. Purchase orders on a trading platform are called “Bid”; Because in such orders, the buyer offers a price to buy an asset. Sales orders are also called “Ask” and in them, the seller demands a certain price to sell his property.
Bitcoin Price
When people check the price of Bitcoin, they see the latest trading price on the relevant trading platform. Because there is no specific institution for determining the price of bitcoin, different platforms have different prices for this digital currency.
For example, the dollar price of bitcoin in some countries may be slightly different from the price of bitcoin in the United States; Because transactions in such countries have a different shape and image, and on the other hand, it is also affected by the current currency price of that country.
Sometimes we see the words “highest” and “lowest” in the prices, which means the highest and lowest price of bitcoin in the last 24 hours.
Cattle and bear markets
These terms are used for the general trend of the market when it is bullish or bullish. The reason for using the names of these animals in this market is due to the type of attack they have during the fight;
The cow throws its horns upwards and the bear lowers its paws on the attacker when attacking. So these animals are metaphors for market trends. If the market trend is upward, in the term of the bull market, and if the market is down, it is the bear market.
Trading volume (Volume)
Trading volume is the total number of bitcoins traded in a given time frame (usually the last 24 hours). Trading volume helps the trader to understand the importance of a trend. Important trends are usually accompanied by large trading volumes, while weak trends will have small trading volumes.
For example, a healthy uptrend is associated with an increase in trading volume when prices rise and a decrease in trading volume when prices fall. Experts recommend that if you see a sudden change in price direction, first estimate the trading volume. In this case, you will understand that this sudden change is a simple correction in the market or a seal of approval on the change in the market trend.
Market Order
Instant orders or market orders can be set on the trading platform. In such an order, the transaction is done quickly at any possible price. You only put the number of bitcoins you want to sell or buy in your order, then you do the exchange quickly. After all these steps, the trading platform matches the buyer and seller order.
Most likely, when an instant order is placed, the order of one seller or buyer will not match, but several people will want to trade at different prices.
For example, you place an instant order to buy 5 bitcoins at an exchange. The trading platform is looking for the cheapest seller available.
Your order will be completed when there is enough dealer to complete 5 bitcoins. Depending on the price of the available vendors, the first 3 bitcoins may be traded from one vendor and the next 2 bitcoins from a higher-priced vendor.
In other words, in an instant order, you continue to buy and sell until the desired result is achieved. The point to keep in mind when placing instant orders is that there is a possibility that you will make your purchase at a price higher than the desired price or otherwise sell your assets at a price lower than the asking price.
Limit Order
This type of order registration gives you the ability to buy or sell bitcoin at a certain price. On the other hand, there is a possibility that orders will never be completed; Because there are not enough buyers or sellers to match your request.
Let us explain the concept of limit order with an example:
Suppose you place an order for the sale of 5 bitcoins for $ 10,000 in a limited order exchange. It is possible that 4 bitcoins will be completed by buyers at this price and there will be no final purchase for the last bitcoin and your limit order will remain unfinished for a long time as long as there is one bitcoin for a customer worth $ 10,000.
Stop-loss Order
This type of order gives you the ability to sell that currency with the least loss if you have currency in exchange and its price has dropped dramatically in the future.
This order tells the trading platform that if the price of bitcoin drops a certain percentage and reaches a certain amount, I will sell bitcoins at a certain price level; Therefore, with this method, the damage is minimized. When the price reaches the amount of the loss limit that you have set in advance, your order will be placed in the exchange office like the limit order.
In other words, after the price reaches the pre-determined loss level, the trading platform will start selling your currency.
Maker and Taker
Another term you may encounter when trading is buyer and seller fees, which are perhaps the most confusing terms in the field of trading.
Exchanges want to encourage people to trade.
In other words, an exchange tends to make the trader act as a “market maker” or customer. So you create every buy and sell order in an exchange that does not match any buyers or sellers, for example, in a limited order you are the one who plays the role of the customer and therefore you will pay less commission.
On the other hand, there is the ordering party, for example, who places an instant order at an exchange office, which is completed quickly; Because he has placed a custom customer before him that matches his order. Acceptors usually reduce exchange orders, so they have a higher fee than customers.
It is better to explain these concepts with an example, imagine you are going to buy a bitcoin for 10 thousand dollars, but the lowest price in the exchange is 11 thousand dollars, so you have the role of the customer because a new order in the exchange Created that can be matched with a potential buyer.
Instead, imagine placing an order limit for buying bitcoins for $ 11.5 thousand at an exchange office, but the minimum selling price is $ 11,000, so your order will be processed quickly and you will have the role of accepting the order since You reduce the options available at the exchange and pay a higher fee.
Basic concepts in price charts
In the following, you will become more familiar with the principles of chart reading and introduce the basic concepts of price charts.
Japanese candlesticks
Japanese candlesticks are one of the most widely used types of technical analysis charts. Candlesticks are based on a method first used by the Japanese to trade rice in the 17th century.
Each candlestick indicates the starting price, the lowest price, the closing price, and the highest price in a certain period. For this reason, Japanese candlesticks are sometimes called acronyms (OHLC).
These acronyms represent the words “Open”, “Highest”, “Lowest” and “Close”, respectively.
Specifications of each descending and ascending candlestick
Depending on the red or green of each candle, it can be said that the price at the beginning of the time frame was higher or lower than when it closed. If the candle is green, it means that the price is higher than the starting price; So during this time, the price has gone up.
On the other hand, if the candlestick is red, it means that the price is lower at the time of closing than at the beginning of the trade; As a result, prices have fallen.
Support and Resistance levels
Often, when we look at Kendall charts, we find that the price can not go up or down some levels. For example, at the end of 2017, we saw that the price of Bitcoin reached $ 20,000 and then hit a hypothetical “ceiling” and remained below this price level for some time.
In this scenario, the price of $ 20,000 formed a resistance level that Bitcoin tried to break. Creating resistance levels can be attributed to a large number of sales orders; Therefore, the price does not break the specific price.
The support level means exactly the opposite of the resistance level. Like the “floor”, the price remains the same as bitcoin does not fall below the price. The support level will be accompanied by a large number of purchase orders. High buying demand at the support level will stop the price from falling.
If the price does not break the levels of support and resistance repeatedly, it can be said that the asset in these figures has strong support or resistance.
The interesting thing is that most levels of support and numerical resistance are rand; Like the prices of 10 thousand or 15 thousand dollars. This is because many inexperienced traders tend to place their buy or sell orders at rand prices; Therefore, resistance and support levels are formed at such prices.
Psychological issues also play an important role in determining levels of support and resistance. For example, until 2017, the price of a thousand dollars was considered expensive for bitcoin, but after the failure of this level, the next psychological resistance formed at the level of 10 thousand dollars.
Fear of losing (FOMO)
Another term for digital currency trading is FOMO. FOMO is the feeling that investors rush to buy an asset when they are afraid of losing an opportunity. Because there are so many emotions involved, FOMO can lead to price volatility for a large number of people.
The movement of FOMO investors from one asset to another can often indicate the next steps in a bull market. It is worth noting that severe market conditions can change the usual rules of the markets. When emotions become commonplace, many investors enter positions because of FOMO.
This can lead to widespread movement in both directions and may trap many traders who try to trade with this population.
HOLD
HODL is one of the terms of digital currency trading, which is derived from a misspelling of the word “hold” meaning to hold. This term is equivalent to the strategy of buying and maintaining digital currency.
HODL originally appeared in 2013 in a post on the BitcoinTalk forum. The term was a misspelling in the title of the post: “I AM HOLDING”
HODLing refers to holding investments despite falling prices. Also, the term is commonly used in the context of investors (handlers) who are not skilled in short-term trading but want to make a profit from investing in digital currency.
It may also be used by investors who have a strong belief in a particular coin and want to maintain their investment for a longer period.
HODLing strategy is similar to the buying and holding strategy of investing in traditional markets. In this strategy, investors try to find low-value assets and keep them for a long time. Many investors adopt this strategy for Bitcoin.
Highest recorded price ever (ATH)
We probably do not need to explain this one. ATH is one of the terms of digital currency trading, which means the highest price of an asset ever recorded. For example, the ATH of Bitcoin was in the BTC / USDT trading pair at the Binance 1978/86 exchange during the 2017 bull market.
This means that this was the highest price at which Bitcoin was traded in the market. One of the attractive aspects of an asset reaching its highest price point is that almost everyone who has ever bought will benefit. If an asset has been in the bear market for a long time, many losing traders are likely to want to exit the market when they reach a bearish position.
However, if the asset crosses its ATH, there are no sellers left waiting to exit the market. This is why some refer to ATH failure as “breaking the blue sky” because there are not necessarily areas of obvious resistance ahead.
Defeat ATH
The failure of ATH is also often accompanied by an increase in trading volume. Why? Daily traders may also take advantage of market orders to make a quick profit and sell at a higher price.
Does the failure of ATH mean that prices will rise forever? of course not. Traders and investors will sometimes look for for-profit and may set limited orders at certain price levels. This is especially true if the price ceiling is broken several times.
The lowest price ever recorded (ATL)
The opposite of ATH is the lowest recorded price (ATL), the lowest price of an asset ever recorded. For example, the lowest BNB price ever in the BNB / USDT trading pair was 0.5 USDT on the first trading day.
Breaking the lowest price of an asset can have the same effect as breaking the price ceiling but in the opposite direction. Many orders may be stopped by breaking the previous lowest price, leading to a sharp downward movement.
Market value may continue to fall as there is no recorded price below the lowest price. And since there is not necessarily a logical point to stop it, buying in such situations is very risky.
Many traders are waiting for the trend confirmed by an important moving average or another indicator to enter a long position. Otherwise, they may find themselves in a situation where they fall more and more.
Common Mistakes in Trading
Always remember that trading is risky and any mistake will lead to a loss of money and capital. Therefore, before starting our trading, we review the common mistakes in trading so that you can understand them and not repeat them.
Mistake one: Risking too much
The biggest mistake you can make in trading is risking the capital that you can not afford to lose. So first look at the amount you are going to trade. In the worst case, you will lose all this amount. If you enter more than this amount in your trades, stop it!
Trading is a very dangerous job. If you trade more money than you can afford, it will affect your trading and you may make the wrong decision.
The second mistake: not having a plan
Mistake two: a clear plan
Another mistake that people make when shopping is not having a clear plan that is seriously set. In other words, people do not know why they entered into a particular transaction and, most importantly, when they should exit the transaction. Therefore, before entering into a transaction, you must specify a goal for-profit and a loss limit.
Mistake Three: Keeping money in an exchange
This mistake is one of the most fundamental rules for any trader in the world of digital currencies; Never keep money that you are not currently trading in an exchange office.
If your money is in exchange you have no control over it; If the exchange in question is hacked or becomes unavailable for any reason or stops operating, there is a possibility that you will lose money.
If you have a bitcoin in an exchange that you do not need for your transactions in the short term, transfer it to the bitcoin wallet immediately.
Number four: Surrender to fear and greed
Two examples of the main emotions that control the actions of many traders are fear and greed. Fear can take the form of early withdrawal; Because you may have read scattered news, heard rumors, or feared a sharp drop in prices (which may be corrected).
Mistake four: Another major emotion is greed, which is based on fear
This feeling is called Fear of Missing Out. When you are told that something big is on the way, you do not want to be left behind. Therefore, you may enter into a deal too soon or close your position too late.
Remember that most of the time, it is emotions that dominate our minds. So never say, “This will not happen to me”; Be aware of your fears and greed, and be sure to stick to the plan you had before starting the deal.
Mistake five: Repeat the mistake
Regardless of whether you are successful in a trade or not, you should always learn from your trades. No trader is always successful in all his trades, and no one can achieve consistent profitability and proper planning without losing money. It does not matter that all your transactions are necessarily profitable. Instead, it’s important to know if you have a new understanding of how to trade better.
The best popular cryptocurrency trading software
choose a suitable platform for the use and trading of cryptocurrencies
After Bitcoin made its way into the public mind as a monetary innovation, it was gradually able to offer all the functions of money while trying to eliminate the problems of physical money
In this regard, in a short period, the supply and demand of cryptocurrencies grew significantly, in which the need for a suitable platform for the use and trading of bitcoin and other cryptocurrencies was felt. It has been more than 13 years since Bitcoin was first traded on a platform, during which time more than 300 platforms have been created to provide services in the field of cryptocurrencies, making it a bit difficult for users to choose the right platform.
In this article, we intend to introduce some of the most important features of a suitable platform and review digital currency platforms that can be used by users.
Binance
According to the website ranking (Coinmarketcap), this exchange is in the first rank of digital currency exchanges with a volume of transactions of more than $ 5 billion per day. The high number of traders on this platform accelerates trading.
The fee for this platform is 0.1%, which will be reduced if you use the BNB token. Some believe that the digital currency market is being manipulated by Binance and that oscillation on this website is very difficult due to the control of many cryptocurrencies by bots and whales.
Coinex exchange
The coinex Exchange dates back to 2017 in Hong Kong and is based on the Bitcoin Cash Digital Currency (bch). The advantages of coin Cash software are:
Low fee: One of the main features of this exchange is its low and cost-effective transfer fee (0.1%).
Security: This exchange has one of the safest security systems that best protect your assets.
Convenient user interface: Simple and comfortable user interface of this program has attracted many users.
Fast deposit and withdrawal: Quinx allows you to deposit and withdraw currency in the shortest possible time.
Quick registration of orders: Simply register your purchase or sale order by entering the necessary information such as volume and price. You can also enter only the amount of currency and place the order automatically. In addition, it is possible to register conditional orders (stop-limit) in Queen Cash.
Leveraged transactions: The ability to trade bitcoin-dollar currency pairs in 2019 was added to this software.
Trading View
Trading View, with its various features, has one of the most famous and best digital currency trading software in the world. You can use this program with any level of knowledge and experience about digital currencies.
Some of these features are as follows:
Display of various currencies and assets: In this program, in addition to charts of different types of digital currencies, charts of other markets are also visible.
Different tools for analysis and trading: Using various and up-to-date trading view tools, perform the most accurate analyzes and share them with other people.
Find out about news and technical specifications: With a simple search, the latest news and information are provided to you separately.
Ability to connect to different brokerages: With Trading View, you can connect to any account you like and analyze directly through your account.
Ability to open a double account: Beginners should work with a double account first to practice and gain enough experience. Fortunately, this account is free on Trading View.
Coding capability: If you are interested in producing your tools, with this program you can add the indicator and digital currency robot you need to your account.
Bitmex
The reason for the popularity of this platform is receiving low wages, and the possibility of contract trading, and margin trading. In this platform, transactions are done only with bitcoin.
BitMEX fees are not very specific and will vary depending on the type of digital currency and the type of contract.
The lack of a dedicated application, as well as a complex user interface, are some of the drawbacks of Bitmex.
HitBTC
Simply by registering and you can easily start trading on this website. Trading Fiat currencies on this platform requires a rigorous and time-consuming authentication process. Fees range from $ 5 to $ 45, work with this complex website, and the speed of account withdrawals is almost slow.
Kucoin
The platform was created in 2017 and became famous after the introduction of cryptocurrencies whose ICO has been completed. Cocaine’s fee is also 0.1 percent. This exchange does not support Fiat currencies and it is possible to deposit only with cryptocurrencies.
There is no limit on the amount of deposit and withdrawal of capital on this platform.
DidEx
A prominent feature of the Didex platform is that it provides service to all users, regardless of nationality except US users. Features of this platform include transactions and withdrawals from the account (on a limited basis), without the need for authentication, as well as low fees.
In this platform, to protect the security and privacy of users, 90% of the user’s funds are kept offline. On this platform, various attractive investment packages are also offered to users. Other features of this platform include a payment gateway, dedicated application, p2p, and 24-hour support.
Didex also offers a $ 10 reward for new users who sign up and authenticate to the website at the beginning of their careers.
cryptocurrency wallet
Whether you are new to cryptocurrencies or an expert in this field, you know that in a decentralized world where everyone has to be their bank, you can not walk without a digital currency wallet!
Digital wallets are software or hardware that store your digital currencies. With the help of a digital wallet you can store or send digital assets; Like a bank account.
Why is it important for us to know wallets?
The main answer to this question is simple: if you do not know the wallets, you may lose your capital at any moment. As you have probably heard many times, in the world of digital currencies and blockchains, everyone’s responsibility is their own, and in this area, a small mistake can be your last mistake.
Another point is that the level of security of digital assets in different wallets is not the same; Because the possibilities and capabilities of digital wallets are gradually increasing and becoming more diverse with the growth and development of the Chinese blockchain and digital currencies.
Therefore, knowing the function and features of different types of wallets is as important and necessary as knowing the digital currency you intend to work with.
Also, due to the developments in this field, 13,000 different digital currencies are now traded in the market. So, if you do not know the wallets and do not know how to find the digital currency wallet you are looking for, you will face problems every time.
In addition, the function of wallets is not limited to storing digital currencies, and digital wallets also provide us with various other services such as transactions (decentralized exchanges) and equity.
In short, in a decentralized world, recognizing wallets is as important as having a bank account, and maybe in the future digital wallets will replace our bank accounts.
How does a digital currency wallet work?
You do not need to know how it works to work with a digital wallet, just as you do not need to be familiar with the infrastructure of the World Wide Web. Today, most wallets have a very simple and user-friendly design, and sending and receiving digital currency in them is as easy as sending and receiving a text message.
However, to have an idea of what is going on inside a wallet, we will go into some technical details.
From a technical point of view, when you make a transaction with a wallet, the wallet acts as an intermediary between you and the network and sends your request to the network.
In other words, the wallet sends this message to a network of thousands of computers (Chinese blockchain network): Subtract this amount from the balance and add it to someone else’s account.
Crypto wallets do not store digital currency. In fact, by sending digital currency like card-to-card, all that happens is the transfer of ownership of the money; The difference is that in banking operations, your balance is stored on the bank’s centralized computers, and in digital currency transfers, the balance is obtained on the Chinese block.
The best multi-valued wallets
A multi-valued wallet is a software that supports multiple digital currencies simultaneously. At the time of updating this article, the best multi-valued wallets are:
Trust Walt
We explained it above; The best multi-valued wallet is available as of the time this article is updated.
Exodus: Not as good as Walt Trust; But it has been operating in this space for a long time and is well known. It has software for both personal computers and mobile phones. Exodus supports 153 different digital currencies and is known for its attractive user interface.
Atomic Wallet
Like the well-known and old Exodus, it is installed on mobile phones and desktops. Atomic supports more than 300 digital currencies, and one of its special features is the possibility of exchanging digital currencies from within the program.
The importance of time in digital currency trading
Given the dramatic growth of digital currencies and the public’s willingness to buy bitcoin, the timing of digital currency transactions, especially bitcoin, is very important. One of the most important points in the analysis that unfortunately few professors mention is the issue of timing in the market.
Most market analysts pay much attention to the price element but do not pay much attention to the issue of time. This issue is also in the field of digital currency trading. According to studies, the beginning of the New York Stock Exchange opening hours has a greater impact on bitcoin price fluctuations than other stock markets.
According to experts, this is obvious because the markets are the gathering place of supply and demand forces and the largest volume. The power lies in supply and demand in the US financial markets.
The trading habits of bitcoin traders changed in 2020, but price fluctuations in this digital currency are still affected by the opening hours of the New York Stock Exchange.
Important times in cryptocurrency trading
Recent data show that the correlation between fluctuations in major digital currencies and fluctuations in US stock markets in the early hours of their inception is high. By comparing the data of the opening time of Asian and London markets, it can be seen that their impact on bitcoin price fluctuations has been less.
“Digital data also confirms this trend,” wrote Saka, a leading digital currency market trader, who released data on bitcoin price fluctuations at the CoinBase exchange. At 4 p.m., Greenwich Mean Time is currently the most volatile hour for Bitcoin trading. During the weekend, the market situation is more stable.
These data may indicate a change in the tendencies of bitcoin traders, which is probably due to the growing influence of various institutions in this market. Taking into account the average of 2017 to 2019, researchers say that Asian traders have a significant impact at this time.
Since then, with the entry of investors and large traders into the market, we have seen more competition between them. It is said that the volume of transactions in bitcoin derivatives markets in 2021 will set a new record.
Difference between digital currency trading hours and the stock market
The difference between digital currency trading hours and the stock market
Except for exchange breaks, digital currencies are traded all day and prices go up and down every second. But the stock market is not like that.
Trading around the world usually starts at 9:30 am and ends at 4 am. During these hours, traders can work on complex and scientific strategies to take advantage of the next day. On the other hand, in the digital currency market, traders need to be aware of the price of currencies every second, which can have a significant impact on their decision-making in their trades.
On the other hand, stock traders can go ahead with their trading plans and be less wary of price fluctuations. The digital currency market is active 24 hours a day, 7 days a week, while the stock market is 9 hours: It will open at 30 and close at 4 o’clock. Scholarships are also closed on weekends and public holidays.
When the stock market closes, prices will no longer fluctuate, but the price of digital currencies changes every second. Thus, price fluctuations in the digital currency market are greater than in the stock market.
The best time to trade Bitcoin
According to the data, the correlation between bitcoin fluctuations and US stock market fluctuations in the early hours of their operation is very high, and bitcoin fluctuations are much lower when the Asian and London markets reopen. According to data within the Skew chain, 4 o’clock Greenwich Mean Time is the most volatile hour of Bitcoin trading.
Get to know digital currencies well
The most important thing to know before entering the digital currency market is that it is very important to know the market as well as digital currencies. Each currency has different goals. The goals of a currency may be different from the goals you have in mind.
Therefore, you should try to have a relative knowledge of digital currencies in the first step. We suggest you visit online exchanges to start.
Research the nature of digital currency wallets and their types
One thing to keep in mind about entering the digital currency market is that not everything is limited to knowing digital currencies and how much you can invest. There are many things you need to be aware of.
A digital currency wallet is also one of the things that you should do thorough research on. The importance of choosing a digital currency wallet is so great that there is a possibility of losing capital due to the wrong choice! For example, if you want to buy or sell bitcoin, or any other digital currency such as Tetra, Atrium, Ripple, and more, you should look for a safe wallet. The credibility and security of the wallet guarantee the protection of your assets.
Learn digital currency market analysis
Technical and fundamental analysis is one of the most important things you should be aware of so that you can make more accurate predictions of digital currencies. Understanding the potential future of any digital currency in terms of price can be very important. Each investor decides to invest in that digital currency, given the potential for growth of a currency.
All this can be done with the help of market analysis. Professional investors and financial market participants spend most of their time analyzing charts and news and eventually venture into the market.
Choose the safest way to invest in digital currencies
The best way to invest in the digital currency market can be different for each person, but the important thing is that everyone should be aware of the security of their chosen way of investing.
It is recommended to carefully consider the types of investment methods such as mining, trading, and other methods of investing in the digital currency market and choose the option that best suits your needs.
To buy and sell digital currencies, go only to reputable exchange offices
If you choose to invest in buying and selling, you will likely encounter many contenders in the real and virtual world. Usually, these people can not be trusted. The best way to buy Binance coin, Tether, Ethereum, or any other digital currency and maintain capital security is to go to the most reputable exchanges to do business.
Introducing the top 10 cryptocurrency trading methods
Scalping
“Scalping”, also known as fluctuations in financial markets, can be a good and profitable strategy for trading in the digital currency market. Traders in the scalping strategy take advantage of momentary market fluctuations, and experts say that if you can implement scalping properly, you will make good profits in the digital currency market.
Simply put, in this method, you open a trade by identifying price fluctuations, and as soon as you receive a certain amount of profit, you leave the market. The profit from each transaction is very small. But since a large number of trades are closed in one day, the total profit received will be significant.
In general, the shorter the trading time frame, the better. The maximum time spent on a transaction is not more than one hour. Traders who use the scalping strategy do not seek high profits in every trade. What matters is the number of transactions. Of course, implementing a scalping strategy and fluctuating in the digital currency market is not an easy task at all.
You need to be familiar with market trends and structures to be able to identify the best time to enter and exit the market before other traders. It is interesting to note that some people even do their trading in a matter of seconds.
One of the main advantages of the scalping strategy is its very short trading frames. That way, if for any reason your analysis is wrong, the loss will be negligible and you can exit the market quickly. It can be said that traders have more control over market conditions using the scalping strategy.
Reverse trades
“Reverse trading”, also known as reverse trading among users, is one of the most profitable strategies in the digital currency market. For example, assuming that the Bitcoin price trend is upward over a while, traders in the reverse trading method, using specialized tools and examining different patterns, predict a downtrend and enter the trade quickly.
Some people manage their transactions and make a profit by predicting the highest and lowest prices of digital currencies. Of course, keep in mind that if you predict the trend incorrectly, you will suffer significant losses. So implementing a reverse trading strategy is only for experienced people who have enough information to operate in the digital currency market, because otherwise using reverse trading will not be profitable for you.
Traders act on this strategy based on the information they have about support and resistance levels. In general, when the price of digital currency is close to support levels, there is a possibility of a price increase.
On the other hand, when the digital currency is traded at a price close to the resistance levels, a downward trend is predicted. So it can be said that familiarity with the general structure of the market and considering the levels of support and resistance makes it easier for you to predict the price trend.
Momentum
Momentum trading is one of the simplest trading strategies in the digital currency market. In general, people riding the wave of price fluctuations make a profit in the momentum method.
Many experts consider momentum strategy to be a risky trading method because there is a possibility of changing trends and significant losses at any time.
It is interesting to know that trading volume is one of the most important and influential factors in momentum strategy. In this way, wave traders wait to leave the market as soon as the trading volume reaches a certain level.
But keep in mind that using the right indicator and analyzing the price trend correctly is not for everyone. This makes it difficult for those who do not have much experience in the digital currency market to determine the right time to exit trading.
Feeding
“Fading trading” is one of the strategies that is often used by experts and activists in the field of digital currencies. Of course, most people refer to it as a risky way to trade digital currencies. Traders in the feeding strategy identify and predict the opposite trend in the market.
Having enough information and correctly predicting the price trend in the feeding strategy will bring you significant benefits. But on the other hand, if you unknowingly think of implementing such a method, you will suffer irreparable damage.
So it is better to act prudently to avoid any possible damage. Feeding is more commonly used in volatile markets such as digital currencies. Paying attention to the news and views of prominent people such as Ilan Mask makes market analysis easier in the feeding method.
Daily oscillation
The volatile nature of the digital currency market offers you many trading opportunities daily. As volatility increases, we may see an upward or downward trend in prices at any time. Now you can make a good profit from market fluctuations by properly analyzing and identifying significant daily changes in the price trend and closing several trades in short timeframes.
In a volatility strategy, you do not predict the uptrend or downtrend of the price after the volatility, but you enter the trade when you see high volatility.
Buy at the lowest price and hold digital currency
Usually, the sudden drop in the price of a popular digital currency such as Bitcoin creates a feeling of fear in people’s hearts and causes them to refrain from buying and investing in Bitcoin. But people with experiences such as a sharp drop in prices see a good opportunity to enter the digital currency market and take full advantage of the situation.
In general, it can be said that the capability of digital currencies in the market is so high that nothing can stop their development in the long run. So factors such as the tweets of celebrities or the news of the ban on digital currencies in some countries only affect the price trend for a short period. None of the financial markets has ever experienced high fluctuations in the digital currency market.
experience of Bitcoin price
In addition to all that has been said, experience has shown that the price of bitcoin, even after falling by several thousand dollars, rises again so much that the investor’s losses are fully offset. Therefore, some traders identify and buy futures digital currencies when they see a downward trend in prices. Some digital currencies grow in just a few months, and people’s capital increases dramatically.
In general, the risk of identifying and investing in some digital currencies is lower than in other trading strategies. This is why people who do not have enough knowledge and experience to analyze price trends in short periods, use this method. You can also install software on your mobile phone or computer system that quickly notifies you of a sudden drop in price or a certain price.
It can be said that there are winners in the market who identify buying opportunities and enter the market faster than other people. In some cases, the price increase usually occurs only a few minutes after the sudden price drop. Traders automatically design digital currencies such as bitcoins as soon as they see a downward trend in the design of dedicated robots. Of course, the complex and volatile structure of the digital currency market has made it impossible for even experts in this field to provide a correct and accurate analysis of the situation.
Oscillation range
“Range trading” is more about support and resistance levels. According to experts, one of the requirements for implementing a swing range strategy is familiarity with candlestick patterns or candlestick charts. Concepts such as support and resistance levels are always used to predict price trends.
As the price of digital currencies such as bitcoin approaches support levels, traders enter the market and sell their assets as soon as they reach resistance levels. Of course, it is also possible that the price will remain at the same level or be accompanied by minor changes.
The volatility range can be a good strategy for new traders in the digital currency market. A large number of trades are made according to the levels of support and resistance in the market. As mentioned in the previous sections, the trend in the digital currency market is unpredictable because in some cases, the price has exceeded the support and resistance levels. But usually, before we see an upward and downward trend in prices, we see several levels of support and resistance.
High frequency or algorithmic transactions
“High-frequency trading” is known as one of the most complex strategies. However, it does bring significant benefits to digital currency operators. In general, in high-frequency transactions, the whole process is done automatically by specialized computers. Traders use specialized equipment to implement this strategy.
It is interesting to know that technology in today’s world has advanced so much that you can algorithm all the strategies discussed in this article and implement high-frequency transactions. Computers automatically trade by observing and analyzing market trends.
Advantage
The competitive advantage of high-frequency trading compared to other strategies is its very high speed, because even analysts with experience in the digital currency market look at several different factors to predict the price trend and then enter into trading. But the automatic operation of this strategy has caused all the steps to be done in just a few seconds. So traders have virtually no involvement.
Because everything is done quickly, the profit from each transaction is very small. But the high number of trades during a day makes the total profit received significant. You have to go through a lot of trial and error to use this trading method.
Achieving a reliable and profitable algorithm that works in the unpredictable world of digital currencies is not an easy task at all. It is better to weigh all the aspects correctly before choosing your trading strategy, for example, imagine when there is a system error on your computer and trades open at the wrong time intervals.
If you look at it logically, in addition to high profitability, this strategy is a risky way to operate in the financial markets.
Golden dots and the intersection of death
Some traders analyze the market trend and enter the trade by recognizing the “Golden Cross” and “Death Cross”. The term “golden dots” refers to the time when the average price of a currency in a short period exceeds its long-term average. The golden dots indicate an upward trend in the digital currency market. On the other hand, if the average price of a currency code such as Bitcoin is lower than its long-term average over a short period, the intersection of death has occurred.
In general, it can be said that the intersection of death is right in front of the golden points, because traders, seeing such an event, see a downward trend. The short-term average price trend is estimated at 50 days and the long-term average price trend is over 200 days. So you too can predict the price trend by using different indicators and identifying the golden points and the intersection of death.
Arbitrage
“Arbitrage” is also known as one of the ways to earn money in the digital currency market. In this way, traders earn money from the difference in the prices of exchange offices. In this way, they buy the desired digital currency from one exchange at a low price and sell it to another exchange at a higher price.
Therefore, one of the requirements of arbitrage can be considered the simultaneous review of prices in several exchanges. Of course, implementing and making a profit through a relatively simple arbitrage strategy has its difficulties. Thank you for following Digital Currency Signal till the end of this article.
resource:
https://www.stilt.com/blog/2021/06/how-to-make-money-with-cryptocurrency/
