Hello professor @lenonmc21, I'm glad to partake in your lecture. Here's my homework post. I hope you like it.
1. Define in your own words what trading is, what its function is and how it relates to the cryptocurrency market.
Trading
So an individual sells a good or service to another person who in turn buys the good by giving another good or service in return. When this happens you say they have traded because they made an exchange.
With this one can make a lot of profit from buying and selling cryptocurrencies. This is done basically by buying an asset at a low price and selling when the price increases.
2. Define and explain what are the tools used for trading ( Technical Analysis and Fundamental Analysis ) and at least one example of each. ( A screenshot is required ).
Tools for Trading
Trading is a double edged sword. It can make you very happy and very sad depending on whether you make huge profits or losses. To fall on the happy side almost all the time you need tools to help support you. The main problem or issue with trading is the identification of the right points to take either buy or sell positions. With the use of tools you can be able to predict price increase and decrease and then find the right points to make entries.
- Fundamental Analysis
Fundamental analysis involves the study of the factors that can affect the value of an asset. This analysis helps to determine the the real market value of an asset.
Analysts typically study, in order, the overall state of the economy and then the strength of the specific industry before concentrating on individual company performance to arrive at a fair market value for the stock. source
Fundamental analysis involves the study of the management of the asset. Checking their road map, objectives and achievements, how serious the mangement is and also the state of the economy the organization of company can be found in all form part of fundamental analysis. This helps to know whether the current market price of the asset is less than the real price estimate. With this, one can take a buy position and make profit when the price of the asset rises if they notice the real value of the asset is less than the current market price.
You can do fundamental analysis by visiting the official website of the asset and reading about the managements and checking their progress. You can also read news from the internet about the asset.
Fortunately, there are places we can visit like coingecko and coinmarketcap which give us some news and information about assets that we can use for fundamental analysis.
- Technical Analysis
Technical analysis involves the use of historical data of the price of an asset to help predict future movements of prices of the asset. This involves the study of charts, the use of indicators, oscillators and other tools on charts to find the right points to make buy or sell entries.
As a trader your technical analysis skills are very important. The ability to read charts and tell what happened, determining the trends by the movement on charts, the use of trend lines, the use of indicators and others all form part of technical analysis.
To perform technical analysis you can visit TradingView, select the asset and then study the charts. You can also access a mini trading view from the charts available at Coinmarketcap. When you select and asset at coinmarketcap scroll down and the click on tradingview at the charts.
The chart below is an example of technical analysis I made just recently.
3. Name at least 3 trading platforms with the highest trading volume where we can buy our first cryptocurrencies and explain in your words the ways to buy cryptocurrencies on that platform ( Do not use Binance ).
Trading Platforms
To trade, every trader needs a place he can interact and trade with other traders. This place where trades take place are referred to as trading platforms or exchanges. From CoinmarketCap we can view the exchanges of assets.
After selecting the asset, just scroll down and locate the markets of the assets. From the market you can see the source which indicates the exchanges you can trade that asset.
Now after finding the market the liquidity of the market is very important. There are some exchanges where it's difficult to buy and sell because they have low trading volume. To make it easy to buy and sell it's advisable to trade on platforms with high trading volumes.
You can use Coinmarketcap to check the exchanges with the highest trading volumes. Simply click on the highlighted number of exchanges at the top when you go to https://coinmarketcap.com.
The exchanges have been ranked from the highest to the lowest per the trading volume. Binance is the exchange with the highest trading volume.
From the image above you can see a number of exchanges with high trading volumes. Note that the rank is subject to change as the volume increases or decreases.
Exchanges with Highest Volume
- Houbi Global
Houbi Global has the second highest trading volume with an amount of $10,761,615,491.16. You can trade at Houbi Global by visiting their official website at https://www.huobi.com/.
- Coinbase Exchange
Coinbase as a trading volume of $2,415,767,173.14. It is ranked the 3rd exchange with the highest trading volume. Visit their official website at https://pro.coinbase.com if you want to trade.
- Poloniex
Poloniex is ranked 11th in trading volume. It has a trading volume of $202,453,519.74 currently. To trade on Poloniex you can visit their website at https://poloniex.com and sign up.
How to Exchange on Poloniex
If you're buying your first cryptocurrency you'd have to use the web version. Go to https://poloniex.com.
Click Sign up and fill the details to create an account.
Next click on wallet.
Click Buy with Fiat. Fiat refers to government issued currency. Click on select asset to choose the asset you wish to purchase. Fill the rest of the details and click Buy Now to make your purchase.
If you already hold crypto assets and you want to exchange on Poloniex you can use the mobile app version. You can download Poloniex app from Playstore or Apple store.
First click on the exchange icon. Select deposit and choose the asset you wish to deposit.
After depositing click on the asset. After clicking, you can view all the other assets you can exchange your asset for. Click on the pair you want to sell your asset for and click trade to place an order.
Conclusion
Trading is something that has long been the source of income for everyone. Knowledge about how to go about trading is very important. I have friends who told me about how they lost interest in crypto trading because they were scammed by others because they lacked knowledge about how to go about it. Would advise everyone to seek knowledge about how to go about something before making a move.
Thanks to @lenonmc21 for sharing his knowledge on trading.