Hello Lovely People
How's everything going on. I hope you're all doing very well. Today I'm writing homework task for professor @nane15 which is about Basics To Trade Cryptocurrency Correctly.
Let's Start.
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What do you understand by trading?
Trading involves buying and selling it means marketing an asset where operators can trade currencies, some buy them and others sell them for profit. One of the advantages of trading is that if you have a good idea of the market, you can buy an asset at a lower price and sell it at a higher price where you can generate incredible profits, allows the trading operator to work to your liking where you feel comfortable, I mean you can work with short or long term operations
Trading covers many areas, not only in the cryptocurrency market, but also in the social sphere, we understand that these actions are in our daily life.
If we talk about the cryptocurrencies, when an operator wants to get a currency, he observes the market and realizes that he can buy the currency, the problem is that it has to have a certain point because If he buys too much and then the low price is usually lost there we realize the constant struggle between buyers and sellers.
Lets give an example of everyday life, when a person wants to buy a house. For example, that person comes to the seller and there is an exchange, that is, a struggle between those who want to get a house at a lower price than expected. The one that the buyer has, we realize that there is a type of business where everyone seeks the most benefits. A negotiation of any asset where we will observe a constant struggle for profit between buyers and sellers.
Well, trading is just about using all your tools and methods to get the opportunity to acquire assets at a very low price and then wait for the value to increase to sell it.
What are the strong and weak hands of the market?
The market is reflected in many cases, the weak hand and the strong hand where the charts provide us with important information for which we must first understand these concepts.
In the world of commerce it is very clear who is the strong hand and who is the weak hand, we all know that buyers and sellers are the ones where everyone finds his way to make a profit where there is a game of raising or lowering the price. The asset is reflected in the behavior that the graph can produce, some with its own emotions, some with its own greed and others with its own inexperience.
Strong hands
When we talk about strong hands we refer to people or it could be companies with strong purchasing power which we usually call whales. These whales are marketed because of this investment can move freely which can be independently created to invest in an asset or extract an asset. There are usually enough funds to carry out an operation whale has a way to run the market badly this is because I say that usually when they carry out an operation they always exploit the weakest people in the market. Because they can increase or decrease the price significantly in order to have complete control over the market and make huge profits in their favor.
Weak hands
When we talk about weak hands, we are talking about small investors like you and me, who are usually mere human beings, who do not have disproportionate strength which changes in the value of an asset on the chart and that we usually call the weak hand when the whale moves, weak hands usually follow the whale in this case, because in the opposite case, the whale makes a move that is not conducive to small investors, so it causes a lot of damage to their assets, forcing them to do something that will make them lose and that is why they are called weak hands.
In the following graph we will see what the strong hand and the weak hand look like in the market.
Source Tradingview
Which do you think is the better idea: think like the pack or like a professional?
In the world of cryptocurrencies and investing my mentality is different from that because it is a huge ocean and the fish in the oceans that move in large groups are the fish that are swept away by the movement of the waves and if they get too far by luck then sooner or later a powerful animal like whale they will be eaten.
I do not allow myself to be influenced by the information that is transmitted to the general level. Many people think of investing in a currency when they hear that others have to speak well of it. What they don't know is that it may be too late that ended the operation and therefore losing their money.
I do my own research and I am not bothered by outside comments, so my investment will be in projects that I trust and I will not be affected by my emotions because my analytical result of my operation project In the same way, when I see fit, I will be able to get my earnings back.
Demonstrate your understanding of trend trading.
Trend is a very important aspect where if the operator does not know what the trend is then it will be guaranteed to fail. When we talk about a trend, we are talking about a fight between buyers and sellers where the operator will have the ability to guess when to enter or when to exit. We should use several indicators to differentiate operators in the next movement. We can say that the trader will have the ability to sell or buy the trade long or short.
As we all know and we are clear that we have 3 types of trends.
Down trend
When we talk about the downward trend we can say that the value of the asset is losing value where most of the operators are selling the asset where the graph will show us the maximum and minimum.
Source Tradingview
Up trend
When we talk about the uptrend, we can say that an asset is gaining value where operators are gaining by purchasing a currency asset, with which the value increases and at least in the graph maximum is produced where the reflection can be easily seen.
Source Tradingview
The side trend
When we talk about the literal market, it is when the asset price does not create a direction or a downtrend or a bullish trend. When that happens, operators are looking for what could happen in marking, because they will pay attention to any movement that will create a trend when we can say that it is a strong one in the stage waiting for the next step.
Source Tradingview
Show how to identify the first and last impulse waves in a trend, plus explain the importance of this.
When we talk about the first and last movement, it is a basic fact that the user has to pay close attention, where the identification of each movement is very important through which the graph can show, because it is one of the assets that will create a new direction where traders can make a profit through their actions.
The first impulse
While observing the graph we realize that we can predict the price using Elliott Wave because there are 5 references marked on the graph which allow us to mark the maximum asset signal at one reference point.
Source Tradingview
The last impulse
When we talk about the last movement we are not referring to the formation of 5 points on the graph, considering the last point we will observe the continuity of a pattern due to the fact that the graph observes 5 points which shows us what trend we are in.
Show how to identify a good point to set a buy and sell order.
We need to be clear that when we place a buy and sell order, we must make sure that we can identify the right time to place an order, we must wait patiently and be very prudent when investing.
Purchase operation
When we conduct our purchase operation, the first thing we should observe is that the first effect since then is the point where a new trend will be formed on the chart, already reaching its 5 points. Our first movement and we will observe that the candle will be larger than line C, already receiving this information, the operator should place it just below our stop loss line, this information already exists, we have an entry that's where we can get it.
Source Tradingview
Sales operation
Here we will conduct our sales keeping ourselves in the final continuum keeping in mind that we will observe as many lines of Elliott wave as possible due to which the operator will have the ability to give minimum as the graph gives us show how to act. Always sell order and when it meets the requirement that the sale order is below line C. Thanks to this information we will have a sale where we make a profit.
Source Tradingview
Explain the relationship of Elliott Wave Theory with the explained method.
Elliott Wave Theory plays a key role to help the operator to operate successfully where we will operate through 5 trading patterns until the lines are corrected so that we know what position we are always keeping in mind in the market. And we should never forget the use of the first and last movement and this is a golden rule in the theory of Elliott Waves.
As we can see in the graph, everything is in perfect harmony and an example of this is how every development of the waves in the market and their corresponding corrections develops accurately, giving a theoretical control of the trend. Yes, because the trend is not entirely predetermined. Because prices and blockchain projects can fall overnight if they are not fully secured.
Conclusion
Trade can happen in all areas of life where you try to make a profit by getting a product at a lower price than you planned to sell. Always work with the trend, if you use Elliott Waves you can get good rewards for improving it. Working with the trend is not so fast on all time frames so it is more appropriate that you trade your business patiently. Lastly I would like to thank Professor @nane15 for this wonderful lecture.
