In order to understand the nature of trading in general and cryptocurrency trading in particular, we have to plunge into some financial processes, which we are all a part of.
Since we all use the banking sector services, and not only spend or place our well-earned money on deposit, but dreaming of a cloudless future late in life, transfer some part of the income to retirement funds, social security, and
pensions, we automatically become participants of the banking system and the stock market. We pay pension contributions throughout life, but few of us think about the very structure of the financial industry and how the state
disposes of our future pension.
Unfortunately, the financial system in any country is built in such a way that we do not own our capital. The circular motion of loans and pension contributions makes money somewhat virtual as they are constantly slipping through fingers of the state, fund managers, and private corporations. At the same time, central banks in any state exercise emission monopoly in respect of currency, and this function is assigned to them by the state. Theoretically, the currency is secured with goods or products produced in the territory of a country. This is how its GDP is formed. At the same time, central banks commit themselves to maintain the reliability and stability of the national currency.
Having dealt with all the pitfalls of banking and pension system, let's define:
WHAT IS CRYPTOCURRENCY TRADING? I have three answers to this question for you:
● It’s an opportunity to start to make money by investing in a
cryptocurrency
● It’s an opportunity to make a fortune in a short period of time
● It’s a profitable instrument with little risk if traded correctly
My readers, knowing about my rich experience in this field, also often
ask me the following questions:
● Is it worth investing in cryptocurrency now?
● Is it worth trading on the whole?
● Why should we analyze cryptocurrency?
● How do I invest without having experience?
● Is it better to invest yourself or entrust this to professionals?
I'm sure that all these questions have crossed your mind, but let's first start with basic principles.
Cryptocurrency is a kind of digital currency, the creation, and control over which is based on cryptographic methods. As a rule, cryptocurrency uses decentralized control, i.e., there are no regulatory bodies in this field.
The decentralized control of each cryptocurrency works through distributed ledger technology, typically a blockchain. Information about transactions is usually not encrypted and is available in the public domain. To ensure the
continuity of the chain of transaction blocks, the elements of cryptography (digital signature based on a public key system) are used.
Now let me answer the question, why cryptocurrency is so important to me.
Cryptocurrency has remained the most profitable asset in recent years as well as the only asset a non-professional investor may use to increase their capital several-fold. You don’t need outstanding knowledge, useful social contacts or huge initial investments.
It’s a liberal and democratic asset which may boost your capital exponentially. That’s the most attractive point of cryptocurrency for me. I think you will agree.
But, the most frequently asked question is: how can we use the opportunities cryptocurrency opens before us? Back in 2017, it was a little easier to take advantage of those opportunities. Many people yielded huge results by just investing in different coins. But the year 2018 began with the steep fall of the cryptocurrency. People started to look for other ways of benefiting from cryptocurrency. Trading is one such way.
Some of you may wonder why analysis is so important in cryptocurrency trading. The analysis of cryptocurrency is needed to predict the behavior of a currency price in the market. It is the qualitative analysis that increases the probability of predicting the correct outcome of the transaction. If you were guessing would Bitcoin go up or down, say in the next two days, by tossing a coin, you would guess the right outcome only in 50% of cases. It is impossible to make a fortune this way. The analysis is needed to improve the quality of our guesses.
What do we want to guess?
● Entry point
● Take profit
● Stop loss (a limiter of losses that allows minimizing your losses and closing position if something goes wrong).
Now let’s discuss it in more details.
What is an entry point?
It’s a cryptocurrency price at which we open a position. It is at this point where there are chances for the price to move in the forecast direction.
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Take profit is the price at which we close the position with a profit. If everything goes according to plan, we are ready to say "Enough" at this point.
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Stop loss is the level of "cutting off" losses is the price at which we will liquidate the position at a loss in case of an unfavorable change in price. For example, we expect a price to rise from 100 to 200, but it rises to 105 and then falls down. To avoid such situations, we set a price at which we want to liquidate the position if our forecast happens to be wrong.
To "guess" correctly more often, we apply three types of analysis:
● Fundamental
● Technical
● Computer
However, the the types of analysis are one link in a chain. There is a need to understand the basic principles of market functioning. After all, if you don’t have a clue about the internal mechanism of a car, you will not learn how to drive properly.
Therefore, to understand the cryptocurrency market, you need to know:
● Principles of cryptocurrency market monitoring
● The emergence of the cryptocurrency market, reasons for its
success
● Forecast and development prospects
● Services and sites for traders
● Exchanges for trading
● Complete trading algorithm
Understanding the basic principles of cryptocurrency is very much important as it guides you on how to go about it and make money from it.
Hello @fafiboss
Your post is over plagiarized
Steemit frowns at plagiarism hence your post will be muted.
Try to be creative and use your own words when writing content.
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