What is crypto trading?
what is the best crypto trading platform
Cryptocurrency trading or cryptotrading is the trading of bitcoin, ether and thousands of other coins on specialized platforms-exchanges.
In such services, a large number of users gather who are ready to buy / sell cryptocurrency at a certain time at a certain rate. Exchanges structure traders ' orders according to trading pairs and prices, allowing you to quickly make the desired transactions according to the specified parameters.
The principle, as in any other market, is simple — you need to buy a certain asset cheaper, sell it more expensive, and put the difference in your pocket.
In fact, trading cryptocurrencies is similar to trading in traditional currency and stock markets, but there are several significant differences.
Low entry threshold. The foreign exchange market requires a considerable initial investment, and the stock market (trading in securities, for example) and often you can only start with a capital of several tens of thousands of dollars. For beginners, these are large amounts, and given the fact that mistakes will be made at first, and losses may occur, this kind of activity is completely unacceptable. At the same time, the minimum orders on cryptocurrency exchanges are on average 0.0005 BTC — that is, with $10-$20 on the balance, you can make your first trade.
Work 24/7. Unlike traditional markets, crypto exchanges operate without interruptions — there is no need to close transactions at the end of the trading day or week before a long weekend. This is important because the GAP (the price gap between the close and the opening of trading) can be unpredictable.
Volatility. Cryptocurrency exchange rates can "jump" in one direction or another with an amplitude of 10% -20% per day. For many representatives of the fiat world, this seems too risky — but it is precisely because of the powerful price fluctuations that crowds of traders come to this market.
For comparison, the volatility of the same EUR/USD pair on average does not exceed 3-5% per month — in order to make money on such a low price fluctuation, traders must invest huge amounts in their positions or use "leveraged" trading with additional commissions and increased risks (this type of trading implies the probability of losing the entire deposit when certain price limits are reached).
At the same time, these volumes can easily be achieved in the regular spot crypto market. To be fair, trading with leverage is also gaining popularity in the digital currency market — but this is still the fate of professional traders. Beginners at first, it is better not to "meddle" there because of the increased risks.
In any case, it is important to adhere to the main rule — to use only free funds for trading, the loss of which will not be fatal. Because it is important to understand that trading — both traditional and cryptocurrency-is a risk.
How to trade cryptocurrencies
There are many strategies, short-term trading, HODL (long-term retention), as well as a huge number of patterns and supporting technical figures — what trading principles to adhere to is decided individually by each user, but the main thing is to be able to quickly buy and then sell an asset as part of your strategy. That's what we learned.
There is also margin trading — trading using borrowed funds (leverage). This is the most risky type of trading.
In this case, the trader borrows funds from other users and participates in larger transactions for which he does not have enough money of his own. In this case, you can earn several times more with a small deposit, or lose a solid part of your money, and in some cases even remain without your own cryptocurrencies.
We are talking about margin collateral — the total value of trust cryptocurrencies on the margin wallet, which are used to issue loans. If the trader did not guess the direction of movement, and the exchange rate of the traded asset began to move in the opposite scenario (this is relevant for both Long positions (bid to increase the price) and Short positions (bid to lower the price), then depending on the amount of leverage, there comes a time when there is not enough collateral to stay in the transaction. As a result, the trader is left without his deposit.
If the price moves sharply in the opposite direction, the exchange first asks for an increase in the deposit, and then the order is liquidated with significant losses recorded for the trader.
Technically, margin trading is not much different from spot trading — however, if you can earn more with a small deposit, there is also a significant risk of losing your funds.
For beginners, it is best to start trading with small amounts in the spot market.
Output
It is not difficult to start trading on the crypto market — it is important to approach the business with a cool head and a sober mind, as well as use only free funds, understanding that trading is always a risk.
First, it is better for a beginner to decide on a strategy: investing or active trading is the benefit of security. 50x.com The exchange is suitable for both short-term transactions and long-term storage of purchased cryptocurrency (HODL). Then you need to allocate the amount that you will not be sorry to lose in case of failure, and start trading.
Cryptocurrency trading or cryptotrading is the trading of bitcoin, ether and thousands of other coins on specialized platforms-exchanges.
In such services, a large number of users gather who are ready to buy / sell cryptocurrency at a certain time at a certain rate. Exchanges structure traders ' orders according to trading pairs and prices, allowing you to quickly make the desired transactions according to the specified parameters.
The principle, as in any other market, is simple — you need to buy a certain asset cheaper, sell it more expensive, and put the difference in your pocket.
In fact, trading cryptocurrencies is similar to trading in traditional currency and stock markets, but there are several significant differences.
Low entry threshold. The foreign exchange market requires a considerable initial investment, and the stock market (trading in securities, for example) and often you can only start with a capital of several tens of thousands of dollars. For beginners, these are large amounts, and given the fact that mistakes will be made at first, and losses may occur, this kind of activity is completely unacceptable. At the same time, the minimum orders on cryptocurrency exchanges are on average 0.0005 BTC — that is, with $10-$20 on the balance, you can make your first trade.
Work 24/7. Unlike traditional markets, crypto exchanges operate without interruptions — there is no need to close transactions at the end of the trading day or week before a long weekend. This is important because the GAP (the price gap between the close and the opening of trading) can be unpredictable.
Volatility. Cryptocurrency exchange rates can "jump" in one direction or another with an amplitude of 10% -20% per day. For many representatives of the fiat world, this seems too risky — but it is precisely because of the powerful price fluctuations that crowds of traders come to this market.
For comparison, the volatility of the same EUR/USD pair on average does not exceed 3-5% per month — in order to make money on such a low price fluctuation, traders must invest huge amounts in their positions or use "leveraged" trading with additional commissions and increased risks (this type of trading implies the probability of losing the entire deposit when certain price limits are reached).
At the same time, these volumes can easily be achieved in the regular spot crypto market. To be fair, trading with leverage is also gaining popularity in the digital currency market — but this is still the fate of professional traders. Beginners at first, it is better not to "meddle" there because of the increased risks.
In any case, it is important to adhere to the main rule — to use only free funds for trading, the loss of which will not be fatal. Because it is important to understand that trading — both traditional and cryptocurrency-is a risk.
How to trade cryptocurrencies
There are many strategies, short-term trading, HODL (long-term retention), as well as a huge number of patterns and supporting technical figures — what trading principles to adhere to is decided individually by each user, but the main thing is to be able to quickly buy and then sell an asset as part of your strategy. That's what we learned.
There is also margin trading — trading using borrowed funds (leverage). This is the most risky type of trading.
In this case, the trader borrows funds from other users and participates in larger transactions for which he does not have enough money of his own. In this case, you can earn several times more with a small deposit, or lose a solid part of your money, and in some cases even remain without your own cryptocurrencies.
We are talking about margin collateral — the total value of trust cryptocurrencies on the margin wallet, which are used to issue loans. If the trader did not guess the direction of movement, and the exchange rate of the traded asset began to move in the opposite scenario (this is relevant for both Long positions (bid to increase the price) and Short positions (bid to lower the price), then depending on the amount of leverage, there comes a time when there is not enough collateral to stay in the transaction. As a result, the trader is left without his deposit.
If the price moves sharply in the opposite direction, the exchange first asks for an increase in the deposit, and then the order is liquidated with significant losses recorded for the trader.
Technically, margin trading is not much different from spot trading — however, if you can earn more with a small deposit, there is also a significant risk of losing your funds.
For beginners, it is best to start trading with small amounts in the spot market.
Output
It is not difficult to start trading on the crypto market — it is important to approach the business with a cool head and a sober mind, as well as use only free funds, understanding that trading is always a risk.
First, it is better for a beginner to decide on a strategy: investing or active trading is the benefit of security. 50x.com The exchange is suitable for both short-term transactions and long-term storage of purchased cryptocurrency (HODL). Then you need to allocate the amount that you will not be sorry to lose in case of failure, and start trading.
Public Last updated: 2021-07-19 07:06:27 AM