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TRADING: A MORE IN-DEPTH LOOK

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Having read the word “trading,” you might assume that not everyone can master
this profession. You are right to some extent. However, you will succeed if you
know a thing or two about trade, take an interest in news and events in the
economic sector, and keep track of the exchange rate. You may even learn to
make some financial forecasts.
In fact, trading in the cryptocurrency exchange does not differ much from
trading in the stock exchange. It’s just important to know how to analyze charts,
make well-considered decisions, not to pander to fear, rumors, or emotions, and
most importantly, to be ready to lose everything.
Trading in the stock market is all about exchanging currency pairs. Each
transaction party dictates its terms, and the second, respectively, decides whether
to accept them or not.
On the cryptocurrency exchange, you work only with orders to buy or sell. By
placing an order, you set the price lower or higher than the available price. You
state how many coins you want to buy and quote your price. If the market
reaches your quote, the order is filled.
Let me explain when you can place an order on the cryptocurrency exchange.
Let’s say you read in the news that Bitcoin prices will fall and then grow again.
It’s the time for you to invest. I want to mention, though, that there is no exact
formula which explains what coins you should invest in and when. The most
important thing is not to invest at the stage of prolonged fall of a coin. On the
contrary, it is good to invest in coins at the beginning of growth after a
drawdown and, of course, in stable-growing coins.
As I have already mentioned, look through coinmarketcap.com to choose coins
for trading. Also, keep an eye on the news about the release of new coins and
track the price charts of main coins. Another important point is that you need to
know the right time to buy or sell in order to make a profit. If you make a
mistake, you have every chance to turn from a short-term investor into a
strategic long-term one.
Do not forget about the exchange fees. I also want to remind you again: invest
only the amount of money you are prepared to lose. You must in no case borrow
money to trade with in the market. You will suffer inevitable losses in this
market.
A critically important aspect in trading is security. The issue of security is
crucial in any field that deals with money. All the more in the cryptocurrency
market, where the amount of your investment portfolio can reach several tens of
thousands of dollars, it would be irresponsible not to think about security in
advance. You must research all possible ways to protect your finances.
What is the most convenient way to steal your cryptocurrency? The answer is: to
steal it from the stock exchange. Let me share an example. In the summer of
2017, the largest cryptocurrency exchange in South Korea, Bithumb, reported
billions of losses as a result of hacking. That’s why I believe that keeping money
on the exchange is risky.
The advantages of hot wallets, which are kept on the exchange, are accessibility
and fast operation. You can easily access them as they are connected to the
Internet. However, hot wallets have the huge drawback of vulnerability due to
their connection to the Internet.
I won’t elaborate any more on the topic of trading here since I devote a separate
chapter to trading as one of the most widespread ways of making a profit in the
cryptocurrency market.

 

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