HIGH TRANSACTION FEE RELATED TO SHORT-TERM CRYPTOCURRENCY TRADING

Hello to everyone in this great community and on the steemit platform entirely. I greet you all in warmth spirit and I want to believe that we all are doing just great today and if so we give God the praise for the sustenance of life and good health. It has been a great week so far and I hope we all are having a good week going.

Today, I am here once again to discuss with us all regarding an important topic regarding the short-term cryptocurrency trading. Why not stay with me as I unravel the above topic to you all. I wish you a happy reading!

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It is in no doubt that the short-term cryptocurrency trading is more beneficial as we get to gain profits in a short-term hence the name and as such one need not to wait for a very long time before the trade is decided in the market be it a buy entry order or a sell entry order. The whole trade comes to an end once the take profit hits or the stop loss.

On that note, there are risks involved regarding the short-term trading and these risks are numerous and are being discussed frequently especially by me and today I am here again to talk about one of these risks regarding short-term cryptocurrency market trading which is the High transaction cost.

I know you will be wondering how we get to notice high transaction cost during trading especially when it is a short-term trading. Worry not for I will be discussing about this in a shot while and this will help you to see and know why we get to notice higher transaction cost in the cryptocurrency market when trading cryptocurrency via short-term trading.

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Before we move further to the discussion of today, it is expedient that we understand the above term HIGH TRANSACTION COST and then relate it to trading which we will be talking about briefly.

WHAT IS HIGH TRANSACTION COST?

High transaction cost can be seen as the situation whereby the cost for a transaction regarding a particular thing is on the high side which is unfavorable to the person who has executed the transaction.

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It can be denoted as the act in which the price that is expected to be paid for a particular transaction which is to be carried out is way too much thereby causing distress to the individual who is to carry out such transaction.

We can take a typical example using the commercial banks and financial institutions. In the bank, when you want to get loan from the bank, you are expected to accept their terms and conditions regarding the loan you want to collect and hence the return on interest which is regarded as ROI is much and that may discourage the individual who came for the loan but either ways he or she finally accepts it though feels uncomfortable with the interest rate.

Now that is called high transaction cost in cryptocurrency. The interest that is to be paid after the loan is granted is considered as the transaction cost and that is why in trading, be it you make profits or not you are definitely going to pay transaction fee and when you eventually make profit in the market, the transaction cost will be on the high side.

Now let us move on the main discussion of the day haven said all that, I am optimistic that we are now familiar with the above term given.

HIGH TRANSACTION COST REGARDING SHORT-TERM TRADING

Just as I have explained earlier, high transaction cost during trading is a part of the risks that is involved in short-term trading. In short-term cryptocurrency trading, a trader gets to pay more transaction fee than in the long-term trading and this is because of the constant purchase and demand activity going on in the cryptocurrency market.

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The constant purchase and demand activity of cryptocurrency assets allows for the high transaction cost which are regarded as commissions which goes to the platform which the trade is being executed and the spreads which is being splits among traders in the cryptocurrency market resulting to high transaction cost and all of these cost are gotten from the profits made in the cryptocurrency market.

High transaction cost lowers the profits of a trader and this makes the trader to exit the market with no much profit demanding on the margin of the said trader and as such, traders should be aware of the downtime that comes with the short-term trading before executing their trade in the cryptocurrency market.

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CONCLUSION

Having full knowledge about how the cryptocurrency market operates will help the trader to many extent in other to calculate the risk and reward in the the cryptocurrency market if at all it the trade worth it or not and bare it in mind that the short-term cryptocurrency trading has a high transaction rate when compared to the long-term cryptocurrency trading.