My 2 Cents Of Crypto - 1/17/2018 - Tricks Of The '#Trade'

Small secret/trick about trading.

Let's assume (for the sake of example) that #BTC price is 10,000 USD. Then 1000 satoshi (or 0.000001000 BTC) equals to 1 cent.

We have token called "X" and its value is 1000 satoshi (or 0.000001000 ). Therefore the price for this token is 1 cent

If #BTC value goes to 20,000 USD, then 1000 satoshi equals to 2 cents, therefore the price of this token is 2 cents

Why? Because it's traded against BTC and its value is measured through BTC. Majority of tokens are measured against BTC, and some of them against ETH. BUT THAT'S ONLY IN THEORY.

NOW, Let's see what happens on the ACTUAL market. You buy #BTC for 10,000 and buy one token for 1 cent or 1000 sats.

When #BTC starts its rally you might think that your token is going to rise too, right? But what actually happens is when BTC goes to 20,000 you will still have 1 cent. Why? Because people sell token X to buy more bitcoin. In result, the price of #BTC is now 20,000, so 1000 = 2 cents, while the price of the token is now 500 sats = 1 cent.

SO how to make smart profits knowing this?

I buy 1000 sats for 1 cent. Since I bought only 1000 sats, and waited till 1000 sats = 2 cents, now I can buy 2 tokens for 500, unlike other traders, who bought 1 token for 1000 sats.

Then, slowly, money start to move from USD and #BTC to alt tokens, and now token costs 1000 sats again, or 2 cents. Since I have 2 tokens - I have 4 cents, while the rest of the market has only 2 cents (they bought it for 1000).

It might sound confusing but almost 80% of the market doesn't use this rule. Remember:

At the end, you still need to buy US Dollar. Usually, you can't sell alt coin directly to USD, as you need to sell it to BTC and then convert from BTC to USD.

So even though you can make some money in USD value, you might lose in BTC value. Which simply means that if you would stay in BTC you would make more money