Crypto Academy / Season 3 / Week 1 - Homework Post for professor @lenonmc21
Introduction
By general conviction, trading refers to the activities involved in buying and selling commodities, goods, and services. The scope of trading cuts across different areas, from buying and selling of goods, exchange of currencies, trading the stock market, trading crypto assets government bonds, metals, indexes, futures, etc.
The main aim of trading is to earn profits, where the buyer, buys at a discounted rate and tends to sell when the price of the asset increase, example: buying one ounce of gold for $1750 and selling $2000, in this case, the trader earned a profit of $250. But, in some cases traders incur losses, where the value of the asset the bough depreciate over time, example: Buying one ounce of gold for $2000 and selling $1600, in this case, the trader lost $400.
Cryptocurrency Trading
Cryptocurrency trading is the process involved in buying and selling crypto assets to earn profits over some time. Example: Buying Ripple(XRP) at $0.6523 and selling at $0.9000, for a profitable trade. Or, buying Ripple (XRP) at $0.6534 and selling at $0.4583, in this case, a losing trade.
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In cryptocurrency trading, you can either swap a crypto asset with another crypto asset or swap a crypto asset with a currency.
Because crypto is a digital asset, its value depends on the amount of the crypto asset in circulation and the number of active users. Crypto exchanges are online hosted platforms that support the swapping of crypto assets, and access to a wide range of other crypto assets.
Trading Tools (Technical & Fundamental Analysis)
Trading involves active negotiation between buyers and sellers trying to find a balance in the price of the commodity. In cryptocurrency, some tools help in better and faster decisions. There are different tools used, which include charts, indicators, algorithms, technical and fundamental analysis, etc.
Technical Analysis
Technical analysis is a trading tool that is used by traders to predict the possible direction of price. It involves the study of previous price movements, price movement patterns, executions signals, etc.
Technical analysis exist in different forms because trader observe the market differently, but the core concepts are the same.In cryptocurrency trading, technical analysis is done using price action and candlestick chart.
Fundamental Analysis
This trading tool provides an overview of economic news and how it impacts the price of assets in the market, it involves the study of economic data and its interpretation of raw price movement. In cryptocurrency, fundamental analysis results from macroeconomic events like blockchain update news, government policies, whale announcements, etc.
Fundamental analysis affects the price of crypto assets, because of traders' sentiment. This means that the price can rise or fall on the release of fundamental news.
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The above government ban affected the crypto market as Bitcoin prices dropped.
Buying Crypto
Cryptocurrency exchanges are online marketplaces that cryptocurrency trades can be done. They provide a wide range of services to support the transaction of cryptocurrency.
Top three performing exchanges include: Huobi Global, Coinbase exchange, Kraken.
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For the sake of this demonstration, I will use Huobi Global.
To buy cryptocurrency from Huobi Global:
a) visit their website and create an account.
b) Choose to sign up by email and click Next.
c) Next verify your mail and log in.
d) After login, click on buy crypto
e) Next choose the purchase option, quick buy or p2p
f) Next, choose type of order buy/sell.
g) choose crypto asset and amount.
h) Choose payment option
I) then click buy
That are the steps to buy crypto on the Huobi Global platform.
Conclusion
The concept of trading is widely adopted in many areas. Crypto trading provides opportunity for traders to earn, while technical and fundamental analysis contribute to enhance trading.
RATING: 8.5.
Remarks:
Presentation: In your presentation you only lacked that you create a cover image of your own, in order for it to represent your publication, however basic it may be.
On question 2: Remember technical analysis also minimizes the risk in a trade and fundamental analysis not only take the news and events, but also the research of the company and project involved, know financial statements if in the fiscal year they made losses, in a crypto project if it is about to launch its new technology to the public etc.
My comments and/or suggestions
Your assignment was very well grounded, they were just small details, you should keep in mind that for your screenshots you should place a watermark with your username and create a cover image to represent your work.Thank you professor @lenonmc21, I will improve on that in my next assignment.