Steemit Crypto Academy Season 3-Week 1 Assignment| What is Cryptocurrency Trading and on what platforms can we do it?

blessingkasabe (65)Beginner[2,3,4,5,6,7,8,9,10]in SteemitCryptoAcademy • 3 years ago (edited)

Dear Steemians,
I am glad to be part of this week's lesson. Thanks to Professor @lenonmc21 for giving us this excellent lecture on Cryptocurrency Trading and the platforms used for this trading. After going through the notes and researching this week's topic, I have decided to review what I have learned in my homework task.

1. Define in your own words what trading is, what its function is, and how it relates to the cryptocurrency market.

Trading in simple terms means the exchange of economic goods and services for with the sole aim of making profits at a given period.

Forms of Trading
There are several forms of Trade and they Includes:

Domestic and International Trade.

Domestic Trade refers to all transactions of various commodities and services within and outside the country. It can come in several ways, but our concern is within the country and its citizens. In contrast, international Trade involves two or more countries. In the form of importation and exportation of goods and services between these countries.

Virtual and physical Trade.

Virtual Trade has to do with online or digital, which is becoming popular day in day out as civilization is concerned, Whereas physical Trade occurs in a given geographical area or place to meet and engaged in buying and selling. In virtual trading, traders may not see each other faces, but for physical they can see each other faces.

Stock trading

Deals with buying and selling of securities on a floor of stock exchange platforms either virtual or physical.

Importance of Trade.
Since one can't have everything by himself, there is the need for trading.

Provide one with their needs.
Help goods and services gets to the final consumer to fulfill the principle of supply.
Create international relations.
Help others to exchange what they have to get what they want.
There is compensation in payment to the producers and the supplier, either currency or virtual.

Trading in Relation to Cryptocurrency

Because Trade is an economic function of demand and supply of goods and services. Trade can either be a virtual or physical market platform. Which deals with currencies. Cryptocurrencies are one currency for Trade. Since there is an exchange of virtual coins between buyers and sellers at virtual market and the currency used for this exchange is of high value.

Cryptocurrencies are virtual or digital coins; an example is Bitcoin, Ethereum, STEEM, Dogecoin many more where their value in terms of price mostly has comparative difference between them, thereby creating Trade among them. They have high Volatility, which indicates that their prices can either be appreciated or depreciated within some time. For example, you can buy 250 steem today, 3/07/2021 at $100, (appreciated).

Cryptocurrencies Trading is pretty good, too, due to its liquidity. It also has various types which can be exchanged. For instance, in Binance, steem has two genuine exchange pairs in which Trade can occur anytime or any day. That is STEEM/BTC and STEEM/BTC.

Cryptocurrency trading do not involve only buying and selling of crypto but also provide some level of security to the digital assets of traders. This digital trade breaks the boundary between countries, people from different parts of the world can trade on a common platform without or less international limitations.

Define and explain which are the tools used for trading ( Technical Analysis and Fundamental Analysis ) and at least one example of each. ( A screenshot is required ).

Due to the volatile nature of the crypto market and cryptocurrency trading. The trader must know the prices trends. Knowing the price trends will help in making price trading decisions to maximize profits and minimize losses.

There are two main essential tools to understand the price trends and useful for trading, these includes;

Technical Analysis

The technical studies deal with studying the charts using diverse approaches or means like the MCDA, Bollinger Strategy, Reverse Strategy index (RSI), EMA, and To understand the market trends and cycles to predict and understand the prices situations at any given period. The market trends and cycles are predicted accurately in demand and supply, where the parameters are well studied. But when there is a mistake in understanding the demand and supply parameters, the trader's financial decisions will be poor, and loss will occur. The price of cryptocurrencies changes with time, so with proper understanding of this technical analysis will help to know the best time to enter the market and the best time to sell, with this the trader can minimize losses and maximize profits.

Source

For instance, the chart above is necessary to understand the market trends and predict the price change. The main graph consists of line movements of the price and the bar chart below, which helps easy understanding. The level of resistance and support indicate when to buy and sell financial assets. There are several approaches, but here shows few; MA, BOLL, RSI, EMA ETC that can be used.

To study the market trend technically. There is price and amount of coin, where the red represents sell (ask) price and the amount and the green represents buy (bid) price and the amount. But there are other charts aside from this, but all use the same approach.

Fundermental Analysis

It deals with the empirical study of the coin in detail. This analysis is used to understand the various whitepapers that the developers of each coin have presented to determine the viability of the coins. The study of the whitepapers is helpful for it's prices trends and market value.

Fundamental Studies on coins will also help to predict the price and understand it's Volatility. Since market capitalization is involved, high or low price ranges each day, it ranks and circulates supply. Building strong and shape financial decisions on coins depends on knowing these factors.
Fundamental Studies shows the type of coins that we are dealing with. Examples include; Dash is a privacy Coins, USDT, USDC, BNB and But are exchange tokens

TUSD and BUSD are stable coins. In all, trading will be more effective if there is knowledge of the nature of the coin you are dealing with. You need to trade with the stable coin if you don't want the Volatility of the price to affect your investment and if you want a coin with high liquidity.
There are several cryptocurrencies on the platforms that are useful for fundamental studies of these coins, but I prefer #CoinGecko.

The above chart shows essential details of the coin #steem. It shows its ranks, prices, market cap, Trading volumes, etc. These are reliable information needed for Trade.

3. Name at least three cryptocurrency exchanges with the highest trading volume where we can buy our first cryptocurrencies and explain in your words the ways to purchase cryptocurrencies on at least one of these platforms ( Do not use Binance ).

Crypto exchanges are ranked on coinmarketcap based on various factors, including their daily trading volume. Now, let us check for exchanges with the highest trading volumes.

Steps to know exchanges with highest trading volumes

Go to Coinmarketcap.com, locate exchanges and click on it.

Locate "spot" on the drop-down menu and click on it.

A list of Exchanges will be displayed, which are ranked according to their 24hour reading volume.

From coinmarketcap, 3 of the exchanges with the highest trading volumes are,

Huobi Global
It is ranked 2nd as of the time I am writing this post, and it also has a 24hours trading volume of $2,619,214,822.

Coinbase Exchange
It has a 24hour trading volume of $1,200,690,759 and has been ranked 3rd as I am writing this post.

Poloniex
It has the 13th rank and a 24hour trading volume of $80,947,440.

How to buy cryptocurrencies on Poloniex

I already have an account with Poloniex, but I will create a new one for illustration for the sake of this task.

How to create an account on Poloniex

Visit the official website of poloniex {poloniex.com](https://poloniex.com/)
Click on "Sign up" at the upper-right corner of the homepage interface.

Enter your email, password

Verify the catch and accept the terms and conditions, then click on sign up.

Congratulations, my account has been successfully created.

You can further Provide your personal information to verify the starter stage and continue with your documents to verify the intermediate verification level within 10 - 15 minutes.

How to buy cryptocurrency

Now that our account has been fully created, let us know how to buy our crypto.

Locate click on "EXPLORE" at the homepage and select "FIAT" to buy with my bank debit or credit card.

Fill in the particulars on this page, select the coin you want to buy and the quantity of it.

Click to accept the policy agreement and then click on "Buy now."

After that, entering your credit card details, the transaction will be completed, and the crypto will be in your wallet.

Conclusion
Cryptocurrency trading has become a crucial part of the digital market. A lot of analysis should be done to minimize losses and maximize profits.

Thank you for reading my post

#lenonmc21-s3week1 #criptoacademy #ghana #criptomonedas #cryptotrading #steemexclusive #coingecko #steem