Steemit Crypto Academy Season 2, Week 3 || Trading and Holding - Two Sides of a Coin
This week's issue by @alphafx discusses some of the core fundamentals of cryptocurrencies. It looks and breaks down the basics that should be the bread and butter when dealing with cryptocurrencies. The profits only start piling up once you have completely grasped the dynamic of holding and trading coins. Either way, to fully benefit from any action it is important to know how to do them firsthand. A well explained, and very simply put, post can be found here
Question 1 :
Do you hold any coins? Talk about the wallet type you prefer/would prefer holding in.
Throughout my time in the cryptocurrency market, I have always hardwired a single rule: "not your keys, not your coins". The simple rule has come through tough lessons. In the past, I have lost quite a sum in exchanges due to hacks, which eventually lead me into looking at wallets. This does not mean that wallets are 100% secure, but are 100% more secure than holding on exchanges.
There are a couple of wallets I use. Most of them are hot wallets, with only one being totally cold in the form of a multi-coin paper wallet. In the cold wallet, I hold the keys to my biggest holdings which can only be acquired if someone gets their hands on it.
The reason most of my wallets are hot wallets is that they are simply more accessible. I like to be hands-on at all times and having hot wallets facilitates my needs. These wallets are adding more and more features as they go and they have become a must-have at all times. Nevertheless, my wallet collection is still very diverse. It is only because I have divided my needs across them. A different type of wallet for a different reason. This is the best way of dealing with wallets, IMO.
• Trust Wallet
My current favorite is the Trust Wallet. Although it is usually considered an Ethereum wallet for all the different dapps and the DEX it has built-in, you can hold almost every coin in there.
The trust wallet fits my needs very precisely. It can easily be downloaded on most mobile phones and a wallet can be created in mere seconds. The wallet allows you to hold a plethora of coins at the same time. It also shows a real time USD value of each coin. As I am usually on the move, having a handy mobile app that not only holds my coins, but gives me the keys and feeds me the current prices makes it really good for me. The DEX isn't as good as I would like to be but helps me make a quick trade whenever I think it is needed.
• Binance Wallet
Binance has been growing in popularity recently, and it is well deserved. I have already stated how fond I am of the exchange in a previous post. Currently, I am using binance to make most of my trades. Due to this reason, it is very convenient to hold some of my cryptocurrencies in the exchange's wallet itself.
I am not the biggest fan of holding on exchanges, but binance has an insane volume for most pairs and it is the simplest to hold a small amount to make sure I can be on time to grab a good trade. This is only best for coins that have a relatively longer transaction time, but not for something as valuable as BTC. For that and the rest, I tend to prefer the give-off between security and transaction fees.
• Browser Wallets
Wallets like Badger, Metamask, Tronlink and so on. These are hot wallets that you can download and install on your browser. Basically, they are all online and on your browser. Most of the wallets, like most I choose, give you your private keys. They are also very handy when moving crypto around from one place to another.
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I usually only use these for small amounts of crypto that I may want to trade in a short to medium term. Some of these wallets can also be accessed through mobile apps but I only use trust wallet for the phone. So, if I do not think of short term or if I want to hold something for a long term, then I do not opt for a browser wallet.
Question 2:
With screenshots, show how to perform spot trading on any pair of your choice.
I will be spot trading some BUSD for USDT.
My preferred way of doing it will be going to my wallet, locating my coin and clicking on trade, then the pair I want. This is done on binance and may look different on other exchanges. The reason I like to do this is that it lets me do a quick recap on my portfolio and look other options I have.
Spot trading on Market Price.
This is straightforward. If you want to make a trade at the current market price you can use this.
1 . Select the "Market" option
2 . Enter the amount you want to trade and press sell/buy depending on your action
Over here I am selling 1 BUSD for USDT. I have entered 1 in the amount of BUSD, which will be sold at the same moment I press "Sell BUSD" for the current price.
3 . Alternatively, use the slider to feed the amount to be traded
In "Market", you have to only feed the amount of token you want to trade and press the button- the action will be executed at the same time at the current price. You can either feed the amount manually or use the slider to manage your trade in percentages.
Spot trading on Limit.
This is the best and safest method of Spot trading. Unlike market, on limit you can tweak all factors of your trade. You can set the price you want to buy/sell at , you can choose the amount and you can tweak the total to receive. It lets you have control on most aspects.
Price:
Here, I have entered the price to be 1. The amount of BUSD to sell at 1. The total becomes 1, which I will receive if this position is completed. That means when the BUSD/USDT pair price reaches 1, my order will be executed and I will sell my 1 BUSD to receive 1 USDT.
Amount:
When I feed 5 in the amount, the total automatically changes to 5 USDT. This means when the price reaches 1, my 5 BUSD will be sold and I will receive a total of 5 USDT.
Total:
I have not typed or changed anything. I only put 3 in "Total", you can see that the rest has shifted to match automatically. This means I will receive total of 3 USDT and the amount is automatically updated at the current price. I can also tweak the price and feed a total to adjust the "amount".
Once you press buy/sell, it will be executed but not completed until all the factors of the trade have been matched.
Question 3
Holding or trading, which do you prefer and why?
Holding, but it depends. I primarily like buying as much as I can on a "dollar averaging" trading strategy I am following. It lets me buy as much as I can for a set amount of fiat and since the strategy does not involve selling, it all settles down to holding.
As much as I would like to trade for profits, I have been reading up on trading philosophy, which is awfully close to stock market philosophy and it makes me weary of falling into greed or quick moves. At most times I prefer buying early as possible, holding and monitoring the market up until local highs or ATH, and holding more if it does not look like the coin will fail.
When there is no visible need to exit, I do not make a sell. Instead, if I believe in the coin and the graphs and track record is promising then I buy up some more. There is only a single instance when I am full fledged into trading zone. That is when I am very keen to get my hands on a coin, but unable to find the capital for it. In that case I will most certainly actively trade pieces of an older bag at the best price to buy up a new bag of coins.
I believe everybody has their own strategy which is tailored and often retailored to facilitate them reach their end goal. I have had some good luck in fx and CFD, but that was too stressful for me and required a lot of time. Hodling is much easier, convenient and seemingly fits the needs of a more relaxed ling term plan.
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