Crypto Academy Season 3 Week 1 - Homework Post for @lenonmc21 || What Is Cryptocurrency Trading And On What Platforms Can We Do It || by @daiky69
Today we will discuss the issue of cryptocurrency trading and trading platforms that have become new business for coin originators as well as programmers. Today we are in 2021 where cryptocurrency is no longer a new thing that makes people wonder about it, maybe in 2011 people are still confused with cryptocurrency but not today.
Cryptocurrency Trading has become a new style of investing and managing our own wealth without the intervention of others or the bank and state. While the trading platform has become a market that almost everyone explores to buy or sell their assets.
In this post I want to answer some very good questions from professor @lenonmc21 as a homework assignment he gave to his crypto academy class. Alright, let's start answering the questions one by one, please correct me if I'm wrong later.
1. DEFINE IN YOUR OWN WORDS WHAT TRADING IS, WHAT ITS FUNCTION IS AND HOW IT RELATES TO THE CRYPTOCURRENCY MARKET?
Trading is a term used to make buying and selling transactions for a product, service, or digital asset, which then a product, service, or digital asset will change hands after the buyer pays a predetermined amount of money to the seller. But now the term trading is more synonymous with buying and selling digital assets or other financial products such as stocks.
There are various types of trading and also their functions. As I mentioned above, trading is the buying and selling of a product, service, or digital asset that functions to seek profit, both buyers and sellers seek to profit from trading. Trading is something that cannot be separated from human life, now try to imagine if you don't trade in this world, we have money but don't know where to spend the money because there is no inflammation and vice versa, therefore trading cannot be separated from our lives. .
Trading is carried out on trading platforms and each trading platform is called a market. There are markets that are in physical form like shops in our cities and some are in the form of online or also called virtual.
What is the related between trading and the Cryptocurrency market? As I have explained, commerce is not only selling products like clothes, shoes, cars, etc., but commerce includes everything we trade. Cryptocurrency trading with the Cryptocurrency market has the same meaning as trading and the market, it's just called the Cryptocurrency market because the market only carries out cryptocurrency trading activities without any other buying and selling.
Why cryptocurrencies are not traded in physical stores because cryptocurrencies themselves are virtual and cannot be held because they are not physical, that is the reason why cryptocurrencies are traded online or virtual. That's why it's called the crypto market, because trading in the market is only cryptocurrency and is done online or virtual, the crypto market is usually called an exchange.
2. 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).
Crypto asset traders or investors today mostly use several analysts before investing their money in crypto or selling it. And in general there are two analyzes that crypto investors or traders use, the two analyzes are:
- Technical Analysis
- Fundamental Analysis
Before we invest our money in a crypto asset, it's a good idea to do a technical analysis first to get a better insight and understanding of market sentiment and also predict significant trends in the market.
In the technical analysis that is considered is the history of the Cryptocurrency itself using price charts and also in terms of the trading volume of the crypto itself. Traders who use this method will use several tools to make technical analysis such as chart patterns, indicators, supports, candlesticks, volumes. By using these tools we will be visited by data related to the cryptocurrency in the past, then we can use that data to predict the movement of the crypto in the future. Remember this is just a prediction, there is no guarantee that our prediction will be 100% correct, so be careful and don't just use one way of analyzing a cryptocurrency.
In conducting technical analysis there are several indicators that we must pay attention to and understand, including the relative strength index (RSI), moving average (MA), moving average convergence divergence (MACD), stochastic RSI (StochRSI), and lastly there are bollinger bands. (BB). So we must understand all these indicators to be able to do technical analysis properly and correctly so that our prediction results do not deviate too far from the results we want.
I will give you an overview of technical analysis, if the price of ETH is in a downtrend then ETH will form a support level where people will buy ETH at a certain price, then we can assume that ETH is or will experience an uptrend (getting value back), if that's what we have to do, we have to wait until the ETH price rises to the support level. For example, look at the screenshot below.
Look at the chart above, it is clear that the price of ETH is currently at the support line and the price is almost near the top, most likely the price will continue to creep up before falling again. The screenshot above is today's ETH/USDT trading 4th July 2021.
Technical analysis is easier for us to understand and learn, besides that there are also indicators that we can use in conducting analysis, that's why many traders use technical analysis before investing in crypto.
Fundamental analysis requires us to learn more about an asset, such as the team behind the creation of the asset, what it is used for, how many people have used it and so on. Fundamental analysis is very different from technical analysis, fundamental analysis will also pay attention to economic factors, demand, and supply for the cryptocurrency to analyze it in predicting prices. From there we can judge whether the asset is overvalued or undervalued.
Most people theorize that fundamental analysis is judged by the price of the crypto asset experiencing a decrease or increase when there is a certain policy, decision, or event.
How does it mean that the price of a crypto asset experiencing a decrease or increase is called a particular policy, decision, or event.? Look at the price of bitcoin which has decreased after China's policy forbade its residents to do btc mining. Or you can look at the current price of Dogecoin and compare it to the past, what events caused Dogecoin to skyrocket? You must be familiar with Elon Musk, look after some of his tweets against Dogecoin the price of Dogecoin immediately strengthened.
These are some of the examples we can cite in terms of fundamental analysis, although there are many others. From the explanation above, we can conclude that fundamental analysis and technical analysis must be done first before investing in a crypto asset.
3. NAME AT LEAST 3 TRADING PLATFORMS WITH THE HIGHEST TRADING VOLUME WHERE WE CAN BUY OUR FIRST CRYPTOCURRENCIES AND EXPLAIN IN YOUR WORDS THE WAYS TO BUY CRYPTOCURRENCIES ON THAT PLATFORM (Do not use Binance).
The 3 trading platforms (without Binance) with the highest crypto trading volume based on data compiled from Coinmarketcap are:
I will explain how to buy crypto assets on the Huobi Global platform, because the purchase method is very easy and not confusing, i'm choose Huobi Global because I don't have a Coinbase and FTX trading account.
You must first log in to Huobi Global or download the app on the playstore, and in this tutorial I'm using the huobi app.
After you login to Huobi, on the home menu of the Huobi application you will clearly see "Buy Crypto" as shown in the screenshot below.
Then change the payment to your country's currency, in this case I use IDR because I come from Indonesia.
And apparently no one offers btc, eth, or other tokens with IDR payments, so I have to buy USDT first before I can buy other crypto.Back to the USDT menu, then we can choose one of several offers as shown in the screenshot below.
Don't forget to choose a payment method, there are various payment methods to choose from but for my country there are only two payment methods, namely Paypal and bank transfer.
Then enter the amount we want to buy and click order, in the column above we can choose which bank we will use to make payments, there are three choices, BNI, BCA, and MANDIRI.
We will be asked to make a payment, after making a payment we are asked to wait a while before the USDT enters our account.
With the USDT I can make purchases of other tokens that I want to buy.
Conclusion
Currently trading is not only in physical products, but also includes digital assets. Cryptocurrencies are nothing new nowadays, and day by day more and more people are trying to open up the market for crypto trading.
Technical analysis and fundamental analysis are very different but have the same benefit, namely to seek profit in investing in cryptocurrencies.
More and more crypto markets are arriving day by day, the cryptocurrency trading volume is also astounding. Cryptocurrency has become the new style of investing.