Crypto Academy / Season 3 / Week 8 - Homework Post for [Crypto Professor @yohan2on]

fabiha (68)Beginner[1,2,5,6,7,9,10]in SteemitCryptoAcademy • 3 years ago (edited)

Hello everyone. This is my assignment post for professor @yohan2on in the last week of CryptoAcademy Season 3.

1- Define the following Trading terminologies;

Buy Stop

A Buy Stop order is a pending order you place when you wish to buy at a price above the current market price.

As an example

If the eurodollar is currently trading at 1.16959 and you wish to buy only if it rises to 1.17711, you may consider setting a buy stop order at 1.7711 This would imply that you're speculating that the market will keep moving upward after the order is triggered.

Buy limit

A Buy limit is a pending order you place when you wish to buy at a price below the current market price.

As an example,

If the EuroDollar is currently trading a 1.16959 and you wish to buy the price drops to 1.16594 you may consider setting a buy limit order at 1.16594. this would imply your speculation that the market would rebound upward after the order is triggered.

Sell Limit

Sell limit is a pending order you place when you wish to sell at a price above the current market price.

As an example

If the eurodollar is currently trading at 1.16984 and you wish to sell only if it rises at 1.18100 you may consider setting a sell limit order at 1.18100 this would imply that you're speculating that the market will reverse downward after the order is triggered.

Sell Stop

A Sell Stop Order is a pending order you place when you wish to sell at a price below the current market price.

As an example

If The Euro Dollar is currently trading at 1.16976 bid and you wish to sell only if it drops to 1.16493 you may consider setting a sell stop order at 1.16493 this would imply that you're speculating that the market would proceed downward after the order is triggered.

Trailing Stop

Trailing Stop is a simple calculation that tells us when to sell a stock. We decide how much money we are willing to risk, and the stop tells us when we hit that point.

Source

Advantage of Trailing Stop

A trailing stop is more flexible than a normal stop and its main advantage is that it allows shares to continue to rise in the direction to maximize the profit. In order to protect the capital, the trailing stop will sell the stock automatically during remarkable declines in price. But this order does not put a cap on profits. Shares can still rise and keep invested as long as prices don't dip by the predetermined percentage.

Margin call

To Talk About a Margin call first of all I Focus on the Word call. The call does that mean you get a phone call or anything like that. It Could be in some situations but Here Call the word Coming from your Broker. They are making a call to you Again not necessarily in the sense of picking up a phone and calling you or anything. It gets some sort of email. in Some cases depending on brokers and their policies.

In a simple way Margin Call is essentially your broker ending the trade for you If a price goes too far against you, Your Broker is gonna just end the trade and that means game over, you've taken the loss it's all out of your control, its put more money, into your account so that you can balance back out this risk or we are definitely close the trade.

2 - Practically demonstrate your understanding of Risk management in Trading.
*Briefly talk about Risk management
*Be creative (I will expect some illustrations)
*Use a Moving averages trading strategy on any of the crypto trading charts to demonstrate your understanding of Risk management. (screenshots needed)

Trading is very profitable and also be very risky, but there are various foreign exchange risk management strategies, that can be used to limit risk and financial exposure. Every trader should have a trading strategy; like having a plan and a timetable on when to enter and exit the market and what kind of movements to expect.

Developing strategies requires education. Every trader should learn at least the basics of trading, understand chart movements and indicators, and how charts are interpreted. There is a lot of information on trading available both on the Internet and in print.

If you want to become a successful trader, then you have to learn and make use of a foreign exchange risk management tool when trading. Even the most knowledgeable traders, however, can't predict with absolute certainty how the trades market will behave. For this reason, every trader is advised to take advantage of the available foreign exchange risk management tools designed to minimize loss.

I will see most of the traders that getting Loss Due to her less knowledge. What can they Do? Why are they getting loss?
Most of the traders invest a large amount of money in a single coin some time they get a Big profit but Most of the time they get a big loss so its an advice to Invest your Money in Different coins.

As an Example

You have a total of 100$ for investment. So Don't invest it in a single coin invest it in multiple coins like invest in 4 Coins Average 25$ per.

As shown in the picture this is my investment this is not a big investment but like 10$ Per investment on Start 2 and Some, I will get a loss. and some get a profit.

Use a Moving averages trading strategy on any of the crypto trading charts to demonstrate your understanding of Risk management. (screenshots needed)

The moving average is one of the foremost commonly used technical indicators. It will move up and down in fast-moving markets. you may find that the worth could also be surging up only to plummet moments later before surging up again increasing the potential for false signals.
Moving averages are wont to identify trends and ensure reversals When the price is above the moving average line we consider the instrument to be an uptrend, Conversely if the price is below the moving average line we consider it to be a downtrend.

I will visit TradingView.com here click on the chart then add the indicator Moving Average as a 50 Period and 200.

Add this indicator Two times.

Go To the Indicator setting then change the length to 50 and 20.

The Blue line is the 20 MA, while the red line is set as the 50 MA

I will use the Moving indicator to show the risk management also I have labeled the chart Now, I will using Risk Ration 1:2. When the Blue line(20MA) passes through the red Line(50MA) then there will be an entry point for the traders. The Red Box Showing the stop loss level while The Green box is Showing the profit level.

To Show the Risk Management. Here I will use 1:1