Steemit Crypto Academy Contest / S7W3 - Understanding Crypto Trading

Namaste 🙏 to all of you. This is Lavanya from India.

This is my entry post for the ongoing contest by #SteemitCryptoAcademy community.

Today's topic is about Crypto trading and the importance of Fundamental and Technical analysis. For getting success in trading, we must be well aware of those; otherwise, it will not be possible to see the best returns. Thank you, team, for conducting such a wonderful contest regarding this topic with us.

Cryptocurrency trading is the buying and selling of digital currencies such as Bitcoin, Ethereum, Litecoin, and others. It is an unregulated market, which means that there is no central authority or government that regulates the activities of traders. Cryptocurrency trading is done through online exchanges, and investors can access a wide variety of digital assets.

Trading involves the exchange of money for goods or services or the transfer of money from one party to another. In the world of cryptocurrency trading, traders can buy and sell cryptocurrencies in order to profit from the price fluctuations between them. This type of trading requires an understanding of the market and the ability to make informed decisions.

Traders must have a good understanding of the fundamentals of trading, including managing risk, understanding market trends, and having technical knowledge. They must also understand the potential risks of trading, including the potential for losses and fraud.

Traders must also understand the different types of cryptocurrencies and their associated risks. For example, Bitcoin is much more volatile than other cryptocurrencies, so traders must understand the risks associated with trading it. They must also be aware of the risks associated with trading on unregulated exchanges, as there is a greater chance of fraud or theft.

Cryptocurrency trading can be done on both traditional exchanges and decentralized exchanges. Traditional exchanges are regulated by governments and offer investors access to larger markets with more liquidity, while decentralized exchanges are operated by a network of computers and are not regulated.

Trading in cryptocurrencies can be a risky venture, and investors must be aware of the potential for losses and fraud. They should also be aware that the market can be highly volatile and that prices can suddenly drop. Therefore, investors must understand how to manage risk and protect their investments.

Cryptocurrency trading is a lucrative way to make money from the comfort of your own home. As a trader, however, you must understand the market, the risks involved, and the principles you should always keep in mind when trading in cryptocurrencies.

The first trading principle to remember is to always do your own research. Doing your own research means looking into the fundamentals of the asset you are trading, such as its market capitalization, trading volume, and news. This will help you gain a better understanding of the asset and determine whether or not it is a good investment.

Another important trading principle is to diversify your portfolio. Cryptocurrency can be extremely volatile, so it is best to spread your investments across a range of different assets. This will help to reduce the risk of any one asset having a major impact on your overall portfolio.It is also important to have a sound risk management strategy when trading crypto. You should have a clear plan for how much you are willing to risk in any given trade and make sure to stick to it. This will help to ensure that you do not overextend yourself with any one trade and minimise the risk of losses.

Finally, never forget to practise proper trading discipline. Discipline is key in trading, as it helps to ensure that you are not taking unnecessary risks or making impulsive decisions. Always make sure to take your time to analyse the market and make informed decisions before entering into any trade.

By following these principles, you can help make sure that your cryptocurrency trading is successful. Just remember to do your own research, diversify your portfolio, practise sound risk management, and always practise proper trading discipline from this possible to get good returns.

Fundamental analysis is a powerful tool for evaluating and predicting the performance of cryptocurrencies. This method of analysis focuses on the underlying factors that influence the price of a cryptocurrency, such as economic conditions, risk, supply and demand, and news. By using fundamental analysis, traders can generate their own crypto trading ideas, helping them make informed decisions when trading in the crypto markets.

One of the most important ways to use fundamental analysis to generate trading ideas is to research the underlying factors that influence the price of a cryptocurrency. This includes researching the economic conditions of the country or region where the cryptocurrency is based, the cryptocurrency’s market capitalization, the supply and demand of the coin, and any news related to the cryptocurrency. By researching these factors, traders can get a better understanding of the factors that could affect the price of the crypto and form their own trading ideas.

In addition to researching the underlying factors, traders can also use fundamental analysis to evaluate the risk associated with trading a particular cryptocurrency. This can be done by analysing the performance of the crypto over time. Traders can also look for any news related to the coin and use that to help form their own trading ideas. By understanding the risks associated with trading a particular coin, traders can better prepare themselves for any sudden changes in the markets.

Finally, traders can use fundamental analysis to help form their own trading strategies. By understanding the underlying economic factors that influence the price of a crypto, traders can use this information to create their own trading strategies for the crypto markets. This can help them better understand the markets and form their own trading plans.

My Fundamental Analysis of Asset Polygon [Matic]

Fundamental analysis is a method of evaluating a company’s or an asset’s performance and value by assessing a variety of economic, financial, and other qualitative and quantitative factors. This type of analysis can be used to generate trading ideas for cryptocurrencies as well.

For example, let’s take a look at Polygon [matic], which is a decentralised finance (DeFi) platform. To understand the potential of polygon[matic], let’s look at a few key factors.

First, the platform has a strong team of experienced advisors and developers that have been in the industry for many years.

Second, the platform’s technology is built on Ethereum, which is the most popular blockchain platform.

Third, Polygon[matic] has a suite of products and services that can be used by users.

Finally, the platform has a strong network of investors and advisors that are actively supporting and promoting the project.

By looking at all of these factors, we can get an idea of the potential of Polygon’s future.

For example, if the team continues to make progress in developing the platform, investors may be willing to invest more, which could lead to an increase in the platform’s value. Similarly, if the platform can continue to attract users and gain more traction in the DeFi space, it could lead to an increase in the value of its native tokens.

Fundamental analysis can help crypto traders identify potential opportunities that can be leveraged to generate profits. It is important to note, however, that fundamental analysis is not the only tool that should be used. Technical analysis and market sentiment should also be taken into account when making trading decisions.

Furthermore, it is important to remember that cryptocurrency markets can be volatile, so it is important to use appropriate risk management strategies when trading.

Note: This is my own research, not to recommend; before investing, do your own research

Technical analysis is an important tool that can be used when trading crypto. It is a form of analysis used to forecast the future direction of price movements by looking at past price patterns and trends. Technical analysis is based on the belief that history tends to repeat itself and that past patterns can be used to predict future price movements.

One way to use technical analysis when trading crypto is to identify the key support and resistance levels. Support and resistance levels are important because they are areas of the price chart where traders expect to see price movements. When the price breaks through a support or resistance level, it indicates that a new trend is likely to form. Another way to use technical analysis is to identify chart patterns such as triangles, flags, and head and shoulders patterns. These patterns can be used to help traders identify potential entry and exit points for trades.

In addition to identifying support and resistance levels and chart patterns, traders can also use technical analysis to identify trading signals. These signals can help traders determine when to enter and exit a trade. Technical indicators such as moving averages and Bollinger bands can be used to generate these signals. By combining technical analysis with fundamental analysis, traders can gain a better understanding of the market and potentially increase their chances of making profitable trades.

Explaing Polkadot's technical analysis using its price chart through a trading view

Technical analysis is an important tool for traders in the cryptocurrency markets. It is a way of analysing price movements and predicting future trends and price actions. Technical analysis can be used to identify potential entry and exit points, as well as to track patterns and trends in the markets.

When trading cryptocurrencies, the most popular technical analysis tool is the price chart. This chart displays the price movements of the asset over time, and traders use it to identify patterns and trends. When trading on the Polkadot (DOT) market, I using the trading view chart to analyse the price action of the asset.

The trading view chart shows the price movements of the asset over different time frames. This allows traders to analyse the price action from a macro or micro perspective.

So, first, I go to the weekly price chart, and it looks good to me.

Then after I go for 1 day, chart:

In one day chart also it get key support at level of $5.4 range, then moving upward Direction.

So finally, I chose a 4-hour chart to set up my trading strategy. Here we don't hurry; on giving our entry, we must wait and observe, then decide. Here is my trading setup based on present price action. May be it will reach my target, or may not.

That's why I always keep a stop loss for handling any situation. Like that, I place my trades after doing technical analysis.

We can also use indicators such as moving averages and Bollinger Bands to better understand the direction of the price of the asset. By using indicators, traders can identify potential entry and exit points for their trades.

Now I'm configuring my trading set-up by applying the moving average 9 and Bollinger Bands. It's most important to recheckig our trading setup by applying different indicators.

Another important tool traders can use is the volume indicator. Volume is an important indicator of the amount of trading activity taking place in the market. The volume indicator can be used to track buying and selling pressure in the market and can also indicate when a trend is emerging.

Now I am checking the Dot/USDT price chart by applying the volume indicator. If the price pumps without good volume, we may consider it a fake pump, so we don't enter this trade. That's why before setting up any trading strategy, you must observe how it is getting volumes.

By checking here, I consider $Dot to be getting good volume; it is showing buying pressure more than selling price, so we may give our entry. But you must wait to reach its support level, then you may give our entry with a tight stop loss.

Finally, by observing price charts in different time frames, applying technical indicators, and getting an overall idea of the present market situation, I give my entry. Before checking all those, don't give an entry on any trade; it won't give that much returns, besides this high chances of losing our investment.

Overall, technical analysis is a powerful tool for traders in the cryptocurrency markets. By using the trading view chart, volume indicator, and support and resistance levels, traders can identify potential entry and exit points, track trends, and make more informed trading decisions.Must do your own research; don't borrow other people's words.

As the crypto market continues to grow, it is important for new traders to understand the importance of risk management. Risk management is a key concept in any trading strategy and is especially important for trading cryptocurrencies.

By understanding the three key concepts of risk management, new traders can minimise losses and maximise profits.

• The first key concept is Diversification. Diversifying your investments is one of the most important strategies in risk management. By investing in multiple cryptocurrencies and markets, you can spread out your risks, making it less likely that losses from one market will wipe out your entire portfolio.

Additionally, it is important to diversify your time frames, meaning that you should invest in both long-term and short-term strategies.

• The second key concept is Trading Discipline.This means you should have a strategy and stick to it. Before entering a trade, you should have a clear idea of your entry and exit points, as well as a plan for how you will manage your position.

Trading discipline also means that you should not let your emotions get the better of you and that you should resist the urge to overtrade.

• The third key concept is Risk Management Tools. Risk management tools, such as stop-loss orders and margin trading, can help you manage your risk in a more effective way. Stop-loss orders allow you to set a maximum loss that you are willing to take on a particular trade, while margin trading allows you to use leverage to increase your potential return.

By understanding and implementing these three key concepts of risk management, you can minimise losses and maximise profits in the cryptocurrency market.

Understanding crypto trading is essential for getting a profit. There are three key components to consider if you want to be successful in crypto trading: diversification of investment, discipline in trading, and proper risk management. Each of these components should be taken into consideration when formulating a strategy for crypto trading. Crypto trading can be a great way to make a profit, but it must be done in a responsible manner. With the right knowledge and understanding, crypto trading can be a great way to make a profit.

I would like to invite my friends to participate in this contest: @msdbitco, @shohana1, @simonnwigwe, @chiabertrand, @nevlu123, and @harferri.

Thank you so much for reading my article!