Steemit Crypto Academy Season 3-Week 1 | Homework Post For @lenonmc21 by @rubilu123 | What is Cryptocurrency Trading and on what platforms can we do it?
Introduction
This week professor @lenonmc21 has delivered his first lecture on cryptocurrency trading.
A lecture that looks to explore the cryptocurrency market and also teach us how to trade cryptocurrency.
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After going through his lecture, I will now submit my homework task.
Define in your own words what trading is, what its function is and how it relates to the cryptocurrency market.
We involve ourselves in trades everyday and we can say making trades in cryptocurrency will be almost similar to making normal trades
Trading is the act of purchasing/selling goods and services.
In the cryptocurrency world, we purchase/sell cryptocurrency .eg btc, eth; that is buying and selling of cryptocurrency.
Take for instance when I go into a super market to buy a bag of rice, i pay a certain amount according to the amount of rice I am purchasing.
This is similar to buying cryptocurrency.
Let's say that I want to buy btc.
Even though I have options of paying with other cryptocurrencies, I also have the options of paying in the local currencies.
We know that 1 btc is currently valued at around 36k, so if I want to purchase 1btc I will pay an amount of 36k dollars.
If in my country we don't spend dollars I will pay in my local currency equivalent to the amount on dollars.
We can also purchase the btc with other cryptocurrencies such as USDT, eth and other coins.
Trading has several functions,and some of them are stated below.
Trading helps us traders to be able to convert our cryptocurrency into money or other cryptocurrency.
Take for example you have btc you want to change for money, this can he done through trade as you will exchange your btc for money or into other cryptocurrency.
Trading helps us to be able to acquire cryptocurrency.
Take for example I have money and I want to acquire some cryptocurrency.
I can exchange my money into cryptocurrency through trading.
After all is said and done this brings us to the conclusion that without trading, holders of cryptocurrency will not be able to convert their coins into fiat or other cryptocurrencies and then people with fiat will not be able to convert their fiat into cryptocurrency.
This is why trading in the world of cryptocurrency is so important.
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 ).
There are tools which cryptocurrency traders use in their daily lives before entering the market to make acquisitions and before entering the market too to make some sales.
This is what we normally call entry points and exit points.
The entry points is when a trader should know when best it is to enter the market so that he does not end up making loss.
Exit points is when a trader should know when to trade his coins in order for him not to make loss.
This is mostly done in a bear market.
I will be discussing two tools and these tools are
a) Fundamental analysis tool
b) Technical analysis tool.
The fundamental analysis tool.
The fundamental analysis tool is one that bases its analysis mainly on ongoing events in the cryptocurrency world.
In this type of analysis, news is very relevant to be able to make your final analysis.
These news are sometimes able to determine how the market goes.
Whether the coin will be falling or the coin will be rising.
A significant example is when elon musk tweeted some months ago about his Tesla company receiving bitcoin as a form of payment for their Tesla cars.
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These news caused the price of bitcoin to spike up significantly.
This news affected the cryptocurrency market positively.
This same man some time ago tweeted about his Tesla company; saying that they will not be receiving bitcoin as a form of payment as the mining of the coin causes damage to the environment.
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This caused the price of btc to start falling
This news affected the cryptocurrency market negatively.
In these two scenarios, the news from one man affected the cryptocurrency market positively and also affected the market negatively.
Technical analysis tool.
The technical analysis tool is a very important tool to the cryptocurrency market as it is able to mostly guess when the market is going into a bear or a bull.
There are several technical tools which traders use to determine when to enter the market and also when to exit the market.
A perfect example of this tool is the super guppy scale.
This tool is able to indicate when the cryptocurrency market is in a bullish cycle or it is in a bearish cycle.
It does this by turning green whenever we are entering a bullish market and it also turns red when we are entering into a bearish market.
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This is when the market turns bullish, you can see that the indicator turns green
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This is when the market in bearish, the indicator flips red as seen at the red side
Name at least 3 cryptocurrency exchanges with the highest trading volume where we can buy our first cryptocurrencies and explain in your words the ways to buy cryptocurrencies on at least one of these platforms ( Do not use Binance ).
Buying cryptocurrencies is a whole lot of hustle on it's own.
As people who are beginners in the trade and are buying the coin for the first time will be confused on which cryptocurrency they should purchase.
We must also consider certain factors beside we choose our exchanges.
There are many cryptocurrency exchanges available for traders who want to trade in cryptocurrency, but we must look and choose carefully the one which will provide our needs.
We must make sure the exchange is available in our home country.
The exchange should also have our home country's currency registered on the platform.
For example, houbi pro has a very good liquidity but they do not have my home country's currency registered on the platform, therefore I cannot exchange my cryptocurrency for fiat on the platform.
The following are cryptocurrency exchanges where we can make trades.
a).Houbi Global.
b).Coinbase
c).Gate.io
d).Poloniex.
e). Bittrex.
f) Paxful.
Paxful.
Paxful is a cryptocurrency exchange platform but with limited cryptocurrency that you can trade in.
The platform only has BTC,ETH, and USDT listed on the exchange.
Apart for this three coins you cannot trade anyother cryptocurrency on the exchange.
We must note that, the trades on paxful are done only using the p2p market
How to buy bitcoin on paxful.
a). I will log into my paxful account here
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b). Then after I have logged in, i will click on the buy bitcoin button as shown in the red shape.
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c).I will be taken into the paxful market, and I will see traders with thier advertisements.
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d). I will now look for the trade I find most suitable for me.
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I choose this trader, because I do not meet the traders requirements.
So I find the second trade most suitable for me.
e). I will then make sure I change the currency to my country's.
In my country ghana we spend cedis.
So I will change the currency to Ghanaian cedis.
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f).And then since I will like to pay using mobile transfer, I will change the payment method to mtn mobile money.
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g).Then I click on the suitable trade, and then I enter the amount of cedis I am willing to pay for the equivalent btc.
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h).Then I click on the buy button, I will then be taken to the trader's platform where I will make payment before the coins will be released into my wallet.
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Note that when I click on the buy button, the coins will be sent into an escrow.
It no longer stays in the seller's wallet so when payment is confirmed the escrow releases the coins to the buyer.
If am not interested in the trade anymore I can decide to cancel the trade by clicking on the cancel trade button.
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This is how btc is bought using Ghanaian cedis on paxful.
Conclusion
Trading plays an important role in the cryptocurrency world.
Trading helps both the holder and the one looking to acquire some coins.
In my homework task I have displayed how cryptocurrency can be bought on an exchange and also explain some tools tradrs using when entering and exiting the market.
Paxful is a very user friendly platform as it is very easy to use.
Very easy to use as a beginner and a beginner can easily trade using the exchange.
Thank you.
Note- All screenshots are from paxful's site on google.