Crypto Academy / Season 3 / Week 1 - Homework Post for @lenonmc21

This is Season 3 Week 1 of Steemit Crypto Academy and I'm writing Homework Task for Professor @lenonmc21

Define in your own words what trading is, what its function is and how it relates to the cryptocurrency market.

Trading is the give and takes of any financial asset, be it a currency, commodity, action, or cryptocurrency. The function of trading is to increase one's investment. A simple example would be that you buy an asset at $2000 and then sell it at a higher price, say $3000. Thus, you generate a profit. Sometimes, you can trade your asset for a higher-priced good as well.

Cryptographic trading is also very similar to regular trading and involves the buying and selling of cryptocurrencies. However, the main difference between fiat currency trading and cryptocurrency trading is that cryptocurrencies are much more volatile. Thus, it implies that the cryptocurrency market is not stable and the prices of digital currencies rise and drop at a highly unexpected rate.

As I mentioned above that the process of buying and selling anything is called trading and in cryptocurrencies, buying and selling crypto assets called cryptocurrency trading.

Why we need to trade crypto? There are many reasons, some wants to buy a service or something and for that they need to pay in specific coins to buy that service, this is the reason people buy and those coins. On the other hand, there are some holders who think that the demand of a specific coin will increase, that's why they buy and when demand increases, they sell their assets to get huge profits. This is trading and this is how it relates with cryptocurrency market

Where we can trade crypto currencies? As I mentioned above that many people wants to buy some specific coins for different reasons. To keep in mind this need of investors, many crypto currency exchanges, markets or platforms were introduced like Binance, Bitterx etc. where Investors and traders can do the trades and buy/sell their crypto assets

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 ).

To master the technique of trading, a person must be able to predict the price of the cryptocurrency shortly so that you can sell or buy the currency as required. Many people used to see graphs of crypto assets from different websites but I prefer using trading view platform for graphs. Thus, to predict the future price movement two analysis techniques are used:

Technical Analysis

There are plenty of characteristics involved in this technique that helps us to identify the upcoming prices. In basic words, through this analysis technique, we can monitor the behavior and action of cryptocurrencies that will help us predict the price movement. One of the most popular techniques is the Japanese Candles.

The graph below is the technical analysis for BTC. The red candles symbolize that price is expected to go down and, red symbolizes that price is likely to increase. As you can see in the graph below, the price of BTC is expected to decrease indicated by the red bar graph.

In the technical analysis, The exact time to enter in the market is when the market starts making uptrend. Do not invest when market is in down trend or the volume is decreasing. Yes, If market starts making uptrend after a down trend then this is the positive signals and we can enter in the market to get some profit and

Fundamental Analysis

The price of cryptocurrencies is also affected by the news circulating about them. Fundamental analysis which sometimes people refer to as 'macroeconomic analysis', focuses on this circulation of news to predict future prices. The use cases of cryptocurrency projects are regularly updated. Thus, if there is a prediction that the price will rise then, the use case will be good and positive. Similarly, if the prices are about to decrease then, the use case will be negative.

There are several factors to consider while performing fundamental analysis. We need to look at the market cap, competition, trading volume, price history, social signals and much more. Below are the market stats of BTC.

Moreover, The fundamental analysis help us to take decisions that when to enter in the market. Like, If a most famous person, celebrity or influencer talks in the favor of a specific coins then the chances that the price of the same coins will go up. Same in the case if they give negative comments about the coins and price will go down.

Furthermore, In doing Fundamental analysis, we should also focus on the project/ company or coin in which we are investing. What is their aim and what new initiatives they are taking for this particular project.

Example

Here is an example of Tesla's owner Elon Musk, he tweeted about Bitcoin that Tesla is now accepting bitcoin as payment and you people can now buy Tesla with Bitcoin and prices of Bitcoin jumps on that day reached all time high of $65,000.

Those who invested after seeing his tweet got huge profits but those who made entries late when Bitcoin was already at $64,000+ had to bear losses after Elon Musk tweet against the Bitcoin.

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 ).

1. Huobi Global
2. FTX
3. Kraken

Huobi Global

It is ranked second after Binance in terms of market volume. The process to buy cryptocurrency in exchange for fiat currency is very simple. You will see a buy crypto option in the header, and as soon as you click it, you will be redirected to the 'quick buy/sell' page.

You can select your fiat currency and enter the amount. You can also choose the cryptocurrency that you want to buy and, the amount of cryptocurrency that you will receive will be shown automatically. Choose your payment method and click on 'Buy BTC'.

A confirmation message will pop up on the screen. Once you confirm the details, the transaction will complete.

FTX

FTX is also one of the leading platforms that has got one of the highest market volume. Once you sign in to your FTX account, you will see a home screen as shown below. Here you will see a header with several options.

Select ‘wallet’ because first you will have to fund your account. If you have just signed up then you will also be asked for verification where you provide you personal information, contact details and ID card information.

When you open your wallet, you will see a list of cryptocurrencies with information like balance etc. From here you have to select the currency that you own and wish to transfer to FTX for the purpose of funds.

You can also choose your fiat currency such as USD. Once you deposit money, you can click on the cryptocurrency you want to buy by entering the price, type of market, and other relevant information. Finally, click on ‘place order’.

Kraken

The third most famous trading platform in terms of market volume is Kraken. The procedure for buying cryptocurrency from this platform is that you need to sign in first. Now you will have to deposit some cryptocurrency or fiat currency to fund your account. Now you can use these funds to buy cryptocurrency.

It was a great lecture delivered by professor, Although I knew many things already but still after doing this task One can learn about trading and crypto currency market, Technical and fundamental analysis as well as the students will get to know about the most famous Crypto currency trading platforms (exchanges) where they can buy and sell their crypto assets.

Thank You!