Crypto Academy / Season 3 / Week 1 - Homework Post for [@lenonmc21]||Cryptocurrency Trading

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INTRODUCTION
Trading has been an age long activity all over the world.Even our fore fathers were also involved in trading back then.Trading is one human activity that would never end.

In a general term, trading involves buying and selling of goods and services.Cryptocurrencies can be traded too.

QUESTION ONE
What is Trading
Trading is simply the buying and selling of goods, products and services.The buying and selling of cryptocurrencies is know as Cryptocurrency Trading.
Trading Cryptocurrencies can involve making profit and running into loss too.It is important to note that cryptocurrencies are highly volatile.

Trading Cryptocurrency involves two basic activities:
•Buying Cryptocurrencies.

•Selling Cryptocurrencies

Buying Cryptocurrencies
Buying Cryptocurrencies involves using fiat(local currency) to buy the crypto of our choice,this means that the fiat is converted to cryto through a crypto exchange platform.
Alternatively,one can buy cryptocurrencies through Peer-to-Peer which is a situation where a buyer sends fiat to a seller,and the seller sends the crypto directly to the buyer.

Selling Cryptocurrencies
Selling Cryptocurrencies involves converting our crypto to fiat and then moving it to our bank account.
Selling Cryptos can also involve sending our Cryptos to another trader(buyer) in exchange for money.

Functions of Trading
•Trading makes goods and services available to buyers,sellers and consumers.

•Trading is a means of amassing profit.A trader can buy a commodity at $1000 and then sell it at $1500 and so has made a 50% profit.

•Trading helps to increase or decrease prices of goods.If a particular commodity is in high demand,the price will automatically climb up.

•Trading is a means of solving problems because you can buy a service or commodity that will help to solve problems that are prevalent.

Importance/Functions of Trading Cryptocurrencies

•Trading Cryptocurrencies is one of the best ways to make huge profits within a short time.
For Instance,making proper analysis (technical and fundamental) will help a trader to know when to buy (at a low price) and when to sell(high price) to make huge Profit.

•Trading Cryptocurrencies is also a means of increasing the value of a coin.For example,if many people continue to trade STEEM,it would make STEEM to become more popular and so it's value would increase.

•Trading Cryptocurrencies is a means of employment.In Nigeria,there are lots of youths that their business is solely buying and selling of cryptocurrencies.

How does Trading Relate to Cryptocurrencies

Just like trading involves buying and selling.It cannot be mentioned without mentioning profit and loss.Sometimes a trader buys at a low price and sells at a high price(profit) or vice versa(loss).

Also one can buy a crypto at a low price (accumulation phase) and sell at a high price(distribution phase). Although, sometimes the trader can buy at high and will be forced to sell at a loss due to the volatility of cryptocurrencies.

QUESTION TWO

•Technical Analysis
This is a process of using graph, charts,candles and other statistical tools to predict the future price of a crypto asset.

This method involves studying the market trends,and then using it to know when to enter and when to exit the market.Infact Technical analysis,entails using historical facts to predict future prices.This would help the trader to know there is Support and when there is Resistance.One can check the charts of any cryto for the past hours,days, weeks,months and even years.

Technical Analysis on bitcoin

Tools Used for Technical Analysis
•Price Chart
•Bar Chart
•Candlestick
•Indicators

Fundamental Analysis
This is different from Technical Analysis.Fundamental Analysis is a process making trade decisions or predicting the price of a crypto using factors such as the utility of the coin,it's whitepaper and various news about the coin.
For example the price of Bitcoin dropped when Elon Musk said that he won't be accepting bitcoin for Tesla,this news affected the price of bitcoin.Also news from newspaper and other media houses affect the price of Cryptos.

Fundamental Analysis of Steem

If a coin,has a great utility,it would also affect how people value the coin.

Tools for Fundamental Analysis
•Whitepaper of the Coin.
•Team
•Utility of the Coin
•News

QUESTION THREE
Cryptocurrency Exchanges
Cryptocurrency Exchanges are platforms where one can trade Cryptos.A Cryptocurrency Exchange is like a market place where you can but,sell and store crypto.Basically,every Exchange has a wallet where you can store your crypto assets.

Top Exchanges With The Highest Trading Volume
•Binance
•Coinbase Exchange
•FTX
•BitMart
•Kraken

Screenshot from CoinGecko app

COINBASE EXCHANGE
It is ranked the number two in the list Exchanges with the highest trading volume.It is just below Binance in the trading volume.

COINBASE EXCHANGE allows traders to buy,store and sell cryptos with ease.A trader can make profit by buying coins on Coinbase and then selling it when the price goes up.

How to Buy on Coinbase Exchange
•Log in to you Coinbase Exchange app.
•Click on the blue circle below

•Click on RECIEVE

•If you intend to buy BTC,then copy the reciever address and send it to the sender.

•Alternatively,click on BTC to access other coins.

•I Select DOGECOIN and I copied the address.

•I sent it to the sender,and then DOGECOIN would be sent to the address.

CONCLUSION
Trading Cryptocurrencies requires proper market analysis and approach to avoid losing our investment.Trading if cryptocurrencies takes place in crypto Exchanges.

Thank you professor @lenonmc21