#Burnsteem25 || Steemit Crypto Academy Contest / S3W4 – Cryptocurrency Trading by @simonnwigwe
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Greetings great steemians,
I welcome you to the last week of this season's engagement challenge. The season has been an interesting one so far with lots of interesting topics. This last week of the season has also come with a very unique topic which is Cryptocurrency Trading. This community's sole purpose is to ensure that steemians get a better knowledge of cryptocurrency and how to trade it.
I welcome you to the last week of this season's engagement challenge. The season has been an interesting one so far with lots of interesting topics. This last week of the season has also come with a very unique topic which is Cryptocurrency Trading. This community's sole purpose is to ensure that steemians get a better knowledge of cryptocurrency and how to trade it.
Discuss in your own words what is cryptocurrency trading? And tell us what type of trader are you or do you see it more effective? Justify your answers.
The word trading can be seen as the act of buying and selling goods and services. In the crypto world, we can define cryptocurrency trading as the act of buying and selling cryptocurrency. When the word trading is mentioned, we ought to know that it has to do with buying and selling of an asset. The buying of a crypto asset is known as taking a long position in the market whereas the selling of a crypto asset is known as taking a short position in the market.
Cryptocurrency trading is the process of buying or selling cryptocurrency in the crypto space whereby crypto can be bought or sold using fiat or using another crypto. Crypto traders are those responsible for performing this cryptocurrency trading in an exchange platform where these coins can be exchanged for other coins or can be exchanged for fiat.
Successful Cryptocurrency trading I.e the buying and selling of cryptocurrency is normally carried out in the direction of the trend. This means that you have to buy or sell your asset when the market is in your favour for you to make your gain. Counter trading I.e trading against the trend is normally very risky and hence it's not advised you are supposed to trade in the direction of the trend.
And tell us what type of trader are you or do you see it more effective? Justify your answers.
I'm a scalp trader and also an investor. I will be explaining these various types of trading in the next paragraph below. Traders are free to choose the type of trading they want to do and the one that is more suitable for them provided it helps them to maximise their profit and minimize their losses. The essence of trading is to make a profit.
▶Scalp trading: This is a type of trading where the trader seizes the smallest opportunity that comes as a result of the price fluctuation and makes a profit and exits the market immediately. This means that anyone performing this type of trade must be on complete watch of the price movement of the asset and since there is a little fluctuation in the price then the person takes that advantage to perform his trade.
▶Investor: Aside from taking advantage of the little fluctuations in the price of assets, another type of trading I do is acting as an investor. In this section, I buy an asset and hold it for a longer period with the mindset that the asset price will rise high someday and when that time comes I will be able to make more profit.
Both scalp trading and also holding the currency with the mindset that it will raise someday have been working perfectly for me. As a scalp trader, I only watch the price movement of the asset and when I see it going in my favour, I buy or sell immediately to make my little profit. Though the profit here is not much it is something. More also, over the years, holding assets has proven to be very effective for me. I don't just hold it and keep I also stake it so that it doesn't remain dormant in my wallet and most times when the prices raises to my test, I have already had more added to it.
Have you tested several time units? What Timeframe and Crypto Asset Pairs Are Best for You? Why?
Yes, I have tested several time units whenever I'm performing my technical analysis about any crypto asset. The time frame I have often worked with in my scalp trading is 15 minutes, 1 hour and 4 hours. Now, in most cases, I use the 15 minutes and the 1-hour time frame to make a decision. After viewing the market for this stated time frame, the next thing I normally do is to take my position.
The 1-hour timeframe is the best I use to finalize my analysis the reason is that while opening a position, I tend to give room to many eventualities and within the 1-hour time frame, all my expectation is seen. Since I'm a scalp trader, I'm also very careful about fake out. But with the 1-hour time frame analysis, my insurance on the analysis carried out is certain.
Source
The crypto pair that is best for me whenever I'm carrying out my analysis is the BTC/USDT pair. The movement of this asset normally controls the movement of other assets in the crypto market. So after looking at the movement of this asset in its 1-hour timeframe, I can go ahead to decide on the pair that I want to trade.
Most crypto-asset obeys the movement of this pair stated above hence if the analysis carried out shows that the price of the asset is going to move upward or downward, I will apply the same rule to the pair I want to trade believing that it will surely follow suit. This has been working for me as a crypto trader for a while now. So the reason I chose BTC/USDT pair as the best pair to carry out my analysis is that BTC always controls the movement of another minor crypto asset. If the price of BTC is going up, every other token goes alongside it unless on a special season like the altcoin season.
To acquire some trading experience, it is important to trade regularly. Have you had regular trading activity over the last few months? Tell us what you learned from this experience. ( eg: Over the long term, do your gains exceed your losses? Do you have a method of recording and reviewing your trades to improve your performance? refined your trading system after being dissatisfied with its results?)
The statement is very true. It is said that constant practice causes improvement. In the same way, when you trade regularly you get more knowledge about the movement of the asset. In the last few months, I have traded some tokens regularly and that has helped me to have a better knowledge of the crypto market.
Image from my Binance
As a scalp trader, sometimes I get stocked in a fake out and that has caused me a lot of losses. Though I don't stop because the more I trade the wider I understand the market. The screenshot above shows a spot trade I carried out recently where I acted as a market taker because there was a little fluctuation in the price of the asset and then I took the opportunity to place my sell entry.
This is an asset that has been on my wallet for a while so I needed to sell some I was looking for the slightest opportunity where the price will get to this level and the moment I saw that, I entered the sell.
Image from my Binance
Aside from this, the screenshot above also shows the asset I'm currently holding which I have staked also. Staking it helps the asset to be functional and then you get some increase of that particular coin or even a new coin. So these assets are the ones I have invested in hoping that with time the price will increase for me to make a lot of profit in it as well.
Looking at the staked asset, you will notice an increase (Cummulative Interest) in the coins already and whenever I wish to unstake it, the gain will be added to it. I have had a lot of new coins from staking assets like BNB and others. I have also had extra tokens when staking assets like SHIB, TRX, etc
Do you have a method of recording and reviewing your trades to improve your performance? refined your trading system after being dissatisfied with its results?
Yes, I have developed a method for myself to record and also review my trades in other to improve their performance subsequently. What I normally do is that before I enter the market, I try to jot down the price of entering that is the price I use for the purchase of the asset and also when selling the asset, I also write down the price I use to sell the asset in this way I will know if I have made a profit or a loss.
Another thing I do often to improve my trade is that before caring out my trade on a certain coin, I will check the price movement of the asset for the last one week and then see if there is a similar movement previously and if there is, I will use the outcome of the previous movement to perform my judgement on the current move. Most times these movements are repetitive and that has helped me a couple of times to make a proper decision. Though so times it fails as the movement may take a different turn completely.
What impact does artificial intelligence have on crypto trading in the short and long term? Have you used before or want to handle an automatic trading robot? Tell us the causes of your choice.
The impact of artificial intelligence (AI) on crypto trading in both the short and long term I.e both buying and selling of the crypto asset is to maximize profit and minimize loss. We know that the main essence of trading is to make a profit but the loss is inevitable. Hence to be on the safer side, AI is used to automatically perform trade at a suitable time. Having the stop loss and take profit position are all functions of AI.
Here in this instruction, you tell the system if the price gets to a certain level, the asset should be sold to stop you from losing much money and thereby exiting the trade. More also, a target to which you want to attain is also set so that if the price reaches that point it takes a profit.
Now, robots are implored to perform some of these trade functions for us because we can not monitor the price movement at all times but a robot can be designed for that purpose only. These robots help to perform faster analysis and then tell you the direction of the trend, it also serves as a watchlist that keeps track of your favourite coins and then notifies you when there is a spike or decline.
I have little experience with robots since I started trading because I want to believe that setting stop loss and take profit are all part of AI in action. I also have a watchlist where I get notifications regarding the movement of some selected coins of mine. In this way, I can say I have had a little experience with AI.
Conclusion
When we talk about cryptocurrency trading, we are referring to a situation where we buy and sell crypto assets using fiat or other crypto. There are many ways of trading and different time frame that can be taken into consideration. Crypto trading is aimed at maximising profit and minimizing loss. Every trader wants to make a profit but it is also good we understand that in trading, the loss is inevitable.
Through the content of this publication I have been able to obtain and assimilate many important ideas to implement when deciding to start in the cryptoactive market, Thank you for such a valuable contribution. I hope you have many successes and greetings.
I'm glad that the content was helpful, i wish you the best when you start your crypto journey my friend.
May God hear and the angels say Amen. Thanks for the good wishes. a big hello
Truly practice makes perfection, the more we do our analysis and trade in the cryptocurrency market, the more we understand it better. I'm also an Investor, I hold an asset that I know has the potential for a long even though some of it has been dumped, I do not sell them in panic but rather hold them till it rises in the future. Thank you for sharing.
Thanks for your comment and contributions
Waooh I am happy that you are also a scalper trader which I prefer more than any other type of crypto trader.
I think I will also consider going for an investor where I can hold and staked my asset to earn some percentage as my rewards. Honestly you have written so well thank you for the post you have shared with us.
Thanks for your comment and contributions my friend
Scalp trading for me is very tedious. It involves a lot of hard work and can be quite deceiving. It can be very advantages but I just feel with the very time frames the indicators can pick up a lot of false signals.
Thanks for sharing.
Thanks for your comments and contributions my friend.
I do not now a lot about trading. Your post has opened up a bit of my insight about it. Good luck for the contest. I have never participated in a contest organized by the Steemit crypto academy team. It looks interesting to follow.
😊😊😊
Thanks my friend for your comment and contributions. Truly the academy is quite interesting, you should consider joining in the next season.
We never really know when will it be the trend direction. Of course with these crazy markets for sure we must be careful and put the proper stop loss by making a good management of risk ratio.
You are right my friend, taking into consideration proper management is the only way to success in the unstable crypto market.
This type of trading needs a very strong background of technical analysis in order to be done perfectly. I would advice beginners in cryptocurrency trading to stay away from it until they are better in technical analysis.
Thanks for your comment and contributions my friend
Well, you are right, lower timeframe charts seems to always gives fake movement, and as well there are time when spikes could mislead traders and led them to a trap, I believe with 1hr frame, you get to see real time movement and hold your position for long.
Thanks my friend for your comment and contributions
Short trading times are for me very stressful, you have to have nerves of steel, but there are those who prefer it, they are people of very controlled emotions.
The idea of studying first before entering the market, is to minimize the probabilities of losses, in any case, the gains should be greater than the losses so that we have a balance in favor.
Greetings.
Thanks for your comment and contributions my friend