MY VIEW ON THE TWO MAIN TYPES OF CRYPTOCURRENCY TRADING AND THEIR ADVANTAGES AND DISADVANTAGES
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Good to everyone in this community and I hope we all slept well. I am @blissuju, a new user in this community and as a user who loves crypto I decided to opt-in to this community. for sometime now I want to talk a little about cryptocurrency but I was waiting to get vast knowledge on the topic I want to talk about and today, I am happy to let you know that I now have some information about It and I decided to tell it in this community. I did some finding to know which community actually supports crypto and trading so well and I got to realize that this community best suit it
Today I will be talking about the two main types of trading in cryptocurrency but before I do that, I will like to explain more about cryptocurrency and trading in other for us to understand where I am coming from.
Cryptocurrency is a modernized and a new era currency that function so well on a decentralized system that is based on cryptography in other for the system to be kept in good condition. also in cryptocurrency every activities that is related to this currency is undergo validity, therefore all activities are recorded and these records are kept intact. so the reason why this cryptocurrency works on a decentralized system is because it involve just the sender and the receiver, so the issue of a third party is eliminated and hence this currency can be sent to someone who do not know from a far location in as much as you both have agreed on a particular transaction.
With the cryptocurrency, people have actually see the light of day. we can also take a close look at the cryptocurrency when it all began in year 2009 and that was when the bitcoin came into existence, now take a close look at the bitcoin today. it is already at the top as though it is the first cryptocurrency to be introduced in the the whole wide world. I went to my working place and all the male staffs are talking about cryptocurrency and when I also chipped in my own side of view, they became surprised. they asked how comes I know so much about cryptocurrency and then I told them about this platform and how I have managed to earn some Steem and Tron cryptocurrencies. they became shocked and then I said to them what a man knows, a woman knows better and we all laughed.
Now my point is, cryptocurrency has really benefited people from date back to this moment and hence it is a currency that is well profitable although the value and price of cryptocurrencies can either increase or decreases with a short time and that depends in the market situation. now haven talked about cryptocurrency so well, let me get back to what I was saying initially.
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Now in a general sense, trading is the act or an activity that requires a buyer and a seller in a market. this is a situation where a buyer comes to buy goods from the seller at a particular price and in a specific time. now this is the definition of trading in general. so an average individual without cryptocurrency knowledge will think this when he or she is been asked what trading is provided for the fact that there is no proper description of the kind of trading one is talking about. now let us all get it straight.
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Cryptocurrency trading is the at in which cryptocurrency holders enters the cryptocurrency market to either purchase a particular kind of cryptocurrency or sell a particular kind of cryptocurrency. this activity is done in the cryptocurrency market where cryptocurrency traders come to buy or sell cryptocurrencies in other to gain profit. but this aspect do not just rely on the profit alone, there are losses involved too. especially when the market is not moving the way you predict it to move and as such it can give a huge loss to a crypto seller.
With this a buyer can enter the market to get a cryptocurrency from a seller who is ready to sell at a given price that has been set in the market for that currency. now the difference between crypto trading and other market trading is that, a sin crypto trading, one can spot a price at a very high amount and within seconds the price of that currency can fall down so well but in normal market trading, the price of goods can not just drop so well in seconds. the price can stay at a given figure for months and nothing is happening. so other goods do not just lose value the way crypto does, so that is a simple differentiation of the cryptocurrency and other type of market trading.
This is what I want to talk more about today. the two main types of cryptocurrency trading are the spot trading and the futures trading. in a normal market trading we can say that we only have one form of trading which is buying goods at a specific price and then sell it with profit, well this is quite similar to spot trading but then, yes there we do have other types of crypto trading but I will be talking about these two and I will be explaining them to the beat of my knowledge.
Spot trading can be pictured as a typical type of trading in which a crypto investor goes into the market to purchase some cryptocurrency in other to keep it and then wait until it rises in price and when the investor is satisfied with the value of the cryptocurrency at that given time he then sells it and take his profit with him or her, and again the investor goes back to get the cryptocurrency when it has fall in price value to repeat that aspect again. so this is what spot trading is all about. one can decide to get a cryptocurrency when it is at the lowest price and then returns back to the market to sell when it rises.
My friends do more of spot trading because it is safer, I equally have TRX which I got from creating content in this platform and my plan is to spot trade the currency so that when it goes up I can be in profit and save it for the rainy days to come. though the price is still small but there is hope that it will rise to it full potential.
Also, when doge coin came out my brother told me about it and got some doge crypto for me but unfortunately the currency is yet to pump more and as we speak I am already losing some money because I got it at a higher price and now the price is even lower than the rate I got it earlier.
Yes there are advantages and disadvantages to things in life and then cryptocurrency is not excluded. some advantages and disadvantages of spot trading are.
| ADVANTAGES OF SPOT TRADING | DISADVANTAGES OF SPOT TRADING |
|---|---|
| 1 - One advantage of spot trading is that, it helps to gain profit when you buy at a low price and sell at a high price in the market | 1 - There is no certainty if the price will increase or not since the price is not stable. |
| 2 - It helps to minimize lost of capital | 1 - one can easily lose funds when the price of the asset keep falling down. |
| 3 - It gives an investor hope and wait for the winning days | 2 - There is always doubt in the mind of an investor whether a currency will rise or fall more. |
These are the few advantages and disadvantages I can say for now and with the look of things unless a trader is ready for uncertainties, he or she will like the mind to trade.
Futures trading in my own understanding is the situation whereby an investor is trading a cryptocurrency against USDT which we all know as the dollar. and then the trader have decided to purchase a cryptocurrency at a given time and date with a particular quantity in times to come in the future. so with this aspect, and investor can choose to buy an a particular type of cryptocurrency either when it falls or when it is high.
Now you may be wondering why an investor should buy a cryptocurrency when it is high, this is because it is a future trade and it deals with prediction. a trader can predict a fall in price of a particular cryptocurrency because it has already pumped to a higher value and the investor may think it is the best time to place a sell futures order since the price has gone up and there may be a fall later. so this is a future prediction in price of a cryptocurrency. same thing also applies when a trader noticed a particular cryptocurrency has fall off so well and then that trader may likely to place a future buy order, believing that in a time to come, the cryptocurrency will rise in price and then if it does works that way, he will be in profit.
The rate of the advantage is equal to the rate of the disadvantage unless one is a good trader. my husband has lose so much money on the futures trading and also in forex trading too. and that has been the reason why he no longer trade anymore unless he go for an advance lesson in crypto trading. some advantages and disadvantages of crypto futures trading are.
| ADVANTAGES OF FUTURES TRADING | DISADVANTAGES OF FUTURES TRADING |
|---|---|
| 1 - It brings good return when the trade is successful | 1 - It can bring you to zero level when the trade is unsuccessful. |
| 2 - It can make an investor rich in a short while | 2 - It can make an investor lose all his money in seconds. |
| 3 - One can easily predict the market and make good entries in the trade | 3 - Predictions are not always right ad certain. the market can choose to move whatsoever direction it pleases. |
These are the few I know about futures trade based on my little findings. so we can see the advantages and disadvantages of futures trading in cryptocurrency market.
The two main types of trading in cryptocurrency like I said earlier are the spot trading and futures trading and I have also provided some advantages and disadvantages. for now I will only rely on spot trading because I do not know much about the crypto market. so if you are new to trading, I will suggest that you go for trading class before you start your trading journey so that you do not get to loss money just the way my husband did.
It is better to buy and hold your currency and wait until it rises then you can sell and take your money. I have seen a lot of colleagues, going into futures trading without knowing a single thing about it just because of greed and at last they end up losing all their hard earned money. so we need to be experienced before we begin a thing, have knowledge about it. do not trade with ignorance. thank you all for having me today, now I say bye for now.
Very informative article. You deserves some credit...
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Thank you so much @ozenozge for supporting my effort, I appreciate you ma.
Although there are several types of cryptocurrency trading but you have been able to figure out Spot and Ftuture trading. Cryptocurrency trading is another aspect of the crypto world which deals with purchasing and selling of crypto assets. You have presented it well over here and I’m glad to go through your content.
Yes you are right dear, there are other types of cryptocurrency trading but I specifically choose to talk about the spot and the futures trading. Thank you for reading my article.
Good evening sir, @engrsayful I have been active in the community but I haven't received support from the community sir.
We had a problem with our curation for last couple of days. Hopefully everything will be normal now. If you still face trouble feel free to create a support ticket in our discord server to discuss the issue. Thanks.
Thank you sir, I look forward to get support as i will continue to be active in this community.