Understanding Spot Trading in the crypto market
Hello friends,
Today is a great day again for us to learn about spot trading, which is the easier way to invest in crypto and other financial markets. Anyone who is entering the crypto market for the first time invest in crypto through spot trading. For example, if you were to invest in Tron (TRX) you would like to buy at the market price than waiting.
In this post, we are going to learn more about spot trading in the crypto market.
Spot trading in the crypto market is simply the process whereby a trader buys and sells cryptocurrencies at the current market price with the motive of making a profit.
In simple terms, it is when you are buying or selling cryptocurrencies using the market price. It is an easy means of trading that doesn't require you to carry out some technical analysis before entering the market.
Most spot traders usually buy cryptocurrencies at the market price and sell them for profit. In spot trading, if you are okay with the current market price of the coin you want to buy, you will just enter the amount of Coin that you want and click on Buy after selecting the pairs. After clicking on Buy, your order will be triggered immediately since you are buying on the spot.
| Where to carryout spot trading |
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There are many ways to trade crypto on the spot market, and we are going to be looking at some of them as shared below.
- Centralized Exchange
- Decentralized Exchange
- Peer-to-Peer
- Over-the-counter (OTC)
- Centralized Exchange
A centralized exchange is a type of exchange that offers users many features, such as an easy means to deposit fiat currency, which can be used to buy cryptocurrencies. It also allows users to deposit crypto from other exchanges, which can be traded for another or stored in the exchange.
- Decentralized exchanges
A decentralized exchange is a type of crypto exchange that offers users the opportunity to have access to crypto without the help of third parties. In this type of exchange, users are allowed to trade crypto directly from their wallets without looking at third-party risk. However, the decentralized exchange seems more complicated than centralized exchange.
- Peer-to-peer (P2P)
This is the kind of spot trading that allows crypto traders to trade among themselves with the help of a system known as Escrow. P2P gives crypto traders control over their trading activities without the involvement of third parties since a trader can choose who he or she wants to trade with.
- Over-the-counter (OTC)
Over-the-counter (OTC) trading is a type of crypto trading that involves two parties that are separated from the crypto exchange. In this type of trading, the two key parties are the Dealers and Brokers that act as market makers, whose work is to quote different prices of cryptocurrencies they want to buy or sell.
Conclusion
The crypto industry has grown so large that there are more than hundreds of crypto exchanges that allow users to buy, sell, send, and store their cryptocurrencies on the spot, as we have learned in this post. This post is written by me after carefully studying the post link below.
Reference
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Everyone Should need to read this Understanding Spot Trading in the crypto market article.
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