Learn the Trading #1 - Introduction to the trading of cryptocurrencies
Hello all,
This article is the first one of a series of publications that I'm going to write on the topic of crypto-trading.
I'm convinced that the trading is not fit for everyone because it requires to be able to control your emotions. Nevertheless, for people desiring investing themselves in this domain, it is very well possible to generate a nice complementary income.
Why only complementary ? Because if you hope trading for living from it, it will generate an extreme pressure onto yourself. Indeed, each month you have to pay your charges, food, housing ... What would happen if one month you didn't make any benefits, or even worse, if you lost money (yes, this happens...) ?
Personally I use the trading to create extras for myself, but I never rely on it for living. This allows me to disconnect from any pressure that comes when a trade doesn't start as I imagined it ...
What is trading ?
Trading corresponds to the action of buying and selling financial products, in this case cryptocurrencies. The goal of these purchases/sales is of course to generate profits on most of the operations. It is very well possible to win money in both directions, meaning if a price increases or when it drops. I will explain you the methods in further articles.
How to start trading cryptocurrencies ?
Many "Exchange" sites allow cryptocurrency-trading. I list you here some of them, but it's your own responsibility to check how serious each of them is, and to make your own choice knowingly. Indeed, never forget that these platforms hold your cryptos, and so, your money. Most of these sites aren't regulated, so in case of issues, don't expect the same warranties as with banks.
• https://www.kraken.com/
• https://www.bitstamp.net/
• https://www.bitfinex.com/
• https://poloniex.com/
• https://bittrex.com/
Type of trading
Two ways of trading exist, two ways of thinking :
Fundamental Analysis
You will analyse the project of each cryptocurrency, the technology, the development team, and any other aspect that you judge useful. With these information you will then bet on a price drop or increase of the concerned cryptocurrency.Technical Analysis
With this technique you don't need to know the currency you negotiate. You will analyse charts (graphs of the currency market price evolution) in order to detect the patterns announcing growing or dropping movements. This technique could appear abstract to you, but I can assure you, that if you master it well, this technique is very powerful. It is surprising to see how certain graphs translate in 95% of the cases really to the expected well defined movement.
Personally I use this last technique and with my future articles, I'll attempt to reveal you the techniques and hints so that you too can become profitable.
Time scales
There are 3 big time scales used for trading :
Scalping
The scalping consists in speculating on the very small variations of the crypto market price in a very short timeframe of a few minutes.Day trading
As the name indicates already, the day trading consists in speculating a cryptocurrency throughout the day, up to maximum the day after, rarely more.Swing Trading
In this case you take a fix position over several days or weeks. You can call this scale as well the long term trading.
The use of one timescale doesn't exclude the others. Personally, the majority of my transactions are of type scalping. This means that I buy a cryptocurrency upon a signal that I detected in a technical analysis, and I resell it a few minutes later. However I'm active also on some currencies for the long term. I keep these cryptocurrencies in my wallet for several weeks or even months depending on the potential they represent.
I'm currently fully busy writing the articles about the trading topic. So don't hesitate to share with me the topics of your interest in this area that you would like me to address. I can't promise you to cover everything but I will try to reply as much as possible to your questions .
Take care,
CryptoPassion.io
Version française ici : [FR] Trading #1 - Introduction au trading des crypto monnaies
Very good post @cryptopassion!
I like that you think it should only be a supplement to the income.
I see a lot of people who can't handle the pressure of fluctuating markets and profits.
This is indeed mistakes than lot of traders do.
And I did it also at first, this is why I'm warning perople about it.
Thank you for your comment.
good
It sounds cool. I'll be following and looking forward to the articles!
Will you be addressing things like minimum viable amounts to start trading with and so forth as well for us complete beginners?
Hello @rahvin84
Thank you for your comment. I will add the topic about the amount on my list so. To already answer you, there is no real minimal amount with crypto as you can buy and sell 0.01 unit on most of them. So yeah on Bitcoin it is still an important amount for some people but in that case you could buy part of Ethereum by example.
Regarding the fees of the exchange, it is always a percentage of the amount traded, so a very small amount isn't a problem either, you will pay also a very small amount of fees.
Thanks for the tip! I've been messing around on HitBTC a little bit with the $2 I've made pool mining so far but it's pretty much just gambling so far... I read on /r/monero that HitBTC is a scam though? Do you know anything about that and would you recommend a particular exchange above the others?
I don't know at all about HitBTC. The exchanges that I listed upper have a very good reputation. Now it depends how you will trade. For the scalping, my favorite one is Bitfinex. I like their interface and tools. For long term holding trades that you want keep on an exchange (always dangerous), I use kraken for most of them and sometimes Poloniex.
I've heard that you should never hold too much in an exchange. Hackers be hacking... Merci monsieur. I look forward to your posts.
For sure, this is why I said it is dangerous. Bitfinex for example has been hacked 2 times. They have reimbursed their clients but for sure you have to keep in mind that it can happen and it will happen again. So always be careful with exchanges and keep only money and crypto there that you need to keep for your trading, no more...
Congratulations @cryptopassion! You have completed some achievement on Steemit and have been rewarded with new badge(s) :
Click on any badge to view your own Board of Honor on SteemitBoard.
For more information about SteemitBoard, click here
If you no longer want to receive notifications, reply to this comment with the word
STOP