How to trade cryptoassetssteemCreated with Sketch.

in #trading3 years ago (edited)

There are some basic concepts to know:

1) Know your market:

The cryptoassets world is pretty funny. Is very volatile but also is very predictible.

The crypto world follows the same rules of the stock markets but is much  more "innocent", its traders are much more naive and predictable, so  you can more easily estimate their supports and resistances.
Now, since January is in a strong bullish cycle, so there are two ways  to calculate the target prices: through its total capitalization or  through its price in relation to bitcoin. The dollars are not very  useful to assess your success. You need a stronger reference: the BTC.
The first, then, is to know your market and there are three places to start investigating interesting assets:




I follow basic rules, if I investigate an asset related to the transfer  of purchasing power, I use a maximum of 10-20% of the daily FOREX market  to calculate the maximum capitalization and estimate the possible  maximums.

If I research an asset related to Internet of Things (IoT) I think of a maximum of 15 trillion in three or four years.

The same applies for assets related to bets, social content, etc.

Soon you will see that cryptoassets are a not so big world, but related  to specific things of consumption, especially those that require a  controlled and reliable accounting, or the use of data for EVERYTHING.

2) The intrinsic value of your assets:

This aspect is fundamental, the cryptoassets, unlike other assets must have certain unique characteristics:

a) They must be safe. That is, the resistance to being modified,  deformed or altered. Bitcoin has become so valuable because it has  proven that neither miners, developers, nor large investors can modify  its DNA. But bitcoin is just the tip of the iceberg, there are many  other safe assets, with an unbreakable cryptographic architecture.

b) Scalability. It is the Achilles heel of Bitcoin and Ethereum.  Scalability refers to its practical use in everyday situations, ie how  easy you can transfer those assets at the lowest price, is a  relationship between the speed and security with which your asset is  transferred.

c) Fungibility: That is, the ability to replace an asset of the same  nature with another of the same nature. For example, an ounce of gold  can be exchanged for an ounce of gold without any problem, they are  identical, indistinguishable. On the other hand, bitcoin is not. Suppose  you acquire a bitcoin: it is possible to trace the origin of that  bitcoin and know what it was used for -to buy drugs, to launder money,  etc-; that is to say that there is a trace in the bitcoin.
Instead there are other assets that it is virtually impossible to know  in what or how or where they have been used without implying that it is a  triple entry accounting asset that can be confirmed in the blockchain.

Which brings us to the most important feature:

d) Triple Entry Accounting: The triple entry system allows you to verify  that there is no duplicity, that you do not incur a double expense and  makes the system extremely secure. VISA and Mastercard have good  scalability and can be very safe, but they are still centralized and  therefore easily subject to manipulation by bad actors. With  cryptoassets this risk is diminished in an infinite way. The third  counter is, of course, the ecosystem -that is, anyone who decides to  have the account book on their computer and lends the power of their  computer to verify that security (ie the miner or the stakeholder).

The greatest triumph of the cryptoassets is to keep the accounts in the  public domain and make it inviolable. This has been achieved by:

1) Domain public software.
2) Universal mathematical rules.
3) Global distribution of the Proof of Work and Proof of Stake.

How to know these characteristics:
In github you can, if you know programming, check the  code. But since we are not experts in programming, just read the  specialized people.


e) The economic model of the asset:

Inflationary or deflationary.
The distribution of assets.
The generation of assets.
Its scarcity or abundance.

3) Where to exchange your assets:

Here there are many options and it depends on where you live. Most  platforms have a decent trading software, but if necessary there is a  fairly complete one called to do technical analysis.

*I posted this as treath in Trade2Win:

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