Tutorial: Trading Using The Internal Currency Market

I believe that the Internal Currency Market in Steemit to be under utilized. There may be a few reasons for this. One is that not a lot of people know about the functionality, some users may be shying away thinking that the process is too complex, and some people believe that trading may be risky. This tutorial aims to show how simple it is to access, and use the Internal Currency Market. I will also present a couple of trading strategy that may help get more users to be comfortable in using the feature.

1. Accessing The Internal Currency Market

A. Use The URL

The quickest way to go to the Internal Currency Market is to type or copy and paste the URL

https://steemit.com/market

B. Through The Hamburger Menu

• Click on The Hamburger Menu in the upper right hand corner

• Click on Currency Market in the pop up Menu

• It will bring you to the Internal Currency Market

C. Through Your Wallet

• Click on your Profile Picture in the upper right hand corner next to the Hamburger Menu

• Click on Wallet

• Click on the Carrot (drop-down menu) next to Steem, then click on Market

• It will bring you to the Internal Currency Market

2. Submitting A Buy/Sell Order

A. Important Sections of The Market

• The box labeled with #1 shows the:

Buying *Price. This is defaulted to the lowest ask. This can be edited to the price you wish to buy Steem with.

When buying, you will have to indicate the amount of SBD you are willing to spend in the field next to Total.

The Amount of Steem will automatically be populated depending on the amount of SBD you will buy with.

• The box labelled with #2 shows your available SBD
• The box labelled with #3 shows the highest bid
• The box labelled with #4 shows the lowest ask
• The box labelled with #5 shows the spread in percentage between the highest bid and the lowest ask
• The box labelled with #6 shows the trade history. At the time of writing this post, it shows the trade history for the past eight hours.

B. Steps In Buying/Selling

• In this example I typed in a buying price of .90 SBD for every Steem. It is important to note that .90 does not mean I am paying $0.90 for each Steem. This rather is based on SBD/Steem conversion.

• In this example I am buying Steem with all my available SBD (52.741)

• If my buy order is fulfilled, I will get 58.602 Steem

• After clicking on the BUY STEEM button, I got a confirmation pop-up shown below.

• After clicking on the Ok button, I got a pop-up asking me to sign in.

• Because this is a financial transaction, I signed in using my active key.

• After clicking on the Sign In button, you will get a confirmation that the order's been placed, and the unfulfilled order will show in the Open Orders section as shown above.

• In SteemD, the order will be shown like in the photo below.

Because the buying price I used to create the order is extremely lower than the other bids, getting this ordered fulfilled any time soon is very unlikely. There's currently 1200 SBD worth of Steem orders whose bids are higher than mine.

To cancel the order, simply click on Cancel link in the Open Orders section, confirm, and sign in.

The process in selling Steem in the Internal Currency Market is very much the same as buying. Except that when selling, you will have to indicated the Amount of Steem you are going to sell, and the Total SBD equivalent depending on the indicated selling Price will be automatically populated.

3. Trading The Spread

In the picture below, I placed a buy order and a sell order of equal amounts (140 SBD) in red boxes. This is an example of trading the spread. By doing this, the trader makes .55% for each fulfilled order. This is often being done multiple times a day. By doing this successfully ten times a day, the trader will make 11% on his capital. This kind of trading are time consuming and are most likely being done by bots.

4. Trading The Range

In comparison to trading the spread, this is a longer term trading strategy. I spent a few days observing the range of the internal market to be between 0.87 - 0.97. With that range, there is an opportunity to gain 10% if you are able to time the market perfectly. This means buying at the absolute low, and selling at the absolute high. Doing that is not easy however, so instead of trying to perfectly time the market, I bought the dips near the low, and sold near the previous high. By doing that, I was able to make 5.73% profit in four days. You may say that 2.48 SBD may not be worth that effort. This process can be scaled however, which I intend to do. I just want to spend some more screen time observing the internal market. By scaling this one hundred times, there is an opportunity to make 248 SBD by following this strategy.

There is risk involved in trading, nobody knows for sure which direction the market will go. It is best to device your own strategy based on your own observation and risk appetite. This tutorial was created to show people who will read it, that other than through author rewards and curation rewards, there is money to be made using the Internal Currency Market.

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Posted on Utopian.io - Rewarding Open Source Contributors

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