An essential Guide to Cryptocurrency Trading?
Any company can design and manufacture a product in one country and sell it to customers in another, or a company in one country can be the distributor for an overseas product. Platforms bit-indexprime.com offer numerous trading options and help you start your bitcoin trading journey without any dedicated training. In addition, many countries’ currencies are pegged to the US dollar, which makes it difficult to predict their price movements (to the extent they have any).
Cryptocurrency trading bypasses this problem by directly connecting buyers and sellers. Additionally, most of these transactions are based on blockchain technology that records every step of each process transparently, securely, and quickly.
The result is an efficient marketplace with low transaction costs where you can buy bitcoins/altcoins right from home with complete confidence. Cryptocurrency trading is not merely helpful in easing the global exchange but also accounts for a real passive income or active income depending upon skills and knowledge in the digital currency market. Let’s discuss an essential guide to the cryptocurrency market.
What is fundamental analysis (FA)?
The fundamental analysis revolves around examining and analyzing the market for investors to achieve tremendous success. In this regard, investing in cryptocurrency can also fall under fundamental analysis, particularly when it comes to day trading cryptocurrency.
Rather than basing your investment decisions solely on news headlines, reports, or opinions that may or may not come true, it would help to look at each coin and its future potential before you commit money to it. The problem with traditional stock markets is that they are overhyped by mass media outlets that are not held accountable for their claims. As a result, the market shapes itself, and the price reflects the market’s needs.
On the other hand, cryptocurrency markets are based on decentralized technology. It simply means that no single person/company controls them. As a result, the number of coins here is vast, as well as their inherent value when used universally.
Because an individual or group cannot control this fee with a vested interest in influencing demand or supply, entering this trading market requires investors to have a solid understanding of cryptocurrencies’ statistics and fundamentals.
What is technical analysis (TA) in cryptocurrency trading?
It is another way to look at the market that provides a unique perspective that is not based on news headlines, reports, or opinions from other investors. Of course, technical analysis has its roots in stock markets, but investors in the cryptocurrency market can also use it.
For example, an investor’s first step should be to study and analyze each coin’s blockchain technology and how it enables cryptocurrency transactions. It is essential because it will provide important information about how fast each coin can process crypto transactions.
What is a cryptocurrency trading strategy?
A cryptocurrency trading strategy combines technical indicators with fundamental analysis to ensure that the individual understands cryptocurrency prices. The aim is to create a long-term plan for the investor’s capital allocation.
A cryptocurrency trading strategy should be based on specific data of the coin that investors wish to invest in or off-load from, such as its market cap, price history, and address details (which are (cryptocurrency exchange) wallets). A trading strategy should use combinations of these variables to arrive at an investment decision, which will act as a risk assessor when choosing whether to buy or sell the cryptocurrency.
What is a cryptocurrency’s long and short position?
A cryptocurrency long position refers to an investor buying a particular cryptocurrency to sell it in the future when its price rises. It is possible by holding onto the coin for some time waiting for its market value to increase, or using leverage trading to profit from price surges and drops. This trade is also known as an ‘assume-the-risk’ trade. A short trade is when an investor sells specific crypto before repurchasing it later, thus profiting from the downswing in prices.
What is cryptocurrency swing trading?
A swing trader assumes the role of an investor who looks for short-term rises and falls in the price of cryptocurrencies. They are also interested in the overall trend in cryptocurrency markets and look to take advantage of bullish and bearish trends.
Swing traders usually use technical analysis indicators such as moving averages, Bollinger Bands, Fibonacci Retracements, Support, Resistance and Trends lines, etc. to make better decisions based on price history data uptrends/downtrends, and support/resistance levels.
What is slippage in cryptocurrency trading?
Slippage refers to the price differential between buying and selling. Slippages commence in crypto markets because you can only buy or sell one cryptocurrency at a time. With more cryptocurrencies, the spread gets broader and narrower
