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Cryptocurrencies trading

Your capital may be at risk. This material is not investment advice.

Cryptocurrencies have been a hot topic for the last few years. Businesses, governments and the general public from any part of the world are always eager to debate over cryptocurrencies. Some are saying it is a different form of currency and some have a view that it holds value like dollars and euros. Most people have heard the word cryptocurrency but not all know what exactly it is.

This article is aimed to remove the confusion about cryptocurrencies and after reading it, you will be able to understand the basics of cryptocurrencies, how you can get them, and what advantages they hold.

Cryptocurrency is a kind of virtual or digital currency which allows you to make online purchases. Unlike the conventional currencies, cryptocurrency is online based and is not controlled or backed by any governments and banks. It is decentralized and maintained through a digital network instead of a company or single person. A digital wallet is used to store the money owned by you which you can keep offline on your PC or in a cloud. If you want to transfer this currency to someone else, you can easily do it with the help of a mobile device or a computer. The record of every transaction is present in blockchain and it is available publicly to all the currency holders.

How to get cryptocurrencies?

One way to get cryptocurrencies is through mining. It is performed with computers, where a complex math puzzle (hash) is required to be solved. People from all over the world compete to get the hash solution at the earliest and the winner is awarded the specific amount of mined cryptocurrency. This process requires special hardware which is capable to run round-the-clock.

Mining is not the only method of getting cryptocurrency. The simplest method is to purchase them through an online marketplace. Here, you will also be allowed to sell them whenever you wish. You can use your domestic currency to purchase them, just like you purchase gold and stocks. Cryptocurrency’s value is influenced by the demand and supply and keeps fluctuating every time.

Advantages of cryptocurrencies

The prime advantage of cryptocurrencies is anonymity. Although every transaction is digitally recorded and publicly displayed, no one is required to share their personal information like the complete name or address while receiving and sending payments.
The business done with cryptocurrencies has a benefit of being economical. Although little fees may apply, it is insignificant and very less than that charged by different financial institutions and banks. Moreover, physical currencies can be counterfeited but cryptocurrencies can’t be faked.

The biggest cryptocurrency

The world’s most famous and biggest cryptocurrency is Bitcoin having a global user base of millions. It came into existence in 2009 by someone having a nickname Satoshi Nakamoto. It is the world’s biggest but not the only one. There are more than 1,000 different cryptocurrencies but only a few of them are good for trading. Some other big names are Ethereum, Bitcoin Cash, Ripple, Bitcoin Gold, Dash, Litecoin, IOTA, Ethereum Classic, and Monero.

The four trading styles

There are basically four different trading styles which people can utilise. Besides these trading styles, you should do proper research before investing the money. Your research may include anything from simply reading the news about respective cryptocurrency to having a deep understanding of technical and fundamental analysis of that cryptocurrency.

Day trading
Day trading is the simplest way to trade cryptocurrencies. All the buying and selling happens on the same day and nothing is carried forward to the next day.

Position trading
Position trading is dynamic and a bit more complex in comparison to day trading. This is a longer procedure and your holding might stand from days to weeks to months. When the position is to be carried for long, the cryptocurrency should be properly analysed to get the desired “results.” the best thing about position trading is that whenever you see a pattern, you can open the position and whenever the pattern breaks, you can close it.

Swing trading
This kind of trading takes more time than day trading but lesser than the positional trading. This style of trading is effective when the market’s movement is in a single direction, plus it is best during those volatile conditions in the market.

Scalping trading
Scalping trading is the trading done to earn the profits from the difference of bid and ask price. The scalping trading is mostly suitable for quiet markets and smaller amounts.

Choose the right trading timeframe

Before beginning the trading, it is important to select a timeframe so that your goals can be achieved without any hurdles. Many cryptocurrency traders set hourly or daily timeframes. Some applications also offer customizable timeframes suitable to your needs.

Maintain a comprehensive record

Although the ledger has permanent records, the traders should also keep a permanent record of all the changes. It is vital to keep the record of every change occurring during the trading. This will also improve your reaction to different kinds of changes.

Remain updated with the news

Most people are not fond of political news but if you are involved in financial business or trading, you should remain updated with such kinds of news or anything which impacts the asset you are trading in. This is an essential task for a successful trader.

Beginners Guide to Trading Cryptocurrencies

Nowadays, trading cryptocurrencies is very much popular and a number of new investors and traders are eager to start crypto trading and earn money. But one thing people should understand is that trading cryptocurrencies will not make them rich overnight. It’s a misconception most new traders and investors have.

As a new player in the cryptocurrency market, you should do a proper research about the cryptocurrency you wish to trade in. This article outlines some of the necessary steps one should take to start a career in cryptocurrency trading.

Step 1: find a cryptocurrency trading broker
It is quite difficult to search for a crypto broker. There are various crypto companies with various attractive features. But one should consider the following things before finalizing a broker:

Trust and regulation
It is important that all the activities of the broker are regulated by a governing body. This prevents the broker from involving in any unethical activities.

Fees
There is a simple formula, the lesser the fee, the potential for more earnings. You should do a proper research, analyse the various options available to you, and go for the broker who charges less fee.

Cryptocurrencies to trade
If the broker does not allow you to trade your desired cryptocurrencies, it does not make any sense to open an account with that broker. Always check if your chosen broker offers to trade the desired cryptocurrencies.

Step 2: select the cryptocurrency
If you have not selected the cryptocurrency you wish to trade, now you can do it. You should select the cryptocurrency with the highest potential. While researching the cryptocurrency, you can consider the following things:

Infrastructure: cloud storage, app development, funding, vpn, etc.
Technology: firm, adaptable, and uncomplicated user interface, rapid transaction processes, etc.
Development team: experienced and skilled, robust developers, etc.
Growing popularity: increasing demand for that cryptocurrency, more people attracted to it, wide media coverage.

Step 3: determine the price – is it high or low?
You should determine whether the price of cryptocurrency you want to trade is high or low. Buying at lower levels and selling at higher levels is a very old investment advice but it is still true. If the price is continuously rising for a long time or vice-versa, be patient and wait for a sign to enter.

Step 4: identify the opportunity
Warren buffet said – “be fearful when others are greedy and greedy when others are fearful.”

This is an amazing way to enter the cryptocurrency market. When others are blindly selling their coins at a very low price, you should be optimistic and buy them. And when you feel that prices are unnecessarily rising, sell your coins and earn profits.

Step 5: set your target selling price
Traders purchase a cryptocurrency when they feel that its price is low. When you purchase a cryptocurrency and its price rises, you should set the right price to sell it. The best time is when the prices are going upwards every day.

Words of wisdom
Trading cryptocurrency is very risky and if not traded sensibly, you may lose all your funds. Do not engage in trading using the money you borrowed. Always invest the money which you can afford to lose.

Cryptocurrencies Comparison

Since the arrival of bitcoin in 2009, several other cryptocurrencies have launched because of technological advances, expanded applications and rising demand. While bitcoin has dominated the market for many years, there are 1,300 plus currencies today some of which are giving it a run for its money and fame.

In this article, we compare the three most popular crypto’s in terms of their value, market capitalization and overall performance.

Bitcoin

By value, bitcoin is the largest cryptocurrency. It is also a pioneer in the market having been started in 2009. Its market cap is $275.1 and runs on a digital ledger technology known as blockchain. According to satoshi nakamoto, the founder of bitcoin, this currency was developed to enable direct online cash movement through electronic cash that works independently from financial institutions. Lack of a central governing authority and a network of ‘miners’ have made it a highly volatile cryptocurrency. Nonetheless, there are already retailers and even real estate firms in japan and other parts of the world that are already accepting bitcoin as payment.

Pros for bitcoins
· it is has greater liquidity compared to other cryptocurrencies.
· it has a wide ecosystem of developers and more software and projects being implemented.
· it has the widest receivership with more software/hardware support systems, more exchanges and more merchants.
· it leads in terms of market value.

Cons of bitcoin
· it is highly volatile with ‘miners’ pushing the value to the edge

Ethereum

Ethereum is run on a decentralized virtual machine called ethereum virtual machine (evm) that is programmed to execute tasks with no interference from a third party or censorship. This cryptocurrency was started in 2013. A lot of blockchains have been birthed from this cryptocurrency whose market cap is $71.1 billion. The technology used here is called the smart contract which involves both a digital and paper deal. The smart contract is written in a code that is then fed into the blockchain. Companies like jpmorgan and microsoft are already developing uses for this cryptocurrency.

Pros for ethereum
· it has enabled the creation of other currencies like ether that allow users to develop their unique applications (dapps).
· it has fast transaction speeds
· it can be more useful than just being a cryptocurrency on the ethereum network.
· the ethereum network is safe from spams by hackers since there is an amount of ether destroyed during the transaction process.

Cons
· it can easily be inflationary if not closely monitored.

Litecoin

This is the cryptocurrency that gives bitcoin nightmares in terms of popularity. Charlie lee, its founder, has claimed many times that it is faster than bitcoin and this can be used for payments. It has a market capital of $16.5 billion and a transaction takes just a little over two minutes as opposed to transactions on bitcoin that take over 300 minutes. Ltc also supplies over four times what bitcoin supplies, which makes it the silver of bitcoins gold.

· it has fast transaction speeds
· it is supplied in high amount

Cons
· it has a low market capitalization

NOTE: This article is not an investment advice. Any references to historical price movements or levels is informational and based on external analysis and we do not warranty that any such movements or levels are likely to reoccur in the future. In accordance with European Securities and Markets Authority’s (ESMA) requirements, binary and digital options trading is only available to clients categorized as professional clients.
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