Crypto Academy / Season 3 / Week 1 - Homework Post for @lenonmc21
CRYPTOCURRENCY TRADING
To an ordinary man, Trading involves the exchange of physical commodities, that is the buying and selling of goods and services using Money( fiat currency),but in the cryptocurrency world, trading means the activities that involves the purchase, selling, collecting, and sending any cryptocurrency related activities in the cryptocurrency market.
There exist various ways by which traders performs transactions in the cryptocurrency market and there are many platforms ; called exchanges where a trader can transact whatever cryptocurrency asset one wishes to trade and also, there are loads of cryptocurrencies to trade in the cryptocurrency market.
If a trader trades in the cryptocurrency market, he may trade a Coin for an equivalent amount of anothet coin of his or her choice; one may also trade in an exchange by selling some of the Cryptocurrency assets in his or her cryptocurrency wallet, a trader can also exchange some or all of his ot her cryptocurrency asset to an equivalent amount of fiat money which will be transfered directly to his bank account, a good cryptocurrency trader can also flex his or her trading muscles in the cryptocurrency market by using the various technical indicators available in the exchange to make more profit.
Though the cryptocurrency market is highly volatile ,but a lot of people have made and are still making a lot of profit in the cryptocurrency markets by trading.
In trading generally, the primary aim of every trader is to make profits as much as ppossible; even though one should be prepared for inevitable losses at some points, although nobody likes to lose. Making more profits than losses depends on how the market is addressed. If a trader wishes to minimixe losses, there is need to learn , practice and be active in the cryptocurrency market.
To be a successful trader, one needs to follow the market trends; as it is always said, and do your fundamental analysis too;follow up with the news and happenings around and in the market.
Importance of trading includes;
It allows for a legitimate source of wealth
It allows people to get acquainted to the trends in the global market
It creates an avenue to know more about the prices and fluctuations that happen in Cryptocurrency
To maximize the profit a trader can earn in the Cryptocurrency market, there are basic approaches and techniques that assists to predict the market trends. Some of those techniques includes the Technical and fundamental analysis.
WHAT IS TECHNICAL ANALYSIS?
Technical analysis can be defined as a method used in the crypto currency market to foretell the trends of a certain cryptocurrency market by analysing the past performance or history of that particular asset in question in order to avoid losses.
Technical analysis takes ino account informations like Previous highs , lows closing prices, trade volume and involves using some special indicators that does all the trade data analysis automatically for a certain period of time depending on the type of trading being employed analysis helps the trader the best time to enter or exit a market.
It should be noted that technical analysis is not a sure or certain way to make predictions as there are cases where the market behaves in a different manner and gives false signals .Technical analysis involves observing the chart of an asset for a desirable period of time to check whether the market is favourable to enter or not.
A trader typically enters into a market at an assumed low level or the support level after which a bearish trend is anticipated and he or she sells positions or exits the market after a resistance level.
Below is an example of a crypto currency asset chart; Ripple(XRP) in this case.
From the candle stick chart above, it can be seen that the price of Ripple experienced a sharp decrease before gradualy becoming bearish.
So if I want to enter into this market based on the chart above and make profit, I will set a support level at the lowest point;the point of sharp decrease in price and a resistance level at the previous high ( because the market tends to correct itself )and sell or exit the market once my resistance is broken
FUNDAMENTAL ANALYSIS
what is fundamental analysis?
This is a marketing tool that is based on real life occurrence that happens at a particular time which in turn can affect the prices of cryptocurrencies in the cryptocurrency market. For instance earlier in 2021, the prices of some coin rose significantly after Elon Musk teased doge coin to be the future, and its price began to drop after Elon Musk called it a hussle.
Generally the prices of coins rise when there is high demand for it like the increase in the price of Bitcoin after Tesla adoption and a decline when people find it risky and investors begin to loose confidence in the crypto currency asset .
From the chart above; looking at the trading volume in the last 24hrs, it can be seen that there is a huge amount of trillion dollars, which means that a lot of traders are still trading BTC. So, for a newbie in crypto, one may be advised to invest in BTC.
CRYPTOCURRENCY EXCHANGES
These are online applications for Android, iPhones and computer devices that are used for crypt currency trading. That is, they are used to perform any activities that are related to buying, selling and anything that relates to cryptocurrency transactions.
My top 3 cryptocurrency exchanges with the highest volume
,1)HUOBI GLOBAL with the volume of which is approximately equal to 322.843 worth of BTC
FTX with the volume of about $8,116,908,824.23 which is approximately equal to 237,845 worth of BTC.
Coinbase exchange with the volume of about $2,280,636,502.52 which is approximately equal to 237,845 worth of BTC.
How to purchase coin on Huobi Global
I chose Huobi Global as can be seen from above is one of the exchanges with the highest trading volume. As it can be seen on the website ,m.huobi.com, they offer some bonuses for newcomers on the platform which can be assessed to after sign up. Also Huobi global is ranked no 1 in liquidity ranking all over the world. They also claim to have encountered zero security incidents which means that their platform has never been hacked before due to high level security they use.
And lastly, they claim to have 20 k worth of BTC stored as a security reserve fund. With all these and other features that can be seen on the platform, I'm sure anyone who wants to be a trader and be confident of the security level of his account will be convinced and be confident enough to chose Huobi global as his Cryptocurrency exchange platform.
You can have access to Huobi Global by either visiting their websites @ m.huobiglobal.com or go to app stores for your android, iPhones, tablet or PC and download the Huobi Global application.
Here, I'm using their website
Step 1: open your browser and search m.huobi.com
Step 2: since you are new to the exchange platform, you will need to create an account on the website, click on the log in button at the top of the page and a new page will be made visible to you.
Step 3: you will be required to select your country, you can either use your e-mail or you mobile phone number to sign up
Step 4: an email confirmation will be sent to you to verify the authenticity of the email address input by you.
Step 5: you can then create a password and then sign in to your account.
Step 6: it will be interesting to know that an email will also be sent to your address to confirm your log in, this also makes the platform a more secured exchange.
Step 7: you can now start your crypto currency trading journey from there.
Step 8: on the website click on balances at the bottom part of the website. Then a page which contains the list of cryptocurrencies will be shown to you and you can click on any of the tokens you want to buy
Step 9: there are only 2 ways by which you can buy a token on Huobi global, the first method is by buying directly using your bank card; here you will be required to input the amount of the token you want to buy which will be equivalent to a currency you have in your bank account.
Step 10: the second method is by P2P, using this method, you will see available sellers who want to sell a token; you will be required to either do a bank transfer of the sum of money that will be equal to the amount of the token you want to buy. After your transaction has been approved and confirmed by the seller, he will then send you your newly bought cryptocurrencies