Crypto Academy / Season 3 / Week 1 - Homework Post for Prof. @lenonmc21
Hello Everyone,
Hope we are all fine, am so happy to be one of the participant of this assignment. I have read and understood the class taken by Prof. @lenonmc21 which was titled,
"What is Cryptocurrency Trading and on what platforms can we do it?" . I will be going straight to the point. That is, the answers of the question given to me by Professor without our time. Follow me as take you on the journey.
Define in your own words what trading is, what its function is, and how it relates to the cryptocurrency market.
Trading is what trader do by making a decision on a particular market price. Which may be either to buy or sell. But trading is more than just buying and selling goods. In a simple term, trading can be define as the buying and selling of financial assets which could be shares, raw material, indexes, raw materials, commodities, bonds and currencies such as cryptocurrencies. With trading tool, a trader can speculate on a price of a market to buy at a low price when the price is less and sell high when there is an increase in the market price.
Cryptocurrency Trading can be define as the act of buying and selling crypto assest (coin, token,contract) which may serve as a company shares or a currency that could be traded again. It can also be define as the process of speculating on a particular crypto assest through a CFD trading account.
Traders or investor speculate to predict the future price of markets in order to buy a large amount of assets when there is reduction or with a low amount of price and sell when the assets grow in order to accumulate massive profit.
For example, Trader purchase 10Btc after his trading analysis at the rate of $100, 000 which makes it $10,000 each, put to trade and after sometime, the 10btc that worth $100,000 before now increase to $150,000 that means the investor gain $50,000 which is 50% of the investor capital.
Define and explain what are the tools used for trading (Technical Analysis and Fundamental Analysis) and at least one example of each. (A screenshot is required).
Technical Analysis
Technical Analysis serve as one of the trading techniques used by traders. It is an helping tool used by traders in decision making. Especially, when they are about to enter or going out of a trade or market. This decision is not an instant decision, It is a decision that can take a short, long or staying out of the trade for some time. Technical analysis is made possible by studing the market for some time in order to avoid loss.
Technical Analysis can be define as a study that pattern recognition on a price chart in order to predict future prices. In the share market, traders analyze the prices of the volume of the cryptocurrency traded on an exchange. If prices are moving higher on increasing volume, traders will see the demand for the particular cryptocurrency.
I will be showing below an example of Trendline, surport and resistance which is a chart pattern that is used to determine upward and downward movement in the price of the market.
Fundamental Analysis
Fundamental Analysis is the act of studying everything that could affect a security’s value such as financial stability, the economy, management and the condition of an industry. To some extent, fundamental analysis also involves studying the economic situation of countries in order to trade currencies more effectively. Currencies (crypto) react to fundamental factors such as interest rates, economic growth, and speeches made by the directors of banks or crypto whale investor (celebrity) like Elon Musk. Below is a very good example of how Fundamental analysis affected a Crypto coin (XRP)
CNBC
Name at least 3 trading platforms with the highest trading volume where we can buy our first cryptocurrencies and explain in your words the ways to buy cryptocurrencies on that platform ( Do not use Binance ).
To be able to select the trading platform with highest trading volume, I will be using coinmarketcap to confirm the volume of each exchange of;
Huobi Exchange - This Crypto exchange was ranked number 2, with $4,123,390,774 trading volume.
Poloniex Exchange was ranked number 12 with the volume of $138,662,704.
Bittrex Exchange - This was also ranked as number 16 among other trading exchange, with trading volume of $116,987,367.
Below are the screenshots from coinmarketcap for the confirmation of the volume.
Huobi Exchange
The first thing to do before you can Buy or Sell cryto on Huobi Exchange is to visit their website https://www.huobi.com/en-us/.
After when you have visited their website, you will need your email and password to log into your account. After that, at the upper part of your homepage, click on buy crypto.
There are two way to buy crypto on Huobi Exchange, the first method is via Credit and Debit card, the second is via P2P market trade.
Poloniex Exchange
To purchase crypto from this exchange, first, visit Poloniex website https://m.poloniex.com/.
After visiting the website, you will need your email and password to access your account.
After when you have logged into your account click on explore, then click on Fiat, to buy cryptocurrency with a card, directly from a bank account.
Bittrex Exchange
To purchase cryptocurrency on Bittrex Exchange, you also need to visit Bittrex website https://global.bittrex.com/home/markets. After that, click on instant buy and sell,
After when you have clicked on Instant Buy ad Sell, you can now buy cryptocurrency directly from your bank account via debit/crit card.
I want to say a very big thank you to Prof @lenonmc21 for tutoring us on this topic because it as really added to my knowledge. Also to those that will be reading my post,