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December 12 2022 Cryptocurrency

Coin trade tutorial

Learn about coin trade methods! To trade cryptocurrency, you need to buy at a low price and sell at a higher price. As simple as it sounds, it is a complex business. Our buying decisions are always based on our expectations for the future.

What is the difference between trading and investing?

When someone invests their money in cryptocurrencies, they are typically planning for the long term. His expectation is that the price will rise in the medium to longer term. When someone invests in cryptocurrencies, they typically have confidence in the team behind the asset, the technology they have developed, the ideology they represent and ultimately the future widespread adoption of the currency. 

Those who invest in digital currencies often use HODL tactics. The word was coined in 2013 from a misspelling of the English hold, meaning 'to hold'. From its name, it means holding an investment for the longer term.

Cryptocurrency traders, on the other hand, seek to profit from fluctuations in exchange rates in the short term. This is a completely different approach. People with this viewpoint often have no interest in the technology and ideology behind the project. 

Because of the high volatility of the crypto market, trading can generate very high profits if you correctly predict the price movements in the near future and time your trading well. Unlike traditional stock markets, crypto markets never close. Cryptocurrency trading is therefore continuous.

Coin trade methods

Every trader is looking for profit, but there are several methods to achieve this.

Intraday trading is a way of trying to make a profit from price movements that occur within a few hours. In this way, you can make and take several trades in a day. If you want to trade this way, you have to spend a lot of time in front of the screen. If you don't want to do this, you can also use automated trading robots.

The scalping trading technique is becoming increasingly popular these days. It is also a more intensive form of intraday trading. It allows us to trade very small movements. The principle behind this coin trade philosophy is that by making a lot of small trades, the risk can be minimised. 

If you want to trade this way, you need to make dozens or even hundreds of transactions in a short period of time. This may also require automated solutions.

In swing trading, we try to find a good entry point, and then in the former methods we can hold the coin for longer periods, weeks or even months, until we feel the momentum is running out. At that point, we try to exit our investment at the highest possible price.

How can we analyse exchange rates?

Fundamental analysis is a way of trying to get a bigger, more comprehensive picture of the cryptocurrency you are considering. We need to look at industry news. We need to analyse the background behind the project. We also need to be aware of international trends. 

In technical analysis, on the other hand, we try to guess the trends for the near future by observing past movements. The idea behind this is that past price movements, if understood, contain enough information to predict the future.

Whether we want to trade or invest, we should use both methods of analysis. There is no guarantee of any kind of trading, but with continuous self-education and learning we can greatly improve our chances.

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