In this digital currency article, trading review will be discussed and the important points that you should follow in this field. And if you want to know what digital currency trading is , in fact, cryptocurrency transactions that involve buying or selling these currencies are called trading. Cryptocurrency exchanges allow traders to exchange their cryptocurrency deposits with different assets such as traditional fiat money or other digital currencies. The transactions that are provided such as bitcoin and other altcoins are for profit, but the purpose of cryptocurrency trading must first be determined.
A digital currency trader is an investor who deals in cryptocurrencies, with the aim of increasing money and getting profits. And in order to profit from the transactions, the trader needs to be aware of the currency price trends using tools like price charts. He must be aware of the market news and follow the future events of the market, so that he can know what is his goal of trading cryptocurrencies and then find a correct analysis of the situation of the cryptocurrency market.
When a person is asked about cryptocurrency trading, it is meant to conduct transactions in the cryptocurrency markets. Trade means paying something like the national currency, the official currency, some type of asset, a commodity or a digital currency and getting something else in return. The best cryptocurrency trading platforms in Egypt
In other words, it is the person who pays some money and buys bitcoin and hopes that its price will rise in the future and be able to sell it at a higher price. In fact, he first bought bitcoin with traditional money, and in the future he wants to sell bitcoin and get money in return .
It means trading bitcoin and buying this currency at a lower price and then selling it at a higher price. But the purpose of investing is to hold bitcoin for a long time and sell it at a higher price when needed.
A cryptocurrency investor and trader should anticipate the price of bitcoin. Therefore, in order to predict the price of a currency, it is necessary to follow the news and events of the industry. And also, follow the trend of currency rates in the market through various price charts. The trader must spend a lot of time, capital and effort in order to acquire adequate skills in trading .
?Who is called a trader
A trader, is a person who buys or sells all types of financial funds in the financial markets. Each digital currency trader can carry out this financial activity for himself or for another person or for an institution
And if we want to know the difference between a trader and an investor, we classify these differences as follows:
The duration of holding their different currencies. Traders buy and sell in short periods of time, and in fact they earn profits from actions in short periods of time. Whereas long-term investors consider the best way to earn profits.
Compared to investors, traders make more buying and selling transactions in a similar period of time.
In the cryptocurrency industry, traders exchange different cryptocurrencies at intervals of one or several months, while investors buy or sell their reserve coins over an extended period of one to several years.
There are differences in the working tools of traders and investors. Traders often use online cryptocurrency exchanges to instantly trade cryptocurrencies or exchange them with each other.
A digital deposit storage site for a trader is different from an investor digital deposit storage site.
The risk or risk of the work done by the traders is more than the work of the investors.
10 countries, including Arab countries, where cryptocurrency trading is prohibited
What is the proper volatility for cryptocurrency trading?
Through trading techniques, a trader seeks to make profits from exchanging cryptocurrencies during market volatility. By following various news and events, he tries to use price fluctuations to take advantage of the rising or falling price of a currency in his dealings with profitable strategies.
And for profitable trading, it is important to analyze cryptocurrency prices in different time periods. And in order to improve his skills in market analysis, a trader needs to learn enough knowledge of technical analysis. Also, a skilled trader must be able to use fundamental analysis to know the appropriate volatility of the market in order to take advantage of profitable market opportunities.
There are a few things that an experienced trader should remember:
The first important point that traders should remember in their trading is to be patient in trading.
A trader can use different methods to trade cryptocurrencies. He needs to test his favorite patterns of buying or selling cryptocurrencies and determine which methods are most successful for him.
A realistic trader knows that the price chart will not always move according to his analysis. But another important point is that the success rate is higher compared to failure.
The right trading method varies from person to person. The important thing is that a person can find his own suitable technique in which the probability of success is higher.
What is a digital currency spot transaction?
One of the ways in which a trader wants to make a profit very quickly or in a very short period of time, even if the amount of profit is small, is the method of spot or speculative trading. The time to do this type of trading can be from a few minutes to a few hours. How to buy and sell digital currencies? Cryptocurrency trading
For example, let’s say you bought five units of Tezos at $1.02, then just a few minutes later you sold them at $0.04 higher. Then when the price goes down, you buy it at $1.05 and sell it $0.02 higher
In this type of transaction, the minimum price should be very close to the purchase price, in order to eliminate the possibility of large losses. A trader who wants to do this style of cryptocurrency trading must spend a lot of time acquiring the necessary skills with focus and risk management.
And of course, in the meantime, maybe a little luck is needed. And if the trader can master this, he will get a very good profit in a short period of time .
?What are the characteristics of day trading?
Day trading is a buying and selling technique that takes place over a single day. And in this style of trading, you should also use a loss limit. Usually the profit of this trade is more than the forex trade.
As you know, since the cryptocurrency trading industry operates 24/7 and has no closing hours, there is another trading style called day trading, which offers the possibility of trading in a period of time of more than one day.
?What type of trade is a swing trade
Swing trading is a trading technique of buying or selling cryptocurrencies that have periods longer than one day. This trading style is called swing trading. In this pattern, the position that is taken is the relatively lowest market price. And after the currency is bought at a relative maximum price, it is sold all at once or gradually. And in order to get a sales position, the same things need to be done in the form of an image.
Usually, it is possible to apply fluctuations in buying and selling transactions in time intervals ranging from a few days to a few weeks. In this method, after the trader takes his trades, he does not have to worry about price fluctuations.
This type of trading is suitable for traders who have sufficient technical analysis skills and can recognize market movement patterns in price charts. They must be able to identify support and resistance levels in order to take profitable positions.
The price of cryptocurrencies has a lot of fluctuations and the trader tries to make maximum profit from these fluctuations by setting the maximum and minimum price in the volatile trade.
Usually, swing traders spend a lot of time buying and selling, but the profit they get justifies the effort. And in this trading style, the minimum amount of the loss should be at a greater distance from the purchase price.
?What kind of trade is called positioning trading
The characteristics of this style of trading called position trading are closer to investment transactions. In this type of transaction, after taking a buy or sell position, it is necessary to stay in that position for a few weeks, months or years in order to get the necessary profit from the transaction.
Taking a position in this type of digital trading is almost like investing. The purpose of entering into this trading style is to gain a lot of profits in a long period of time.
?Is investing considered a type of trading
The main purpose of investing and trading is to earn profit, but there are differences in the way they work. In investing, the investor owns an asset. In fact, it stores value and its goal is to increase the value of its property in the long run.
In trading, the trader takes a position to buy or sell the currency he owns, and as the price of the currency goes up and down, he earns a profit.
When people invest in digital currency, they don’t really want to buy or sell, they intend to hold their cryptocurrency for the long term. They believe that despite the rise and fall of the currency, the price of their desired currency will eventually rise and they will make a profit.
Usually, these people check the coin production technology, direction, coin support team, and if they are satisfied, they invest in that cryptocurrency.
For example, people who buy shares of several companies are looking for a continuous and long-term increase in the value of the shares, and are not only interested in increasing the value.
?What are the recommendations for investing in digital currency
It can be said that investors are considered only savers and do not analyze the charts during the storage time. But it is better for them to resort to market analysis when they want to increase the size or number of investments.
It is recommended that cryptocurrency investors first examine the conditions through fundamental or fundamental analysis of the cryptocurrency market.
Also, for a long-term investment in the cryptocurrency market, it is necessary to choose a suitable cold wallet. Cold Wallet is a type of offline wallet used to store cryptocurrencies, which is known as cold storage. To store cryptocurrencies for several years, the use of exchanges or warm wallets connected to the Internet does not have the necessary security.
?What are the types of market analysis methods in cryptocurrency trading
The meaning of market analysis methods is to check the value of an asset or the price of a digital currency. The use of market analysis is to get a proper view of the current and future status of an asset. It must be said that it is not possible to accurately predict the price of Bitcoin and it is not possible to predict how far the price of the currency will reach in the future.
However, economic analysts have managed to devise special patterns, methods, and rules that help traders achieve profits in the long run. It is certainly not possible to conduct only profitable transactions. An important thing that traders should pay attention to is that at the end of the business, after hard work and endurance, apart from the initial balance, they have made a positive profit.
Analysts use two basic methods to analyze the market and analyze the price of bitcoin or other cryptocurrencies. They use these methods to make their transactions profitable. Below, these two methods are explained under the heading Technical Analysis and Fundamental Analysis.
?How is fundamental analysis done?
In trading through fundamental analysis, the trader focuses on specific events of the company and to determine the right currency to buy and when to buy it. Fundamental analysis is a method of valuing a currency by attempting to measure the intrinsic value of that currency and determine the total price of the currency. Fundamental analysts try to study everything from the overall conditions of the economy and the world of industry to the financial condition and management of companies.
If we want to give an example of Bitcoin, in order to analyze the fundamental future of this currency, it is necessary for traders to follow the news related to this industry and the efforts to develop it. Technically, it is necessary to follow international legislation regarding Bitcoin, the Lightning Network, or any other subject matter that is effective in valuing Bitcoin. In this case, the price direction can be better predicted.
In other words, this method of analysis measures the value of bitcoin from a technological point of view. That is, without looking at the current price of the currency, he evaluates the external factors that have an impact on it and tries to predict the price.
For example, if China passes a law banning the use of bitcoin, fundamental analysis predicts that the price of bitcoin will fall.
How to predict the price with technical analysis?
In technical analysis, analysts attempt to predict prices by studying market statistics. In this review, charts are drawn based on price history and transaction volume. Using mathematical patterns and price trends on the chart, the trader predicts that the price will rise or fall in the future.
Based on technical analysis, analysts believe that no matter what happens in the world, market movements provide traders with concepts that allow them to predict asset prices and future price movements.
?Which of the market analysis methods is more accurate
In fact, no one can predict the future. Trading based on fundamental analysis is a method in which a trader focuses on specific events to determine the best currency to buy and when is the best time to buy it. Trading based on fundamental analysis is related to the strategic trading of buying and holding currencies rather than short-term trading.
And it must be said that there is a possibility of errors in fundamental analysis, and in the field of technical analysis, charts may not always work as before. In fact, no guarantee can be given of the accuracy and correctness of the analysis. However, it is always recommended to work with a combination of both analytical methods for a better result.
?Are exchanges suitable for cryptocurrency trading
Usually, cryptocurrencies are traded through online cryptocurrency exchanges. To choose a suitable platform or exchange, traders should consider various things, including liquidity, the amount of exchange transactions, security measures, transaction fees, and the number of currency pairs the exchange supports.
If you are just starting to trade, a platform with a simple and easy to use interface is your best choice. For more experienced users, platforms with advanced or more complex user interfaces that have more features are recommended.
User interface design can make a huge difference in the success rate of a trader on an exchange. It is better to get information from the opinions of other users about the exchange platform.
Some of the central platforms that have caught the attention of more users are Binance and Coinbase. But decentralized exchanges like Binance DEX and IDEX also have a lot of room for growth.
Depending on the chosen method of his buying and selling transaction, the trader and the investor should keep his earned capital in different portfolios. People who trade using the day trading method have to pay a lot of fees to send their deposit from the hardware wallet to the exchange account. Therefore, the trader should be careful in choosing the exchange or platform.
Investors who trade on a monthly or yearly basis for a long time, due to the commission decreasing while transferring their deposit in the stock exchange, it is not feasible for them to keep it in the stock exchange.
?Where is the digital currency transacted
Most cryptocurrency transactions are possible online and via cryptocurrency exchange sites. Through the interfaces available in the trading platforms, users can automatically send buy or sell orders.
It is best to try to work with a platform that is easy for you to get the necessary information from and that you can work with easily. It is important to read the details on your chosen trading platform to ensure that the level of price movement is accurately measured before you start trading.
?What are the duties of brokers in cryptocurrency trading
Cryptocurrency brokers are called brokers. Brokers sell bitcoin or other digital currencies directly to cryptocurrency buyers at a higher commission.
The buyer and seller on the exchange platforms conduct transactions in the cryptocurrency markets directly and do not need intermediaries between themselves.
?What is the order list in cryptocurrency trading
The complete list of buy and sell orders is recorded and stored in a list called order books. This list includes two sections under the headings Buy or Bid and Sell or Ask.
The registration of a purchase order on the trading sites is called an offer to buy or an auction. A sell order is also called an order or ask, because the seller asks for a special price to sell his currency.
?What is meant by rising and falling markets
In the digital currency financial market, some metaphors are used to show the upward or downward trend of the market. For example, the allusion to “the bull” is to go up to the market, because the bull horns from above when it attacks. The reason the bear uses the market down is that the bear pushes the attacker down with its paw during the attack.
?What is meant by deal size
The trading volume shows the total number of cryptocurrencies in circulation overnight. The trader knows from the amount of high or low trades that the market trend is strong or weak. And if the trading volume is low, the price decreases and vice versa.
At the time of a sudden price change, analysts note a change in market direction from trading volume.
?What are the different commands in cryptocurrency trading
– In the spot order, it is enough for the trader to enter the amount that he intends to buy or sell, and the transaction takes place quickly and at what price.
In a Limit Order, it is possible to buy or sell bitcoin at the price intended by the trader. Of course, this may never happen.
The stop-loss order allows you to sell the cryptocurrency with the lowest loss. This is useful when a trader expects that the price of his currency on the exchange will fall significantly.
?What is meant by manufacturer and taker fees
The common cost in cryptocurrency trading is the applicant and order taker commission. In stock exchange trading, the trader is an order maker. And when a trader places a spot order at the market price, it is done instantly, and the trader here is the buyer or trader who has to pay the order registration fee.
When the user places an order that does not immediately match an existing order, that order is placed in the order list, here the trader is considered a maker and has to pay the company fee.
In the topic What is cryptocurrency trading, four types of trading are described, including day trading, positioning, swing trading, and spot trading. The common point of all these transactions is to make a profit from buying or selling cryptocurrencies. The difference between them is the period of time during which the transaction is executed, which varies from a few minutes to several years depending on the type of transaction.
In investing, the investor is considered to be the owner of the coin, and the purpose of holding his coins is to add value to his coins held over the long term.
Traders strive to be able to examine daily events, patterns, patterns and price charts using fundamental analysis. They want to predict the price of the currency by these means and they can increase the probability of their profitability in cryptocurrency trading.
Typically, for cryptocurrency trading, traders conduct their online transactions through cryptocurrency exchange platforms in direct communication with the buyer or seller .
?What is cryptocurrency trading
Cryptocurrency trading is a profession that allows its users to exchange their digital currencies for different assets such as fiat currencies or other digital currencies. The basis of this method is to buy cryptocurrency at a lower price and sell it at a higher price in another period of time. Cryptocurrency trading involves speculating about price movements from charts or buying and selling digital currencies through an exchange.
?What are the most popular methods of trading
The four popular active trading methods used by most users are day trading, position trading, swing trading and scalping. Day trading is perhaps one of the most popular active trading methods. The time interval they consider for this type of transaction is one day.
?What is scalping trading style
This style of trading is also called the spot trading method. When a trader wants to quickly make a trade in a very short time and make a profit, he uses the scalping method. And in this method, depending on the price fluctuation in a short time, the purchase or sale transaction is executed quickly, even the amount of profit in this transaction may be very small. Most often, professional traders use this method.
?How do we interpret technical analysis
Technical analysis is a tool for examining price and speculating on the future movement of financial markets. In this method, historical price charts and market statistics are used. This method of analysis is based on the belief that if a trader can identify past market patterns, he can make a fairly accurate prediction of future price paths.
?Can you use fundamental analysis and technical analysis
A trader can use both technical and fundamental analysis at the same time. And in fact, using both analyzes together will be more effective. While technical analysts begin their analysis with charts, fundamental analysts usually begin by analyzing events and the company’s financial data.
?What are the benefits of technical analysis
One of the advantages of technical analysis is that it can be applied to almost any trading instrument and on any time frame. Technical analysis can be used to analyze any stock asset, commodity, forex interest rate or digital currency. You can also apply the technical analysis of a short term trade to a trade in a longer time frame