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As soon as Bitcoin began its development, thousands of people were willing to invest in a promising project, and the emergence of specialized cryptocurrency exchanges became inevitable. However, it took several years to form a full-fledged market. And even now, it should be noted that there are only a few exchanges with a professional approach that you can entrust your money to. The development continues, and probably we are still waiting for big changes.
There are several types of work in cryptocurrency trading, including the following methods:
Nowadays, arbitration between the exchanges has practically lost its relevance, despite the huge number of automated cryptocurrency trading systems working in this direction. Working with forks at the very start is quite a high-risk business, connected with both great opportunities and great losses. In addition, guaranteed success in this type of trading is possible only if there is insider information, which is usually questionable and not always legal.
Legal information about promising forks can be found on the thematic forums – in the official topics of new cryptocurrencies, where users can be attracted by the description of a particular coin (for example, btc, ltc or eth) and, due to correctly submitted information and visible benefits, they will start buying it. The main source of such information is considered to be bitcointalk.org forum, but when the information appears in a wide access, it already loses its relevance.
Since stable and serious work with large volumes for beginners in the forks is very difficult, only cryptocurrency trading is staying efficient, completely repeating the principles of operation of conventional currency or stock markets, as well as working with Bitcoin derivatives (for example, with litecoin), the simplest example of which is working with CFD (contracts for difference) on MetaТrader 4 platform. Cryptocurrency exchanges operate like ordinary stock and currency exchanges.
It is enough for an experienced trader to spend a little time studying the features in order to start working in new conditions, and the beginner risks no less than when playing the lottery. In order to quickly get used to and not get a serious loss, beginners in crypto-trading should learn and understand two or three simple strategies that can be applied on any of the existing exchanges.
In the early years, bitcoins were sold and bought in private transactions or on the # bitcoin-otc IRC channel. On May 22, 2010,the user laszlo bought two famous pizzas from jercos for $ 10,000 BTC. The first major Bitcoin exchange was MtGox.com. It was founded in 2007 by Jed McCaleb, the developer of eDonkey 2000 and the Ripple payment protocol, to trade Magic the Gathering game cards, and the Bitcoin trade opened on July 17, 2010.
In March 2011, Jed sold the stock exchange to the Japanese firm Tibanne Co. Ltd. Then, Bitcoin cost only a few cents and orders of tens of thousands of BTC were common. So, this event began the slow but stable rise of bitcoin’s popularity. On November 6, 2010, the price hit 50 cents, and on February 9, 2011 in several hours it became equal to the US dollar. In spring of 2011, Bitcoin exchanges began to appear around the world and they were traded for different currencies – Britcoin for sterling, Bitcoin Brazil for Brazilian real, BitMarket.eu for euro and Polish zloty. By the end of April, Bitcoin became more expensive than the eur and the pound.
Summer 2011 is called the time of the first Bitcoin boom. People around the world bought AMD Radeon video cards and started mining, the complexity of mining and the price of Bitcoin rushed up. By June 2, 2011, the price soared to $ 10, and just a week later – to $ 32. The cryptocurrency industry began to spin serious money that attracted the attention of hackers.
On June 19, MtGox was hacked and the hacker dropped 3,000 times the price of counterfeit orders – up to 1 cent, buying tens of thousands of BTC for a penny. It was a bounce that led to Bitcoin disappointment for many of those who were the first fans of this crypto currency. The price was able to return to the previous index only after 600 days – on February 28, 2013.
On April 1, $ 100 was given for bitcoin; the peak of its price was in December and reached 1,320 USD. Since 2013, Bitcoin came in trading for a long time, entrenched not only on the exchanges, but also in politics, causing serious concern among bankers, regulators and, according to the google, even the governments of most developed countries of the world.
Such a rapid increase in the value of digital currencies could not fail to attract the attention of professional traders. The popularity of btc multiplied cryptocurrency trading exchanges, Bitcoin quotes appeared on the terminals Bloomberg, Yahoo Finance, Thomson Reuters Eikon, funds based on digital currencies are created, the Bitcoin index is entered into the ETF exchange platforms.
There are serious disputes over the use of traditional technical analysis (mathematical approach) in cryptocurrency markets, although it is relatively successfully used in the stock and currency markets. In the cryptocurrency community, half of the traders believe that it is not applicable for bitcoin and ripple market due to the different nature of cryptoeconomics, and the other half are confident that this approach can be used here. The choice is yours.
The most accessible strategies for beginners are simple ones based on technical analysis. They are based on easily determined patterns of movement of cryptocurrency trading quotes, indicators, fundamental factors and news. There are many different means that can be used in order to analyze the digital market.
Most of the simple strategies based on technical analysis are somehow related to the Moving average indicator (moving averages). Lines produce a mathematical averaging of prices taken over a certain period. As the course changes, the value grows or falls, which allows to determine the general trend of the cryptocurrency instrument movement in the future and make a profit, by simple mathematical calculation.
The details of using a moving average are quite simple: if the price is higher than the moving average, then the price rises, if it is lower, then it falls. Simple trading tactics are based not only on the Moving Average, but also on the patterns of quotes movement on crypto exchanges, which can be determined with the help of “Japanese candles”.
This type of graphical representation of the price allows to track short-term trends in the market. An example of the use of “Japanese candles” are the so-called candlestick patterns, which are the “convolution” of analyzed plot of the graph when moving to a larger period.
Such patterns of cryptocurrency trading sometimes more clearly show the turning points and help in determining direction of the trend. Despite the existence of many different strategies, not all of them give positive results during trading. The main reason for failure is the occurrence of false trading signs that entail losses. In order to avoid this, it is necessary to create clear rules that allow to predict all variants of the development of events.
Almost all trading tactics are based on blockchain technologies and capable of making a profit, but a high level of risk and difficulty in use can be a serious obstacle to the increase in profit. The best strategies contain simplicity, which guarantees positive results, clear trading tactics, they are quite flexible and ready for any changes in the store.
The top strategies for digital market today are the following:
They are able to give a guaranteed profit on any crypto currency pair, regardless of the circumstances.
The crypto trading strategy of a trader is an indispensable tool that allows him to have an advantage over other participants in the digital market. Trading strategy is just as important as competent risk management, trading discipline and strong nerves. The absence of a trading strategy leads to random actions and, accordingly, random results.
Any trading strategy is created on the basis of some laws that are more or less often found on the digital market. Although patterns are most often implied in graphs (technical analysis), the relationship between fundamental data and news is also possible. Having found certain patterns, you should check them with historical data.
In addition to creating your own strategies, policies and individual work, some exchanges allow you to minimize risks, following the strategies of experienced traders, this service is called RAMM. RAMM provides an opportunity for some clients (Subscribers) to support the trading strategy of experienced and professional traders (Providers). The results of the provider’s trading are publicly available, and the law of copyright is not broken.
With the help of rating of accounts, graphs of profitability and reviews of other traders, you can choose the most suitable Provider and begin to follow his strategy, from the complete transfer of funds to the professional to your own work, using other people’s strategies as tips.
With the help of MT4, traders can:
The client terminal MetaTrader 4 has impressive analytical capabilities.
For each financial instrument 9 timeframes (periods) are available, which allow to analyze the dynamics of quotes in detail. Over 50 built-in technical indicators and tools facilitate analytical work. With their help, you can identify trends, find different shapes of cryptocurrency trading, determine entry and exit points, and much more.
Psychological aspects are extremely important for successful work. There are several main points that can be offered to you in order to make a profit, or at least not complete the transaction with a large loss at a crypto-exchange:
Having bought crypto currency at one price and not seeing strong fluctuations up or down, you should not sell it immediately.
There are many examples of the fact that an almost even course of some crypto currency suddenly in a week or two increases 10 times. It is necessary to monitor thematic forums and user reviews about this coin, then the selling will be successful. Always look at the order book. If there are few buyers, and there are many sellers, then having bought at an attractive price, as you think, you can not sell everything you purchased.
Look at the trading volume and cryptocurrency capitalization to know whether to hold on and wait or not to wait for the current moment of sharp jumps. Thus, after analyzing changes in cryptocurrency prices and finding certain patterns, you can create your own strategy and your own trading plan in privacy, which can be executed in real conditions.
Division of the entire list of popular stock exchanges can be conducted conditionally on one of the most important criteria. First, there are stock exchanges where coins and some of the main forks can be exchanged for national, world currencies (fiat money). Second, there are stock exchanges where trading is performed exclusively between bitcoin cash and forks and the exchange of one cryptocurrency for another. Forks are digital money derived from the main bitcoin, for example, ethereum. Many forks can be exchanged only on certain exchanges. There are many cryptocurrency trading exchanges that have received the biggest popularity among traders all over the world. The most efficient of them is Dowmarkets .
Fast withdrawal of profits and a unique bonus system up to 100%. Moreover, Dowmarkets broker offers unique conditions for the accrual of bonuses. The bonus can be waived at any time without any restrictions! In case of refusal of the bonus, all earned profit will remain on the trading account and can be withdrawn at the request of the trader.
Dowmarkets .com occupies high positions in the leading cryptocurrency broker ratings. One of the main characteristics of this broker is its availability for both beginners and experienced traders. Types of accounts are provided for any budget and professional level of the trader. The minimum deposit amount is 250 USD, EUR, GBP or 20 000 RUB. For experienced traders, the broker offers premium and VIP accounts, with a good range of additional services, such as professional trading strategies, market analytics, insured rates, round-the-clock support and much more.
Exchange operations, potential risks and speculation on cryptocurrency exchanges are identical to any other kind of trading. For profit you need to buy for a cheaperprice, and then sell for more expensive sum of money. That is, just like when investing in a common currency. Naturally, the instrument base and the principle of setting targets for trading cryptos are set in the same way as in the securities or forex markets. To make a profit by trading virtual money will not be a problem for those who know the basics of trading on the stock market, securities and national currencies. The main components with which a trader operates on a cryptocurrency exchange can be represented by the following list:
To understand the basics of a cryptocurrency exchange, it is necessary to realize the importance of each of these elements.
Unlike the stock or foreign exchange market, the volatility observed on the cryptocurrency exchange is hundreds of times greater. Volatility determines the size of the price movement over a certain period in time. For example, in 2013, the bitcoin rate has risen by more than 5500%.
Such differences during the year can not be found on the securities market, on the market of stocks or cash. Considering the steady movement of exchange rate on the stock exchanges, in order to trade with tangible income, it is necessary to invest substantial funds in turnover.
On the other hand, for the entire list of stock exchanges, cryptocurrency trading is quite likely, having invested only 5,000 rubles, to receive in a few days net income in the amount of 30,000-40000 rubles. Naturally, together with the possibility of rapid growth of savings, you can also quickly lose everything. Thus, incredible volatility and great variety of options is always connected high risks.
It all comes down to the possibility of a participant in trading on the stock exchange to predict rates correctly. To do this, you can use both fundamental analysis, relying mainly on news related to cryptocurrencies of interest, and rely on technical analysis.
Technical analysis in terms of its effectiveness in relation to cryptocurrency exchanges causes some doubt. Everything rests on the high volatility and liquidity of trading instruments and the presence of a small fraction of systematic events in this market. As a result, the courses are managed by groups of players that are scattered according to the specifics and purposefulness. These groups are capable of increasing the volumes traded at one time unexpectedly.
Trading cryptocurrencies is a fantastic way to make money online. Of course, just reading the article, you will not become a genius of trade and will not earn a million out of the blue. To do this, it is necessary not only to study a large number of publications, but also to practice and develop your strategies, to investigate the leverage and other important factors. Also, you may send an e-mail to professional traders and ask for support. If you manage to comprehend this skill, then you will simply open endless opportunities for profit. We wish you successful trade!