Concept of Trading

​​​​​​1. What is trading?

A trader is a person or organization who buys and sells financial items such stocks, bonds, commodities, derivatives, and mutual funds as an agent, hedger, arbitrageur, or speculator in the world of finance.

You get the point, even though not all trading involves finance.

Trading entails buying and selling financial items such as stocks, bonds, commodities, cryptocurrencies, derivatives, and mutual funds as an agent, a hedger, an arbitrageur, a trader, or a speculator.

It simply means that I give you something in exchange for you giving me something else.

As long as there is money or some kind of valued item, anything becomes marketable thanks to cryptocurrency.

Which brings me to What is Cryptocurrency Trading?

Trading cryptocurrencies entails speculating on the future price fluctuations of the underlying coins through the use of an exchange or a CFD trading account.

This should help to clarify what CFD involves (amazingly, I only just found out deeply about this myself today). Since everyone is constantly learning, I cannot possibly be all-knowing.

A contract for difference is a common sort of derivative trading (CFD). Making forecasts about the growing or falling prices of quickly fluctuating global financial markets (or assets), such as treasuries, shares, indices, commodities, and currencies, is possible with CFD trading. It is vital to comprehend the fundamentals of cryptocurrencies and the core reasons why one should trade because many of us in the market today learnt about them the hard way, even though it has made us quite robust. If you don't, you may simply enter a market, purchase at highs, and sell at lows, and believe you are making money before analyzing your portfolio and finding you are over 20% in the red from the starting capital you used to trade.

After making that point, what tools are required for a bitcoin trader to have a secure trading experience. Here they are, however bear in mind that no one, not even experts, can guarantee the veracity of each analysis's findings because a variety of factors could either unintentionally or purposefully impact a study of the cryptocurrency market.

They are:

1. Fundamental Analysis

2. Technical Analysis and

3. Sentimental Analysis.

The first two are widely used, or at least are well-known in the industry, in bitcoin trading. But I also believe that most traders—including myself—use sentimental analysis. Before continuing, let's briefly define these terms first.

1. Fundamental Analysis

Imagine if I find out that Bill Gates, Jeff Bezos, Warren Buffett, and President Trump would all invest in Bitcoin on a particular day, say the Fourth of July. The possibility of Bitcoin's price reaching new heights is very high.

And that, my friends, is FUNDAMENTAL ANALYSIS.

In other words, FA is just purchasing or selling a certain cryptocurrency based on rumors, excitement, and insider information. Many traders have, up to recently, overlooked the latter issue.

2. Technical Analysis

The name would suggest that this is more technical.

In other words, you will comprehend this better if you are a statistician or mathematician who deeply understands bearing (just a tease). It is difficult, it needs effort, courage, and true computational understanding.

Technical analysis (TA) employs a variety of tools, such as but not restricted to:

• Bollinger Bands
• Moving average convergence divergence (MACD)
• Stochastic Oscillator
• Relative strength index (RSI)

Please don't let all of this overwhelm you; with time, you'll learn what they mean and realize that you won't always need to utilize them.

Some trading truly doesn't require all of these, but I personally find them complicated, so I typically stick with one or don't use any of them at all and just go with my gut (Sentimental Analysis.)

If you pay close attention, you'll see that I simply defined what "sentimental analysis" is.

But wait on to this for clarification:

2. Sentimental analysis

This refers to the methodical identification, extraction, quantification, and study of affective states and subjective information using natural language processing, text analysis, computational linguistics, and biometrics. (I got this from Wikipedia; reference).

In contrast, a trader in the world of cryptocurrency trading is just a person who carefully watches market changes while purchasing and selling cryptocurrencies, either physically or digitally through an exchange. Binance is a well-known illustration of a trading platform where users may buy and sell cryptocurrencies.

To increase their individual profits, traders can trade their cryptocurrencies through a variety of channels, many of which are local, particularly in Nigeria. Dealers will occasionally purchase cryptocurrencies at wholesale prices from other vendors, mark them up, and then resell them to customers at a profit. On well-known platforms like Reddit, WhatsApp, Telegram, Discord, and a plethora of others, they all conduct this activity.

Consider the scenario when Buyer A, a trader, purchases Bitcoin for NGN 500 from a large seller and then sells it to Man B, another dealer or small bitcoin user, for NGN 530, earning NGN 30 in profit. This type of trading aimed at maximizing profits is possible on platforms like Binance, Hotbit, and Roqqu. A shrewd trader would know how to buy from exchanges when selling to them and how to buy from exchanges when selling to them. For instance, you might determine the exchanges' purchasing and selling rates and compare them to those of other nearby dealers and merchants using a few simple calculations. Making sure to reduce loss and, to the greatest extent possible, boost income is the key to success. But because we must proceed, a more thorough explanation of this procedure is obviously necessary.

1. Before You Start Trading

Keep in mind that there are successful and failed traders in this market; I will explain the differences between the two in the future course, but for now, keep in mind that 90% of you will lose all of your wealth due to ignorance.

-You are competing with the brightest minds and most astute traders who have years of conventional market trading expertise.

Think backward

You must be aware that there are professionals and seasoned traders trading the traditional market alongside you experts and wizards; however, they did not become that way overnight; rather, they were once just like you. As a result, as a novice, you should avoid competing with them because you will lose quickly.

Think about the following before you even contemplate trading cryptocurrency.

-Strategy mastery- Most traders lose money because they are greedy and ignorant.

Some people might come up with a technique, but instead of letting it sit and be tested over time, they might try it out with all of their money and lose it.

We have what is known as 1.

When you find a trading strategy, you should give yourself a month or more to backtest it. I did mine for five months because I wasn't in a rush to trade the live market. This will boost your confidence and give you more knowledge about your strategy. At this point, you can decide whether it is good or bad. 0-100%

3. If you have no prior experience trading the leveraged futures market, I advise you to begin with spot trading.

Leverage is not available on the spot market, which is advantageous for novices.

Try it out for at least a month, and if you're successful using your entry and exit strategies in the spot market, you can move on to futures.

If you have a mentor or have taken my future class, you need not worry since I am here to coach you. I performed my homework in this manner because it helped me comprehend how buying and selling work in the cryptocurrency world while staring at those candles in my chat.

Believe me when I say that investing your time and patience in this field will pay off well. The most successful traders I know are those who took the time to learn how the market functions.

• Trading Psychology

80% of any trade's performance is a result of risk management and trading psychology. This is due to the fact that the market moves in cycles that are governed by human psychology and emotion, or what is known as "market psychology."

Many trading failures occur as a result of stated traders' lack of market psychology education. He discussed the "Fear and Greed Index" and why it is wise to buy when market fear is at its highest. He vehemently discouraged purchasing an asset during a pump and indicated that it would be wiser to sell during a pump.

To maximize the likelihood of a favorable outcome, it is advisable to observe your emotions while trading and, if possible, act in the opposite way. Trading based on your gut feelings has a significant chance of loss.

"Be fearful when others are greedy and greedy when others are fearful"

Trends are important for traders to be aware of. Nevertheless, it would be wise for an investor to purchase an item at a discount and wait. Find assets with a low market cap and solid fundamentals, then invest. He emphasized the significance of Logic over Emotion in Trading and strongly cautioned against FOMO (Fear of Missing Out).

2. Types of Cryptocurrency Trading.

There are many different sorts of cryptocurrency trading, and they are all significant. However, depending on the type of deal a trader would like to initiate in a cryptocurrency market or exchange, just a few of the many are used at particular times.

Just some advice on some of the major issues you could run into when trading bitcoins.

Consider cryptocurrency trading as the various abilities and strategies you will employ to purchase groceries (pepper, Maggi, Milo, chicken, ingredients, and everything) from your neighborhood market or store. Normally, you will have a plan when you first start out, and that plan entails you thinking through the cost of that shoe, how much further you would like to price that shoe to best suit your pocket so you either get it for the price you have budgeted or even better, way less so you can have something more for yourself, or how you will price the pepper and chicken with the market seller, If they were selling 1KG size chicken for N5000 or 100 Cedis, you could price it lower and buy it for N4500 or 80 Cedis. In this case, if you were trading cryptocurrencies, you would have just started a limit order. If you had bought the chicken at the advertised price and didn't price lower, you would have started a market order.

Let me now briefly mention a number of these different cryptocurrency trading kinds. Depending on how much time we have, we can then begin to discuss a few of them in detail.

1. Swing trading

2. Scalping

3. Day trading

4. Intra-day trading

5. Range trading

6. Position trading

7. Investment

1. Swing trading

Swing trading is a type of trading when a trader buys from the lowest position, or bottom, of a cryptocurrency in the hopes of holding onto it until it reaches the highest position he believes it will reach. Depending on the level at which the trader decides to sell off, this form of trading may take place over the course of days, weeks, or even months.

This type of trading is unquestionably one that experts advise beginning traders to engage in because it typically provides you plenty of time to consider potential long-term gains.

The truth is that swing trading is undoubtedly one of your greatest options if, at some point, you become proficient in technical analysis (TA) and can analyze patterns using charts, indexes, supports, and resistance to some extent.

2. Scalping

I will NEVER advise scalping to newcomers to the cryptocurrency market!

Scalping is all about placing trades very quickly with the intention of achieving consistent profits (even if the profits are very small). Possibly a deal is made every few minutes. You should ideally be able to go both long and short. By making spot purchases and sales of cryptocurrencies on exchanges, you can scalp.

Scalpers are the term used to describe traders who engage in these kind of deals.

If you have WazirX, for example, and it is traded for $100, you can manipulate the system so quickly that you can sell by placing sell orders for $105, and as soon as they are filled, you buy it back at $103, and you wait until it reaches $105 once more, and so on and so forth, making minute amounts of money, such as $2, $3, and $1 in minutes and seconds.

Even while it seems simple, it is more complicated than you might realize because something similar could happen at any time. Therefore, in the majority of situations, scalpers employ stop loss orders to prevent these losses when scalping, and as I previously mentioned, you must be a somewhat experienced trader to enjoy this kind of trading!

3. Day trading

Day trading is exactly what it sounds like; it is similar to scalping, only that you place deals over the course of an entire day rather than a few brief minutes.

You continue to scale in and out of positions and employ stop losses, but your goal is to make a little bit more money every trade than you would if you were scalping.

4. Intra-day trading

The only difference between intra-trading and day trading is that this sort of trading lasts longer than a day in order to guarantee that a specific order placed is executed in the trader's best advantage.

5. Range trading

Range traders trade the range and place stops; they don't really care whether they are trading the range at its highest point or its lowest point because they are just purchasing the range's bottom with a stop and selling it at its highest point (or scaling out toward the top).

Cryptocurrencies will also continuously specify a trading range. This range will typically be a form of consolidation (either accumulation, big players getting more coins for the next leg up, or distribution, selling coins at a high before the big players let the market drop).

6. Position Trading

Position trading is a long-term tactic that is also sometimes referred to as trend trading. Traders buy assets to hold for a long time (generally measured in months). They intend to turn a profit by reselling those assets in the future for more money.

Let's use the upcoming bundle token as an example. It will be wise to use bundle token as part of a position trading strategy because, even if the token soars to the moon upon launch, there will undoubtedly be a correction. However, in the long run, due to the utility bundle token may have both now and in the future, the end goal is unquestionably profit yielding.

Furthermore, since it is predicted by traders to be profitable, such traders will undoubtedly want to hold onto it for a long time.

Position trading is another another form of trading that is suggested for beginners, just like swing trading. Think about it this way: if you are a beginner and have been holding Bitcoin ever since it was only $100, what do you think your profit will be at this point? It is obvious!

7. Investing

Holding on to a trusted asset is what investing is all about; trading is not. However, in order to hang on to an asset, a trade must have occurred. Rather of selling their stake because of the asset's current dollar value, investors are more inclined to do so if they don't like the asset's trajectory.

A stop loss is not always implemented by investors. Instead, they will increase their stake in the asset and continue to hold it for as long as the original justification for the investment holds true.

It's vital to remember that investing isn't technically trading, but it is one of the primary factors that leads to trading in the first place. Since most trading today is typically driven by investment goals, this is why it was introduced.

1. How to start Trading Routine
2. The Two types of Traders
3. Difference between Trading and Investing
4. Best Source for Crypto Trading Strategies

Best Source for Crypto Trading Strategies:

The new handbook for crypto trading beginners is the best source for trading strategies. Beginners study cryptocurrency trading in depth and from scratch.

The book provides a wide variety of high probability trading techniques and thoroughly explains each one so that new traders may become independent and learn profitable trading on their own. The tactics in the book are adaptable to various market conditions, so the reader learns how to succeed in almost any situation.

When compared to the knowledge the reader receives from it and the substantial advantages that can be made using that knowledge, the investment is not worthwhile.

• 3. The following are typical trading methods that might help you get started and eventually make money from trading:
• • Holding - If done correctly, HODL can be rewarding. Purchase while the price is cheap and hold onto it until you believe you can no longer make any more money. Like taking off on a rocket into space only to jump off before it crashes! The majority of purchases made for holding are made at extremely low prices, and the buyers then ride the "Bulls" as they increase in value over the coming months and occasionally years.

• Buy the Dip - Purchasing an asset when its price declines is one of the oldest trading ideas ever. Purchasing when the value is low translates into money nearly quickly after the price goes back up! Please make sure to use all the relevant charts at your disposal for more precise purchases in order to confirm whether the drop is legitimate.

• Copy Trading – A novice trader should learn about copy trading and use it as a benchmark against which to measure their own abilities. Our point is that there are trading and exchange websites available today that permit copy trading. This enables an investor (you) to mimic the trades of expert traders who are registered. Please remember that you are not copying trades from "trade gods" who are infallible; rather, these are people, and jumping into copy trading without any prior trading experience can be fatal. Copy traders with caution at all times! Sample websites that offer this feature are com and 1Broker.com (1Fox.com).
• Stop Limit Order – One of the most often used tools to date and one that can be quite helpful for BTC strategies is a stop limit order. Once the desired price is reached or exceeded, the order is fulfilled. The stop limit order changes into a limit order to buy or sell at the specified price (or better) once it is reached.