What Basic Concepts Of Crypto Trading Are Important To Know Before Getting Started
In order to start your activity as a crypto trader, you will need information training. Here are the basic concepts that even a newbie trader should know.
The name of this concept comes from the English «stablecoin», literally — «stable coin». It speaks for itself, because stablecoins are cryptocurrencies whose value is tied to the value of fiat money or gold. Such coins have much less volatility, but are not decentralized, as they are tied to a centralized financial reserve.
Everything is simple here. Any coin other than Bitcoin is called an altcoin. You can also earn money on altcoins provided that you regularly and carefully monitor the market and invest in promising coins. You only need to buy them on trusted platforms that care about the security of their users' transactions and data, such as BTC-Alpha. And you can track information on altcoins on special sites like CryptoMarketCap. Parameters that you need to pay attention to: capitalization, price, number of coins in circulation, volume and changes during the day, schedule for the week.
Japanese candlestick, or simply candlestick, is a type used for technical analysis of financial assets. This chart migrated to the world of cryptocurrencies from the world of traditional finance. It allows you to track price changes over a certain period of time. The candlestick consists of a body and shadows, where the bottom and top of the candlestick show the open and close prices, and the shadows show the minimum and maximum prices. The candlestick is colored green when the market is bullish, red when the market is bearish (sometimes white and black, respectively). If the candlestick is very short, it is called a “doji” and indicates little market activity or high volatility. Candlesticks are convenient because they visualize basic information about assets well, and also immediately make it clear about trends over a certain period of time.
As we can see from the previous paragraph, the red chart is the predominance of bearish candles in the market. This means that users are massively selling currency, and it drops in price. This period is considered favorable for the purchase of cryptocurrency, but before making a decision, it is worth analyzing the price dynamics in recent years so as not to incur losses.
Here everything is exactly the opposite — the predominance of bullish candlesticks, massive buying of currency and an increase in its price. During this period, you can sell the currency at a higher price than you bought it. The main thing is to track the peak value of its price.
Buy order is an exchange order to buy or sell a cryptocurrency. A regular order is called a market order, but there are also pending orders, which are divided into limit, stop and stop-limit. A buy order is an order to purchase currency at a specified price or below. A buy limit order is placed below the market price when the trader expects the price to rise later.
Sell order is an exchange order to sell a currency at a specified price or higher. Here everything happens according to the same principle, but vice versa — a limit sell order is placed at a price higher than the market price with the expectation that the currency will fall in price.
Order Book / Market Depth
Depth of Quotes/Prices, Market Depth — an overview of buy and sell orders on the market in real time. It contains all placed orders on the market, including all types of transactions (Order Book).
Fiat Funds Deposit
Fiat Funds Depositing means transferring fiat funds from your bank card or wallet in the payment system to a cryptocurrency wallet for the purpose of performing operations with cryptocurrency.
Withdrawal Of Funds
It means withdrawal of your funds to a bank card or wallet in an affiliate payment system. The exchange charges a commission for this operation.
These are the basic concepts in crypto trading, without which it is impossible to start trading cryptocurrencies.