The presence of trade cryptocurrency digital currency is increasingly in demand as an investment instrument.
This is because the value of the cryptocurrency continues to increase lucratively over time.
Therefore you need to understand the definitions, basic concepts, and mechanisms for how to trade cryptocurrencies.
What is a cryptocurrency?
Simply put, trade cryptocurrency can be understood as a digital currency.
Different from conventional currencies, cryptocurrency can be used for virtual transactions or based on internet networks.
To maintain its security, cryptocurrency will be protected by quite complex passwords.
Furthermore, this digital currency is decentralized. That is, no party becomes an intermediary in a transaction. Payments made using digital currencies take place in a peer-to-peer manner, namely from the sender to the recipient.
Nevertheless, all transactions carried out are still recorded in the system that is on the cryptocurrency network. The recording is done by the cryptocurrency miner and will get a commission in the form of digital money used.
Because it is decentralized, cryptocurrency requires computers with special and sophisticated specifications. Generally, use the Blockchain platform so that digital currencies can be used for transactions
Blockchain like a ledger that contains a database, anyone can access this platform even though they don’t do virtual money transactions at all.
Why trading cryptocurrency with TenkoFX?
Having experience since 2012, this company has become a reliable broker, you can crypto trading using the MetaTrader 4 platform.
Cryptocurrency is currently one of the most popular businesses among forex traders who have now penetrated crypto trading.
The advantage of opening a trading account with TenkoFX
- Scalping is allowed
- Hedging is allowed
- 29 pairs with BTC, LTC, ETH, BCH, DSH (DigitalCash), ETC, XRP
- Market execution, slippage possible, no requotes
- Algo trading is allowed
- Minimum deposit 10$.
Type of cryptocurrency.
Basically, cryptocurrency has been developed since the 1990s.
However, about 10 years ago it was only popular among the world community.
Currently, there are several popular types of cryptocurrency, including Ethereum, Litecoin, Ripple, Monero, and the most popular is Bitcoin.
Besides the names of these cryptocurrencies, there is still more than 1000 cryptocurrency that is now circulating throughout the world.
By its creator, Satoshi Nakamoto, Bitcoin has only created up to 21 million coins in accordance with the agreed protocol.
This number is predicted not to be mined until the upcoming year 2140.
You can transact with Bitcoin through computer devices, without intermediaries of banks or other financial institutions.
Bitcoin miners tend to be less risky because they will not suffer losses due to counterfeiting or inflation as well as conventional currency printed.
Cryptocurrency transaction mechanism.
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Trading Cryptocurrency transactions offer considerable flexibility because they can be done anytime, anywhere and from anywhere in the world.
Only with a smartphone or PC connected to the internet, you can transact either sending or receiving some money without going through an intermediary.
Even transactions using cryptocurrency can be completed in minutes without worrying about downtime.
For example, when you will send money to a recipient. Both parties will be informed about the amount of the transaction.
Also equipped with a digital signature through the private key into the cryptocurrency system used.
This confirmed transaction is then permanently stored. No anyone can change, hijack, or even falsify the record.
Because it is permanent, all transactions using digital currency cannot be canceled for any reason.
For this reason, those of you who have just set foot know what cryptocurrency should be, you should be wiser before making a transaction.
How to determine the value of cryptocurrency.
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Since cryptocurrency is created with cryptography that is uniquely encrypted, it is not unusual for its value to depend on market mechanisms.
Keep in mind, the value of each type of cryptocurrency is the same as financial products in general.
When demand is increasing while miners are few, the cryptocurrency value will increase. For example, Bitcoin is only available as many as 21 million since it was first created so that it has a relatively higher value than other types of cryptocurrency.
In other words, the value of the cryptocurrency currency is volatile which can easily increase or decrease according to the availability of trust of the user.
Some time ago, the value of cryptocurrency was also affected by the WannaCry attack which increased the number of transactions using cryptocurrency.
It is important to know that currently, the top ranking in cryptocurrency activities is Bitcoin with a market capitalization of USD63.6 billion, followed by Ethereum which has a capitalization value of USD12.9 billion.
How to trade cryptocurrency and make money?
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The famous trading cryptocurrency market or digital currency for a range of extreme price fluctuations, this attracts traders to learn crypto trading methods
And the majority of people trade Bitcoin to make a profit.
Thus, it is clear that you cannot do it carelessly but must understand the basic techniques first.
The most basic technique starts with recognizing market conditions which are generally divided into the following 3 conditions:
1 Super Positive Market Conditions
Super positive market conditions are a condition where Bitcoin prices tend to continue to rise throughout the day.
By remembering the principle of Bitcoin trading, “Buying at a low price and selling it at a higher price”, you could say that this market condition is very supportive.
You can enjoy small increments until the market increases become saturated.
When the market is saturated, take a break to buy a moment until the price can go down again.
2 Super Negative Market Conditions.
Contrary to the first market conditions, super negative market conditions indicate a decline in prices in Bitcoin trading
When the market conditions are like this, you should not force yourself to trade because you will most likely suffer losses. Unless you really think of long-term investments.
3 Stagnant Market Conditions.
The third condition in Bitcoin trading is when the market conditions are stagnant or the price of Bitcoin doesn’t change.
Generally, market conditions like this make investors bored but this market condition can also be giving profit.
This is possible for Bitcoin traders who do scalping (trading in very short term conditions, less than 1 hour with frequency often and with small sales targets).
Price movements when the conditions are stagnant are very predictable, hence by entering to open trades at price net at a low and determining the selling price slightly higher than that price. You will automatically get profit in this way.
Bitcoin Trading Strategy To Bring Success.
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Experience is needed to be able to see the Bitcoin trading process as a whole, where you will learn from mistakes and how to solve them.
Through some Bitcoin trader experience, there are 5 strategies that you need to pay attention to when buying and selling Bitcoin as follows:
1 Day Trading.
Day trading is a Bitcoin trading strategy where you open and close trading within one day.
The aim is to make profits quickly from intraday price movements.
This strategy avoids the costs and risks associated with holding positions more than a day. However, full attention and focus are needed to carry out this strategy.
Scalping is a form of high-frequency day trading, where your goal is to get a small profit from buying and selling in large quantities.
This strategy includes opening positions that are in line with the trend, and often enter and exit the market many times as it develops.
Individual trades will be held in only a few seconds to the longest minutes, so you could say this strategy is the strategy with the shortest period of time.
Scalping is arguably an effective trading strategy in handling assets with extreme ranges of price fluctuations (volatility) such as Bitcoin.
3 Trading Trends.
Like scalping, the trading trend is a type of trading that uses an opening position that is in line with the trend.
But the difference is your goal to maximize profits by holding open positions as long as you can, rather than moving positions quickly.
This strategy can apply short, medium, and long term because the trend can develop in any period of time.
Using this strategy means you need an understanding of technical indicators that can be used to identify trends, including the impact of the latest news and economic events on the market.
4 Swing Trading.
Swing trading focuses on price oscillation in a trend, aiming to get the maximum possible profit in market volatility by moving in both directions as the trend develops.
Even though this one strategy opens up more opportunities to make a profit, you will find it difficult to sell and buy at certain price movements.
This is also caused by the difficulty of identifying the movement or swing that will occur.
Similar to trading trends, this strategy requires an understanding of technical indicators and factors that will influence market movements.
5 Position Trading.
Position trading involves the activity of holding positions for more than one day, usually reaching weeks, months, and years.
The reason is that you want a position with less buying and selling than other strategies mentioned earlier.
If you are looking for a long-term position in the Bitcoin trading strategy, this strategy is very suitable. For example, by considering the technology, rate of adoption, and competitors.
Tips on Trading Bitcoin and Other Cryptocurrency.
A strategy is useful in decision making, but there are still many other factors that can determine your success as a trader.
Learn about Bitcoin.
In investing, similar to any investment, you must know the ins and outs clearly before you start playing in it.
Especially in the ever-growing Bitcoin market, of course, there is always new information that you can obtain.
Determining Goals Clearly.
Similar to any investment, you must have a clear goal before making the investment.
Thus you know exactly where you want to go and how to position yourself.
Ideally, there are 2 general views in Bitcoin trading, namely:
- Only want to collect Bitcoin.
- Pursue profits by buying and selling.
If you decide to become a Bitcoin trader, then you have to focus on collecting profits, not collecting Bitcoin.
Specify the target.
When selling Bitcoin, you need to leave far away, whose name is greedy.
You need to have a sense of satisfaction with your achievements instead of always thirsting for something more.
One easy way to avoid this greed is to determine the sales target at the beginning so that when the target is reached you can feel satisfaction.
Smart Analyzing Market Conditions.
There are several market conditions that will affect crypto trading techniques.
When you are able to analyze market conditions well, you can determine what actions should be taken to make a profit.
This is where stable emotions return to influence, because you have to base actions on market and data conditions, not with emotions.
Able to estimate market prices.
Here you need to understand certain indicators to help you estimate prices in the future.
If you have previously played forex trading, then the fifth point is generally easy.
Cryptocurrency trading can now be done not only through the exchange, but with TenkoFX also providing crypto account services, this makes it easy for traders who have joined brokers to trade on available cryptocurrency trading instruments.
In addition to forex, cryptocurrency trading is also possible to achieve maximum profits, but must be with a good understanding of market dynamics and changes that occur.