Cryptocurrencies are digital currencies which are encrypted. The basis on which cryptocurrencies work is called the block chains. The blocks are ledgers of transactions which contain a hash of the previous block, a timestamp and transaction data. A blockchain is made up of thousands of blocks. Each of these blocks is connected to the other using cryptography. Trading in cryptocurrencies basically means buying and selling of these digital currencies in the global decentralized market.
The cryptocurrency market is volatile and unpredictable unless the signs for trading are read correctly. Here is a list of trading signs that should give a trader clue about buying or selling currencies. However before one even starts trading, the two basic requirements that must be understood are :
1) Cryptocurrency Exchange:
The platform through which a trader buys, sells, exchanges and invests in cryptocurrency is an exchange. In these exchanges, cryptocurrencies can be traded using fiat money.
2) Cryptocurrencies exchange C2C:
This exchange allows cryptocurrency to cryptocurrency trading.
3) Cryptocurrencies Wallets:
Digital encrypted space, where a trader stores the passwords to his coins.
4) Customized buying:
While buying a cryptocurrency a trader does not necessarily have to buy the whole coin. He can buy bits and pieces of the coin.
Trading method :
Cryptocurrency trading has a basic set up of trading :
- Choose the coin;
- Choose a wallet; &
- Choose a payment method
This is the basic information which is imparted to the new traders when they attend Crypto currency and Forex trading workshops.
Trading Signs :
1) Not everything for everyone:
If an individual is interested in trading and wants to make profits, as a trader there are two virtues of trading that must be ingrained: Patience and Interest. Interest will help a trader understand the market and enjoy trading, whereas patience will help a trader for the long-term haul that cryptocurrencies need. If any of these two do not apply, it is time to sell the cryptocurrencies and relax. If this market interests a trader, he or she would automatically spare screen time wherever needed to keep abreast of the trends. Without these efforts, a lot of buying and selling opportunities are lost.
2) Price rise equals to selling opportunity:
Like in any trading market, inflation or price rise of an asset calls for a trader to sell. Kishore M, Crypto and Forex market expert says, “The fundamental rule is to sell for more than what the coin was bought for. Hence when the price of the cryptocurrency rises high it is time to sell. On the reverse, when the prices drop it is time to buy the cryptocurrencies. Later on, the cycle will repeat itself when the prices go up”.
3) Taxing on pocket:
Crypto currencies need money to buy. This is an investment and carries an immense risk with itself. If an individual buys cryptocurrencies as an investment and is pinning hopes on it as savings, it is time to sell. Let’s face it. A market as unpredictable as cryptocurrencies is not for everyone. Unless blessed with a solid financial stability, cryptocurrencies are not to be treated as savings. In this case, it is a sign to sell the cryptocurrencies. Retain just the number of coins, the loss of which will be bearable. On the other hand, if an investor has the ability to bear the loss and is patient enough, more investments would be a wise move. Yet it is advisable not to over-invest.
4) Doubts about the currency being a profit maker? :
Investment in cryptocurrency is a long-term wait. Yet life’s emergencies can be as unpredictable as the Cryptocurrency market itself. In case there is an emergency, go for the liquidation of the cryptocurrencies. Savings are, after all, meant for such rainy days. Sell for the amount needed and keep the rest. Kishore M, Dubai based Crypto and FX expert says, “One of the many advantages of Cryptocurrency is its decentralized aspect. Hence these currencies can be globally used. If your emergency demands, you may sell your coins or else you can pay by crypto if the payee source accepts it that way. I believe crypto to be the future of safe transactions for the simplest of the reason: they are way too easy to pay up in”.
5) No Profits? :
Each investment or trading is made with one goal in mind: profits. If an investor had invested for long enough, traded in various currencies and yet not made any profits, it is probably a sign to call off the investment, sell and quit the market. However, a trader who is able to see the opportunities and optimize on the same has better chances of making profits and should, therefore, buy into cryptocurrencies within the comfort zone. This, of course, does not negate the chances of a trader making loses.
Crypto currency market is not for everyone. Unless a trader is persistent and can bear losses, it is not meant for him or her. The signs of buying and selling in the crypto currency market is not much varied from the other markets. The key is to understand if a trader is meant for the Crypto market.