Community post
Understanding $Crypto As A Financial Instrument
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- What is crypto currency?
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Crypto currency is a digital asset designed to work as a medium of exchange using cryptography to secure the transactions.
- What gives crypto currencies value?
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The principles are the community development & developers around the crypto currency. Therefore it is very important to join the coin's slack channel, irc or forum, to see how it’s behaving.
- Technology behind the crypto currency
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It is always good to look at the specification of the blockchain, algorithm (SHA-256, Scrypt, X11, EtHash), distributed consensus (POW, POS, MTP) & hashrate.
- Evaluating the crypto currency
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Look at the maximum supply of the currency, the market cap, current supply and price pegged to bitcoins in satoshi’s and the technology behind the currency.
Entry & Exit
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To know when to enter or exit a trade, you must look at two things, which are support and resistance. Support is when prices go down which drive buyers to buy. Resistance is when prices go up which drive sellers to sell. You can see the support and resistance by looking at the charts and the order books. The chart to get a visual of what’s going on and the order books to see at what price you would want to enter or exit. Enter when order book is strong on the buy side, exit when order book is strong on the sell side.
Conclusion!
Always keep at least 50% of your funds in BTC. You will always be able to come back to the trade in case of losses. Now that you have learned the basics, go out and apply them.
Replies (7)
Why would you assume that everything outside of bitcoin means losses?
He just means BTC is the most stable.
Let's hope it stays that way
It won't be super stable, but it will follow a predictable crocodile tooth path, upwards for years. The only rule is don't trade after a sell off, just wait (if you hold the BTC during the drop). It'll recover in a couple days, then you can continue your trading. Don't try to 'recover' the lost BTC profit, you will likely miss the recovery of BTC, as it happens quickly, and at an unknown time after the dip.
hey guys this article is based on trading bitcoin to alt coins or crypto assets
I couldn't agree more. I started buying at $190 I rode it out and it payed off.
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