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The news these days has been filled with Bitcoin, Ethereum, Ripple, blockchain technology, and cryptocurrencies. This is because cryptocurrencies have gained a lot of popularity among many investors who are looking for big opportunities to earn a lot of money. If one is interested in entering the crypto market, then he should first learn some of the basic concepts of cryptocurrency trading for beginners.
If one would want to get into the market, then he must first know how it works. Basically, one will be taking out his cryptocurrencies from his wallet, which can be a USB hard wallet or a soft wallet which is an online wallet. From there, one will connect his wallet to the exchange and then transfer the cryptocurrency to his account in the exchange.
Now, these wallets are then connected to the exchange that one wants to trade in. These exchanges are pretty much like stock or forex markets wherein one will choose a crypto and trade it. Once one connects his wallet to the exchange and deposits cryptos in the market, then he can start investing.
Now, the very concept of investing in cryptocurrencies revolve around the rules of supply and demand. In a nutshell, an increase in demand will lead to an increase in price and vice versa. The demand, on the other hand, will go up whenever supply goes down because of scarcity and value.
So with this, the first thing to take note of is fundamental analysis, which takes into consideration news. Since crypto is very liquid, then it is easily affected by supply and demand which means that news easily shakes it. For example, when the co founder of Bitcoin Dotcom said that Bitcoin was a bubble, the price automatically shot down.
Now it is very important to take note that investors do not like news where they think the commodity will crash. So for instance, when the co founder of the Bitcoin website said that Bitcoin will eventually burst, people started selling their Bitcoins. The opposite happens for when there is good news.
A second type of analysis is known as technical analysis which is the analyzing of the charts or graphs that show the action of price. In the very basics of technical analysis, one has to know of two zones namely the resistance and support. The zone or price level above the current price is called resistance level while the zone or line below the price is the support level. The two things to look out or is a bounce or breakout. If the price breaks through the support or resistance, then one will follow that breakout direction. However, if the price bounces off either levels, then one moves in the opposite direction.
If one wants to go into trading, these are the things to know. If one wants to do well, then he has to learn as much as he can. The law of supply and demand, fundamentals, and technicals are very important aspects of investing.
If one would want to get into the market, then he must first know how it works. Basically, one will be taking out his cryptocurrencies from his wallet, which can be a USB hard wallet or a soft wallet which is an online wallet. From there, one will connect his wallet to the exchange and then transfer the cryptocurrency to his account in the exchange.
Now, these wallets are then connected to the exchange that one wants to trade in. These exchanges are pretty much like stock or forex markets wherein one will choose a crypto and trade it. Once one connects his wallet to the exchange and deposits cryptos in the market, then he can start investing.
Now, the very concept of investing in cryptocurrencies revolve around the rules of supply and demand. In a nutshell, an increase in demand will lead to an increase in price and vice versa. The demand, on the other hand, will go up whenever supply goes down because of scarcity and value.
So with this, the first thing to take note of is fundamental analysis, which takes into consideration news. Since crypto is very liquid, then it is easily affected by supply and demand which means that news easily shakes it. For example, when the co founder of Bitcoin Dotcom said that Bitcoin was a bubble, the price automatically shot down.
Now it is very important to take note that investors do not like news where they think the commodity will crash. So for instance, when the co founder of the Bitcoin website said that Bitcoin will eventually burst, people started selling their Bitcoins. The opposite happens for when there is good news.
A second type of analysis is known as technical analysis which is the analyzing of the charts or graphs that show the action of price. In the very basics of technical analysis, one has to know of two zones namely the resistance and support. The zone or price level above the current price is called resistance level while the zone or line below the price is the support level. The two things to look out or is a bounce or breakout. If the price breaks through the support or resistance, then one will follow that breakout direction. However, if the price bounces off either levels, then one moves in the opposite direction.
If one wants to go into trading, these are the things to know. If one wants to do well, then he has to learn as much as he can. The law of supply and demand, fundamentals, and technicals are very important aspects of investing.
About the Author:
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