Full guidance for Beginners in Cryptocurrency Trading 2022

 Full guidance for Beginners in Cryptocurrency Trading 2022

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What IS WORK;?

Trade is a basic economic concept that involves buying and selling goods. These can be goods and services, where the buyer pays the seller. In some cases, goods and services may be involved in transactions between the parties to the agreement.

In the case of financial markets, current assets are called financial instruments. These can include stocks, bonds, forex currency pairs, options, futures, margin products, cryptocurrencies, and more. Don't worry if these terms are new to you - we'll explain them later in this article.

The term trading is generally used for short-term trading, where traders are in and out in a relatively short period. However, this is one of the few misconceptions. In fact, trading can refer to a variety of methods, including day trading, swing trading, trend trading, and more. But don't worry. We will look at each of these in more detail later.

What is an investment?

Investment is the transfer of resources (such as money) with the expectation of return. This may include using the money to fund a business plan and start-up or later buying the land to resell it at a higher price. In financial markets, this often involves investing in financial instruments in the hope that they will be sold later at a higher price.

Expecting a return is an important part of the concept of capital investment (also called return on capital). Unlike corporations, investing usually involves long-term wealth. The goal of the investor is to make money over a long period (years, or decades). There are many ways to do this, but investors often use basic information to find the best investment opportunities.

Because of the long-term nature of liquidity, investors are generally not bothered by short-term cost reductions. That way, they would be completely out of work, without having to worry about short-term losses.

Trade vs. Investment - What's the Difference?

Traders or investors want to take advantage of financial markets. However, their strategy to achieve this goal is quite different.

In general, investors seek long-term returns - think of years or decades. As the investment time increases, so does the profit target of each investor.

Traders, on the other hand, try to take advantage of market declines. They enter and exit consecutive positions, and can make small profits on each trade (because they often participate in multiple trades).

Which is the best? Which one suits you? It is up to you to decide. You can start by educating yourself about markets, and then learn. As time goes on, you will learn what is best for your financial goals, personality, and business.

What is Fundamental Analysis (FA)?

Fundamental analysis is one of the ways to assess the value of financial assets. A fundamental analyst examines economic and financial factors to determine if the value of an asset is fair. These may include macroeconomic conditions such as macroeconomic conditions, industry conditions, or trading conditions that constrain the assets (if any). They are usually followed by known and lagging macroeconomic indicators.

Once the baseline analysis is complete, the analyst's goal is to determine whether the activity is low or high. Investors can use this research when making their investment decisions.

In the case of cryptocurrencies, basic analysis can include an emerging field of data science that integrates into public blockchain data in China, called a matrix. These metrics can include network hash rates, first owners, number of addresses, transaction analytics, and more. Using a large amount of data available on public blockchains, analysts can create complex technical indicators that measure part of the overall health of the network.

Although fundamental analysis is commonly used in the stock market or in forex, it is currently less suitable for cryptocurrencies. This asset class is so new that there is only one standard and comprehensive framework for market prices. Furthermore, it is comparison and tradition that drives most of the market. Therefore, the underlying factor often has a disproportionate effect on the value of the cryptocurrency. However, once the market is mature, more accurate ways of thinking about valuing corrupt assets can be developed

What is Technical Analysis (TA)?

Technical analysts work differently. The basic premise behind technical analysis is that historical prices can show how the market will perform in the future.

Technical analysts do not try to determine the true value of an asset. Instead, they look at past business activities and try to identify opportunities based on those. This can include cost negotiation, volume analysis, chart models, the use of technical indicators, and many other charting tools. The purpose of this analysis is to assess the strengths or weaknesses of a particular market.

But technical analysis isn't the only way to predict future price movements. It can also be a useful framework for risk management. Technical analysis makes the business simpler and more scalable as it provides a model for analyzing the market structure. In this context, measuring risk is the first step in managing it. This is because some technical analysts are not strictly considered traders. They can also use technical analysis as a pure risk management framework.

The technique of technical analysis can be applied to any financial market and is widely used by cryptocurrency traders. But does technical analysis work? As mentioned above, the value of cryptocurrency markets is largely determined by measurement. This makes them an ideal playground for technical analysts where they can only improve by considering the technical factors.

Fundamental analysis or technical analysis: which is better?

It totally depends on your trading strategy. In fact, why not use both? Most market analysis methods work best with other methods or indicators. As such, they are more likely to find more reliable investment opportunities. Combining different business strategies can also help you eliminate bias in decision-making.

This concept is sometimes called confluence. Consolidation traders develop several strategies that will benefit all of them. The idea is that the business opportunities provided by joint strategies can be stronger than the opportunities provided by a single strategy.

What drives the financial markets?

The value of an asset is determined exclusively by the balance between supply and demand. In other words, it is a decision made by the seller and the buyer. When supply meets demand, there is a market. But what could be the value of a financial asset?

As we said before, there can be a fundamental factor, such as the state of the economy. There may also be technical factors such as the market capitalization of the cryptocurrency. There may be other factors to consider, such as market sentiment or the latest news.

However, these are the only factors to consider. What really determines the value of an asset is the balance between supply and demand at any given time.

What is the market trend?

Market trends are a common direction in which asset prices move. In technical analysis, market trends are usually determined by moving prices, trend lines, or a moving average here.

In general, there are two main types of market trends: a bull market and a bear market. A bull market is a constantly growing trend and prices are constantly rising. As the downward trend of the beer market continues, prices continue to rise. In addition, we can identify choppy or "sideways" markets where there is no clear trend direction.

It should be noted that market trends do not mean that prices will always be in trend. A long bull market is going into a downtrend and vice versa. This is the nature of market trends. This is a matter of perspective, as it all depends on the timeframe you have in mind. Long-term market trends mean more than short-term market trends.

A feature of market trends is that they can be identified quite accurately. Why did you have a misconception in the past regarding people's tendency to believe they made accurate predictions before an accident occurred? As you can imagine, identifying lagging market trends can have a significant impact on the business decision-making process.

What is the market cycle?

You may know the reason for the phrase "cycling market". A cycle is a pattern or event that occurs at different times. In general, long-term market cycles are more reliable than short-term market cycles. However, the average person still couldn't do that.

The market is all about nature. Because of the cycle, some asset classes may outperform others. In other parts of the same market cycle, similar asset classes due to different market conditions can prevail over other asset types.

It should be noted that it is almost impossible to locate us in the current market cycle at any time. This analysis can only be done more accurately when this part of the cycle has been completed. There is at least a strong beginning and an end to market trends. As it turns out, the financial markets are currently in a very volatile situation.

TO BE CONTINUE