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Crypto Bullish Insights
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#TradingPairs101 This can be defined as a group or combination of assets that can be exchanged for one another during a trade or transaction where one token is bought or sold in place of another often using an intermediary like a centralised or decentralised exchange. Few examples of trading pairs include BTC/USDT, BTC/ETH, BTC/LTC, BTC/BNB trading pairs. How to chose he best trading pairs Some of the factors that must be seriously considered when choosing a trading pairs include factors such as Liquidity, Volatility, Slippage and trading fees/ funding rates. For example, Binance exchange may charge higher fees when trading pairs such BTC/USDT compared to when trading BNB/USDT. Cheers!
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#BullishMomentum Everything will be green tomorrow. Hope you're positioned for he reaping? Stay profitable Cheers!
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#Liquidity101 Liquidity: This can simply be defined as the ease, fluidity, or dynamics with which an asset or commodity can be bought and sold without creating too much short term scarcity or abundance for a particular asset and thus impacting the normal price of the asset in an unusual and significant manner. Example is BNB or Binance coin It can also be defined as how readily and efficiently an asset can be converted to cash without taking a significant loss on the asset value. Some of the factors that influence liquidity on an asset may include: -trading volume, as more volume means more liquidity. -number of traders holding and trading a particular token. More holders and traders directly affects the rate of change or movement of an asset from sellers to buyers and vice versa, hence more liquidity. -market depth, this simply means the amount of buyers and sellers of an asset at varying price levels. More and increasing buyers and sellers of an asset even as prices continue to change for an asset also means more and deeper liquidity. Slippage: This could be defined as the difference between the expected price and the real price of n asset during a trading operation. This often results in loss of value for an asset when a trade occurs.. Slippage is often common when trading an asset with low liquidity and one of the ways to avoid significant losses as a result of slippage on low liquidity asset is to reduce Order Size and to buy or sell in smaller batches or dollar-cost-averaging in or out of a trade over a period of time. Another way to reduce slippage on a trade is to buy or sell the asset during a spike in volume. This can be achieved by placing a Limit Order or Take-Profit Order on a target price. So that's it for now. And whatever it is you trade in the hours ahead, I hope there's enough liquidity! Cheers!
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#OrderTypes101 Market Order: This is an Order Type where by a trading instruction is made and is often executed automatically at once using the prevailing market rate of he price of a token. This is type of order is executed fast and in a timely manner without much emphasis on the price of a coin or token when buying or selling. Example is placing a sell order for #BTC at $106,000 during a small rally. Limit Order: This is an Order Type where by a trading instruction is made and is often executed at a specific pre-set price for a token. This type of order is executed much slower when compared to a market order as a trader will have to wait for prices to hit specific pre-set target in order for their buy or sell orders to get filled. The major advantage of this type of order is that it guarantees selling at a specific price and is important when trading a volatile token or trading pair. Example is placing a buy order for for Ethereum at $2200 during a small market dump. Stop-Loss Order: This is an Order Type where by a trader places an instruction for a token to sell automatically and a trade closed when price drops below a pre-set value. A Stop-Loss Order is often implemented as a major risk management tool during a trading episode. This is especially useful to prevent further loses when a trade begins to go bad to avoid liquidation or complete loss of trading funds. Take-Profit Order: This is also a type of Limit Order where an instruction is place for an order to be executed when prices hit a specific target. The purpose of a Take-Profit Order is to lock in profits and gains made during a trading episode. My favourite Order Type for Spot trading is the use of Limit Order but placing a Market order may come in handy during Futures trading when you'd like to trade for volume. And sometimes a trader may need to use a combination of all the Order Types mentioned above. And If you're trading today, I hope you do so profitably. Cheers!
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#TradingTypes101 Today we'll be discussing Spot Trading and one of the best strategies when using Spot Spot: This involves investing in a coin or token & just holding until a target price is reached. Spot trading is slower and less intense than the other forms of trading & for me is the best strategy for a beginner The risks involved in Spot often come with a trader not carrying out proper research before investing in project as lot of tokens have been known to lose up to 90% of their value even in Spot To make the best of Spot trading, carefully pick out a few well researched token & follow them up You can pick up to 20 tokens over a period & continue to eliminate & trim your list until you arrive at between 3-10 tokens you can hold with some level of conviction, then you DCA Dollar-cost-averageing (DCA), it's a practice of continuously buying a particular token over time, sometimes spanning days, weeks or even months It's best to start DCAing at a good support level that's been tested over time, when the token has lost significant value as early investors continue to take profit & the tokens drop in price Before investing, monitor how well your target token recovers & appreciate in price after a small dump Look out for how it dumps during market sell-off. A fast unusual drop in price will often signal some level of manipulation & that's a token you'd definitely want to take out of your list Watch the performance of a sector or niche e.g. AI or meme, gaming or infrastructure. Currently, I prefer AI, AI memes & AI infrastructure or a token that combines these niche. Example is $VIRTUAL One major reason people avoid Spot is the amount of funds they have available to trade. Smaller investor tends to go after leverage trading and trade with anxiety, a terrible combination! In my next post, we'll talk about Margin trading We can't end without talking about the primary risk of crypto trading; the fact that one could lose all their money without getting them back forever. Let me know in the comments what you think Cheers!
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