Nowadays, more and more people are paying attention to currency speculation in the currency circle, but there are very few people who really understand it. Newbies don’t know where to start. Today I will share with the novices in the currency circle some basic knowledge about the currency circle. .
1. What is currency speculation?
In this article, let’s first talk about currency speculation. In fact, currency speculation is similar to stock speculation, real estate speculation, and foreign exchange speculation. They all make profits by buying at low prices and selling at high prices to earn the price difference.
For example, if you think house prices are going to rise, buy a house immediately, wait until it has almost risen, sell it, and make a big profit. The difference is that currency speculation is about digital currencies and a freer trading mechanism (non-stop trading 24 hours a day) ), greater profit potential (no price limit), making digital currency an investment target with a return on investment that far exceeds that of traditional stock markets, futures markets, funds, real estate, etc.
2. What is an exchange?
An exchange is a platform for trading digital currencies. The three major exchanges currently used are Huobi, Binance, and OK.
There are many other small exchanges, just like the four major banks and various other banks. The security factor of using the top-ranked exchanges is very high, and you can trade with confidence. Some coins can only be traded in a few special transactions. purchased.
3. What is USDT?
Exchanges are places used to trade digital currencies such as Bitcoin. Trading digital currencies requires an intermediary currency, also called a stable currency, namely USDT. This is also our most commonly used fiat currency.
USDT, called Tether, is a virtual currency that links cryptocurrency to the legal currency US dollar. It is a virtual currency that is stored in a foreign exchange reserve account and supported by legal currency. You can simply understand it as US dollars.
Tether USDT (USDT) is a token Tether USD (hereinafter referred to as USDT) launched by Tether based on the stable value currency US dollar (USD). 1USDT=1 US dollar.
The exchange itself cannot directly sell or buy virtual currency, nor can it sell you USDT, nor can you or the exchange buy it. If you want to buy coins, you need to first buy USDT with RMB, and then exchange USDT for the digital currency you want to buy. If you want to sell coins, you need to convert your digital currency into USDT and then sell it into RMB. Once you have USDT, you can exchange it for any digital currency on the exchange. This is called currency trading.
4. Basic terminology for playing coins
Position: refers to the ratio of the investor’s actual investment to the actual investment funds.
Full position: all funds are bought into virtual currency.
Lighten your position: Sell some of the virtual currency, but not all of it.
Heavy position: Compared with funds and virtual currency, virtual currency accounts for a large share.
Light warehouse: Compared with the virtual currency, the capital share is larger.
Short position: Sell all the virtual coins you hold and convert them all into funds.
Take profit: After obtaining a certain amount of profit, sell the virtual currency held to keep the profit.
Stop loss: After the loss reaches a certain level, sell the virtual currency held to prevent the loss from further expansion.
Bull market: Prices continue to rise and the outlook is optimistic.
Bear market: Prices continue to fall and the outlook is bleak.
Long (long): The buyer believes that the currency price will rise in the future, buys the currency, and after the currency price rises, sells it at a high price to take profits.
Short (short-selling): The seller believes that the currency price will fall in the future, sells part of the currency he holds (or borrows currency from the trading platform), locks the position and takes profits after the currency price drops to a certain price. At the same time, he can avoid risk.
Open a position: buy virtual currency.
Cover position: Buy virtual coins in batches, for example: buy 1 BTC first, and then buy 1 BTC later.
Rebound: When the currency price falls, the price rebounds and adjusts due to the rapid decline.
Consolidation (sideways): The price fluctuation is small and the currency price is stable.
Falling: The currency price is slowly declining.
Diving (Waterfall): The currency price drops rapidly and by a large margin.
Cutting meat: After buying virtual currency, the price of the currency falls, and in order to avoid expanding the loss, sell the virtual currency at a loss. Or after borrowing currency to go short, the currency price rises, and you lose money by buying virtual currency.
Hold-up: The currency price is expected to rise, but the currency price falls after buying unexpectedly; or the currency price is expected to fall, but the currency price rises after selling unexpectedly.
Unwinding: After buying a virtual currency, the price of the currency fell, causing temporary book losses, but then the price of the currency rebounded and the loss turned into a profit.
Shortage: After selling the virtual currency due to being bearish on the market outlook, the price of the currency continued to rise, and I was unable to buy it in time, so I failed to make a profit.
Overbought: The currency price continues to rise to a certain height, the buyer's power is basically exhausted, and the currency price is about to fall.
Oversold: The currency price continues to fall to a certain low, the seller's power is basically exhausted, and the currency price is about to rise.
Luring bulls: The currency price has been consolidating for a long time and is more likely to fall. Most of the short sellers have sold the virtual currency. Suddenly the short sellers pull up the currency price, inducing the bulls to think that the currency price will rise and buy one after another. As a result, the short sellers are suppressed. The currency price has locked up many parties.
Short-selling: After bulls buy virtual currency, they deliberately suppress the currency price, making short sellers think that the currency price will fall, and sell them one after another. As a result, they fall into the trap of bulls.
5. What are mainstream digital currencies?
Mainstream coins are value coins. Bitcoin is the largest and Ethereum is the second. Some people think that only these two are mainstream digital currencies. Some people think that the top ten exchanges by market capitalization are the mainstream digital currencies. Some people think that the top ten exchanges by market capitalization are mainstream digital currencies. Only those digital currencies that are listed on mainstream exchanges are considered mainstream digital currencies.
Let’s take non-small numbers as an example. We can see the market capitalization ranking of related currencies. Mainstream currencies rank high, for example, Bitcoin’s market capitalization firmly occupies the first place.
Generally speaking, currencies with a higher market value ranking have high market recognition, good liquidity, and high investment value; conversely, currencies with a lower market value ranking have low recognition, poor liquidity, and correspondingly higher investment risks. High, users are advised to buy with caution.
6. Risks of currency speculation
Perhaps the most pertinent piece of advice when it comes to investing in cryptocurrency comes from Ethereum founder Vitalik Buterin: Don’t invest any money you can’t afford to lose. Again, I would like to remind all novices to act according to their ability. It is recommended not to borrow money, loans, mortgages, or use credit cards to participate in this type of investment, especially playing with contracts.
7. How to play the contract
Cryptocurrency trading is a spot transaction. If you want to make money in rising or falling market conditions, you must do contract trading. Contract trading is opposite to currency trading and is a futures transaction. In other words, the subject matter of these transactions is standardized. Zhang's contract.
You can pay a certain percentage of margin, borrow part of the digital currency, choose to go long when the market outlook is bullish, or go short when the market outlook is bearish, or you can trade in both directions, open both long and short positions, and hedge risks. Therefore, you can make money through contract trading regardless of whether the market is rising or falling, which greatly improves the utilization rate of funds.
The margin payment ratio here corresponds to different leverage. For example, if you judge that the market outlook for BTC is bearish and you want to open a short order for 100 BTC, you only need to pay a minimum margin of 1%, which is 1 BTC, and you can borrow 100 BTC, which is 100 times leverage, which is equivalent to using 1 BTC. The funds leveraged the income of 100 BTC. After borrowing, you immediately sell and wait for the decline. If BTC drops from 35,000 US dollars to 34,000 US dollars, immediately buy back 100 BTC and return it to the platform. You will receive (35,000-34,000)* 100 = US$100,000 profit. If you don’t use contract trading, you can’t profit from this decline. If you don’t add 100 times leverage, you can’t get 100 times the profit. This is a contract.
Beginners should not play with contracts! Beginners should not play with contracts! Beginners should not play with contracts! Say important things three times! Contracts seem like the fastest way to get rich, but they are by no means the shortest way. The "quick" mentioned here is more often about the speed from liquidation and bankruptcy, rather than the speed from freedom of wealth.
8. Three essential elements for currency speculation
1. An Android phone. (Android is more convenient, Apple easily loses certificates) Android phones are also necessary for playing projects.
2. Spare money. If you lose money that is not urgently needed in the near future, it will not affect your quality of life.
3. Mentality. There are risks in currency speculation, and people who are concerned about gains and losses should not get involved.
The currency circle is not the only way to make money by speculating on coins. There are so many ways to explore. The returns are always directly proportional to the investment. I hope that you and I can both gain something in the currency circle.
This article does not serve as any investment advice, but is merely an explanation of the current situation and terms. #荣耀时刻 #崛起