Halving the Bitcoin network has become one of the key events on the stock market, which has fuelled interest not only old players, but also caused the release of a new. This is evidenced by recent data about the growing demand for crypto-assets on top cryptomeria such as Bithumb Global. For those who are only acquainted with the stock market and want to try their hand at trading in a new asset class, tell you what tools offer the crypto currency exchange and how to use them in cryptotrading.
To start trading cryptocurrencies, you need to select:
- The crypto — there are several types cryptocell: hot, cold, desktop, mobile and paper. They all provide different levels of security and convenience. The best option storage of cryptocurrency is to use two different wallets — hot and cold. So do most large companies working with digital assets.
- The crypto currency exchange and trading platform, which will allow you to trade, buy and sell cryptocurrencies. Such platforms can be centralized (CEX), decentralized (DEX), or hybrid, combining the quality of CEX and DEX.
- Criptoportico is a collection of crypto-assets that are collected for profit. It is best to form it in three stages: part of the currency of long-term storage (1 year and longer) part of a medium contribution (up to six months) and the Deposit for the trade for several days or weeks. Getting cryptotrading, it is advisable to diversify their investments in Deposit for trading, paying attention not only on the potential for particular coins, but also to those ways of earning offered by the stock market. Experts advise in the initial stages to select assets from the top-10 by market capitalization.
Order — a request by a trader to deal with cryptocurrency. Orders are divided into market — purchase (Buy) or sell (Sell) and pending requests for transaction at non-market price, waiting for when she will be at the desired level. For pending orders are:
- Limit (Limit) — for sale/buy at a price above/below the current market price
- Stop loss (Stop loss) orders to limit loss
- Take profit (Take profit) order to limit profits
The market-maker and market-teyker (Market maker and taker) is the market participants that create and receive orders. A market maker creates a new request transaction, increases turnover and raises the liquidity of the crypto-asset, with the host market-teyker displays the asset turnover, lowering its liquidity. In this connection, some cryptomeria for makers and takerow introduced different fee.
Exchange depth or the order Book (Order Book) — table of limit orders, which displays the nearest buyers and sellers, where the red marked applications sellers, and green — buyers. The columns of the table show the number of cryptocurrencies and the cost at which they intend to sell or buy. At the junction of these tables is formed by the spread — the difference in price is supply and demand. The lower the spread, the liquid cryptocurrency. Analysis of stock glass is an indicator of the state of the market, because it allows you to anticipate changes before they happened.
Long and short positions (Long and Short) — the usual «mode» of trade. In the case of a long position buy cheaper and sell dearer. It is believed that the growth of assets in the market is a long process, so work in this direction is also called the long. The second option means a short position, that is shorting. On the market believe that the fall in the value of assets occurs quickly, i.e. within a short time. Therefore, this position is called «short».
Stock chart — shows change cryptocurrencies over time and is a key technical analysis tool. Graphs show the price changes by using lines, bars and candlesticks.
Bulls and bears — the market is so called buyers and sellers. There is an analogy here with the nature of animals: buyers always pushed the price up, creating a demand for something, and it turns out that the price if pushing horns. Therefore the bulls and optimists, they believe that the prices on their purchased stocks will grow, and someday they will sell the asset more expensive than buying. Bulls in the market the vast majority (estimated 80%), they hold long-term investments and the bullish trend indicates a stable growth stocks and the General welfare. In turn, the bears are the sellers, who have learned to benefit from the falling market: they are usually trying to sell cryptocurrency faster, often reducing the price of the asset. Concluding the sales contract, they fix its value, and then wait until the goods will fall in price, close the deal and put revenue in your pocket. The bears are interested in the continuous decline in prices and get their way, provoking the growth of the supply of open short positions and sell as long as price is not lowered to the desired level.
Technical analysis is a collection of tools of market forecasting prices based on the cost movement in the past. In technical analysis, the same tools can be used in various markets and shopping couples with minor adjustment of parameters. Technical tools are equally successfully used on any time frames — from minutes to years.
Fundamental analysis — this type of analysis is based on consideration of financial and production market indicators that can influence the price of the traded instrument. The mood of market players, current and gaining popularity trends, production indicators — all this information can give a broad idea about the potential of the object of investment. The main disadvantage of fundamental analysis is that the given information is not enough to predict the movement of prices in some local areas. You can define a potentially good company with excellent financial performance and which has real prospects, but to determine the time of entry into short-term profitable trade having a good ratio of risk to profit is impossible.
Pattern — behavioral pattern/trade setup/market pattern. Patterns are one of the most common methods of analyzing price movements. Each pattern is always based on some idea, very simple and straightforward. Trading patterns are many, but they all derive from the classical model of the breakdown or release from certain key price levels.
For example, a centralized crypto currency exchange Bithumb Global will examine the basic elements facing capturadora in the initial stages of trading. When choosing crypto currency exchange you first need to pay attention to availability:
- Convenient ways of depositing and withdrawing funds
- Support Fiat money
- High number of trade pairs
- Information about the current status of courses cryptocurrency
- Graphs about the change in rates of cryptocurrencies
- Technical indicators
- Different levels of user verification
- The built-in crypto
- 24/7 technical support
We have previously described the process of registering, depositing and buying process of cryptocurrencies on Bithumb Global. Now let’s take a closer look at the tools available in the marketplace.
On the main page Bithumb Global a selection of the top pairs trading, where the tickers of cryptocurrencies, their value, the change of course in recent days, the daily trading volume and the graph of the price movements of the asset.
Top trading pairs on Bithumb Global. Source.
If you choose a few from this list, then Bithumb Global automatically takes the user to the Basic Version of Spot Trade. Spot trade — the terms of the transaction currency in which payment for both parties is to be made immediately. Here the user can view the latest asset price, volume of transactions, data on transactions and minimum and maximum price for the last day.
The basic version of the Spot Trade on Bithumb Global. Source.
To choose another trading pair in the top menu when you hover over the button, but the easiest way to find the right pair through the search. While the Professional Version of Spot Trade opens to the user a broader set of tools, which will be discussed further.
For Professional Version users have access to price charts in the form of Candlesticksthat look like a series of vertical lines and the display of price changes, where the top dot shows the maximum reached by price and the lower minimum. If the closing price is below the open, the candlestick will be colored red or black, and if above then green or white. Knowing the direction of price movement (the color of the candle body), we can say exactly where the closing and opening.
The price chart in the form of Candles on Bithumb Global. Source.
Also in this version of Spot Trade, users have the price chart in the form of Glass, where the red marked applications sellers, and green — buyers. Analysis of stock glass is an indicator of the state of the market, because it allows you to anticipate changes before they happened. If, for example, it is possible to note a large accumulation of orders for sales at the upper price limit, as soon as the market reaches the limit, there will be a recession, triggered by a large number of sales.
The price chart in the form of Glass on Bithumb Global. Source.
From price charts there are also different timeframes from 1 minute up to 1 week, which allows a deeper analysis of the price movements of the selected asset.
Timeframe price charts on Bithumb Global. Source.
Also in this version Bithumb Global traders have access to different Indicators. In total, the crypto currency exchange provides about 80 different indicators that will help in the technical analysis of price movement of crypto-asset.
Analyze the main indicators available on Bithumb Global:
Volume (volume) — allows you to track the number of transactions made by traders for a certain period of time. Green and red bars are indicators of the volume of transactions: the red signal decreases, the green — about its growth. Analyzing the volume of transactions on the background of the price chart, you can confirm the strength of the trend or to identify his weakness and to predict reversal. If prices are rising and volume is increasing, we see the bullish trend. Growth in trading volume in the case of reduction of prices suggests a bearish trend.
Moving average (MA) — a popular tool, as the volume. Indicator function analyzes the average prices for a selected time interval that gives a relative indication of overall price trends. If the actual price of the cryptocurrency for a long time holding above the moving average, we can assume that it will continue to grow. Accordingly, a dip below the MA signal to lower the price of the asset. For more accurate predictions, it is desirable to use multiple moving averages based on different time intervals. In the event of a dispute the true is considered to be average based on a longer period of time. If the signal from multiple moving averages are the same, we can talk about a fairly accurate forecast.
MACD (Moving Average Convergence Divergence) — trained on one moving average, proceed to the complex analysis of this indicator. The MACD tool analyzes the convergence and divergence three moving averages and could signal the beginning of a new trend. MACD also works well on different time frames and is a fairly simple and popular indicator of technical analysis.
Zigzag (Zig Zag) — auxiliary indicator, analysing the highest and lowest points of the course of cryptocurrencies and to determine the correct entry point into the market. Plus indicator in that it eliminates the noise that can skew a forecast of trend. Small fluctuations are simply not taken into account: lines connect the highest and lowest points of the price chart directly. Zigzag shows global market movements, but it only captures those changes in the past, not giving forecasts on the behavior of prices in the future.
The relative strength index (RSI) — shows the greatest efficiency in the conditions of the side trend. With the active dynamics of the exchange rate RSI can give false data. Such technical indicators are called oscillators, and apply them with caution. Algorithms indicator to analyze price changes and allow the assessment of the overbought or oversold of the asset and, consequently, to predict the occurrence of a bullish or bearish trend.
CCI (Commodity Channel Index) — CCI or commodity channel index, as the relative strength index (RSI) helps to assess the overbought or oversold of the asset. This schedule with values ranging from negative 100 to plus 100 is displayed under the current schedule and can be used on any time frames. The CCI indicator is above a hundred means that the asset is overbought, and that’s coming price reduction, in contrast, the CCI index below minus one hundred indicates the oversold of the asset and the likely growth rates. This tool also belongs to the oscillators and used during the sideways trend when there is no clear idea how the price will behave soon.
ADC and DI is the index of the average direction and direction of movement signals of a trend change. Looks on the chart as three lines: red bears, green for bulls, blue (on different platforms can be other colors) — the strength of the trend. This indicator is fairly reliable in the four-hour and daily frames. If the line of force of the trend is in the range of 10-20 points, this suggests that the trend is gaining strength, if the figure reaches 60-80 points, expect correction of the trend. Green and red lines show who sets the market mood is bullish or bearish. If the green line crosses the red, the trend is bullish, and Vice versa.
The lights on the Bithumb Global. Source.
Another available in the Professional Version Bithumb Global useful tool — Trend Line. It allows you to demonstrate in what direction the price of an asset. Dow theory, which is based on all technical analysis, suggests that no matter how the price behaved, she will always be in a particular trend. If the price behaves relatively smoothly and remains in the same range, not showing neither growth nor fall, this trend is called lateral, or flat-trend.
For a rising (bullish) trend is characterized by the emergence of a number of ascending highs, with each new peak should be higher than the previous one. Accordingly, the bearish downtrend demonstrates the point of failure (price minimum), each of which will be below the previous one.
A trend line can be constructed by two points of maximum or minimum, while mandatory third confirming. The more points form the trend line, the more confident and more stable the trend. Construction points should not be too close to each other in a time frame, otherwise the trend is not quite correct. Please note that the uptrend line is under construction under the schedule, and descending on him. It should take into account the angle of the trend line — its permanence means stability trends. Changing the angle of the trend line is called the acceleration or deceleration of price movement. The greater the angle, the trend rapidly.
Passing through the lows line is called a support line. As soon as the price reaches it, she finds there is support from the market and, starting again seeks the top. The line connecting price highs is called a resistance line. This is the level above which the value of the asset to rise. If the price breaks the support line or resistance — is a clear signal to the violation of the trend and a change in tactics by trading.
Trend line on Bithumb Global. Source.
The above is the basic trading tools available to traders the Professional Version of crypto currency exchange Bithumb Global. They will help you to understand how to analyze key metrics of the assets of the stock market, to be able to build a most advanced trading strategy.