Why can and should cryptocurrency be traded? My experience

Why can and should cryptocurrency be traded? My experience

1. Why do you need to trade cryptocurrency?

This type of financial market is clearly not suitable for everyone, since high volatility does not allow a normal analysis of the chart by the usual analysis methods. A very high role is played by news on the cryptocurrency market (or the price affects the news, it's hard to figure it out). The market is still very weak, subject to manipulation, so the risks are much higher than those that you could already get used to in traditional markets.

2. What are its advantages compared to other currencies and securities?

a) The advantages again lie primarily in volatility, if you take Bitcoin, drop the drop from 19k to today's prices, and just take the date 03/23/2018 and compare it with 03/23/2017, you can see that the price has increased significantly really scary and fascinating at the same time. For many, the question arises, “then if I knew that there would be such growth”. But no one knew this, like no one knows what will happen on 03/23/2019. $ 100,000 or 0.1 cents? The same Dow Jones index took 9 years to grow at 300%. Ethereum grew over the year by 17,000% (if you take the peak price).

b) Also, the advantages include, for example, the fact that you really buy an asset, if it comes to trading on cryptocurrency exchanges, which anyone can do. No matter how much a digital asset costs, you won’t have a margin call. But there are exchanges that provide short-term trading without leverage, of course, margin calling is possible.

c) anonymity. Also an important aspect of cryptocurrencies, in fact this is the main criterion why they have become so popular. But we are talking about the blockchain technology itself, if you take trade on cryptocurrency exchanges, then on the top ones, as a rule, you need to verify your identity, which kills the idea of anonymity.

Can I trade seven days a week?

This aspect can also be attributed to the pros. Trading on the cryptocurrency market is possible 24/7, no days off, holidays.

What are its flaws?

Deficiencies lie in the regulatory framework, or rather in its absence. And because of this point, everyone else is already floating, including volatility. States do not know how to relate to cryptocurrencies, most chapters do not even know the aspects of blockchain technology themselves, so they can make statements of a different nature that affect the course.

Also disadvantages include security. In fact, all cryptocurrencies are provided with only faith in technology, and most generally grow solely from the speculative interest of investors. If faith disappears, then industry itself will disappear.

To summarize, this industry is suitable for more risky traders who are ready to catch stops not 2-3%, but 20-30%, but also make a profit incommensurable with traditional markets. Personally, I know many guys who have switched to the cryptocurrency market, but there are those who are more conservative and not ready for such risks. One has only to decide what kind of traders do you consider yourself to be?

Barry Copeland

In 2003, Barry Copeland received a degree in Journalism from the University of Sheffield. He is a sophisticated financial journalist with more than 10 years of experience in the monetary business and the media.Also collaborates with top managers to consider expenses through financial research. His goal is to become a community-level organization consultant, so he plans to continue his training

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