Recently I started receiving messages on how to trade in cryptocurrency. Before I share my understanding and experience in crypto trading it is important to know that I am not a professional trader. You should seek for a professional consultant to help you trade.
There is a difference between trading in FX and Cryptocurrencies. In Cryptocurrencies, there is a fundamental analysis that may include an emerging field of data science that defines public blockchain data called on-chain metrics. On-chain analysis (or also called blockchain analysis) is an emerging field that examines the fundamental factors of cryptocurrencies to improve investment and trading decisions.
There is an actual value of a cryptocurrency like BTC which is made up of two parts: speculative value and utility value. On-chain analysis these tools will help you separate the speculative value of a cryptocurrency from its utility value.
When you study economics, you will understand that the price is determined by supply and demand. Speculation is one component of demand. Another one is the unique utility value in a product or process etc.
There are different cryptocurrency instruments to invest (most popular first)
- Bitcoin
- Ether
- Bitcoin Cash
- Litecoin
- Stellar
- EOS
- Ether/Bitcoin
- Bitcoin Cash/Bitcoin
- Crypto 10 Index
- NEO
To understand which instruments have great value, you must know how to do technical analysis (TA). The TA is a historical price action that may indicate how the market is likely to behave in the future. You will also be able to see the past performance.
In order to understand it, use the analysis in volume, chart patterns and technical indicators, and many other charting tools. It will help you evaluate a given marketβs strengths or weaknesses. It will help you decide which cryptocurrency to invest in because everything is measurable. It is all about measuring risk to manage it. If one canβt measure the risk, the probability of failure in investment is high.
I am spending my time between startup (full-time), legal contractor (part-time), and Iβm trading in the evening and on weekends. When I trade I make sure that I am following the relevant financial news, I am well-read and well-informed. Hence, as you can imagine that Iβm the type of woman who doesnβt waste time on a non-sense date or meet-up. I also donβt play with guys in their confusing dating game because I know what I want, I understand how to spend my time wisely, and I am focused. If I choose you, you are lucky because this hustle is ours.
At night, I read the news and I am updated because in recent weeks Bitcoinβs price has seemed to continue marching higher and it is so intense. I need to understand what is driving this growth. There are a wide variety of factors that continue to make Bitcoin rise in value.
The basic steps to understand is to see the above images as these are the comparisons of price without speculation, price with speculation, and the consumption of production and storage between today and the future.
Why Bitcoin is insanely marching higher these days?
According to investment news that Bitcoin broke a key resistance level making investors believe there is a further upside, publicly traded companies purchasing Bitcoin show a high level of confidence in its appreciation and increased adoption form payment application such as PayPal that will give far more people easy access to cryptocurrency. Hence, there will be more demands in the future.
To understand your technical analysis, there are many indicators to check the cryptocurrencies. I typically check the Chaikin volatility, commodity channel index, detrended price oscillator, MACD, momentum, money flox index, rate of change, standard deviation, volume, and many other indicators.
What are the most popular crypto investing sites?
There are many platforms to use;
- Coinbase
- BlockFi
- Kraken
- Robinhood
- Bitcoin IRA
- Crypto.com
- Binance
- Coinmama
Whatβs the minimum investment in crypto?
Iβd suggest that if youβre a beginner start at $50 because you must understand the risk and concepts of cryptocurrencies before you invest at a higher value.
How to calculate the ROI for cryptocurrency investment?
You may find the calculation of ROI intimidating but it is really easy and based on mathematical common sense. Literally, all you have to do is subtract the original cost of the investment from the present value of the investment and divide it by the original cost of the investment.
Return on Investment (ROI) = (present value of the investment β initial value of the investment/initial value of the investment.
For example, letβs say you purchase a property that is 10 years old. You purchased it at $50,000 and spent about $10,000 on its renovation and repairs. The real estate has developed and the property value is high, you decided to sell it. A buyer offers you $70,000 for the property. This is where you would need to calculate the ROI of your asset. It would make it clear whether selling the property for $70,000 is profitable or not. And if yes, by how much.
Return on Investment (ROI) = 70,000 β 60,000 = β
And the rate of return can be calculated by multiplying ROI by 100.
Rate of return = Return on Investment (ROI)*100
In the above example, the rate of return is 16.67.
Net profit = 60,000*β =10,000
This is a similar calculation to determine your ROI in cryptocurrency. But there are many ways to calculate an ROI and you should focus on evaluating your performance and understand the risks to get better perspectives for decision making.
Let me share with you how I trade.
Back in 2019, I built my first briefcase pc for gaming, and in 2020 during the lockdown, I built another briefcase pc for trading. The differences between the two briefcases pcs are the components, specs, and GPU. It has different abilities and performances.
I like math so in everything that I do I measure performance and understand the specifications. From the analysis, I will determine how I can speed up my work or scale and leverage the idea.
The fun part of technical analysis is that you will be able to draw it according to your own style. For example, in TA style there are the candlestick, heikin-aski, line, HLOC and mountain. You will also be able to change the colours of the rising body, line, and scale.
Hence, if you are neat and structured, you will have fun drawing your technical analysis. Β
Why trade cryptocurrencies?
Real talk: it is difficult to understand, itβs not easy to trade and itβs confusing. Imagine, I am already technically trained, and yet I still get confused in trading how much more if you are a non-technical trader who has no background in finance or economics. The struggles will be real.
But donβt worry because there are many benefits to trade in cryptocurrencies. It has experienced significant volatility due to a huge amount of short-term speculative interest. According to trade news, that between October 2017 and October 2018, the price of bitcoin rose as high as $19,378 and fell to lows of $5,851. The volatility of cryptocurrencies is part of what makes this market intense and yet exciting to trade.
My friend on Instagram asked me if one can be rich in trading in crypto. Iβd say arguably yes depends on how much you trade, and if you can strategize your trading. Cryptocurrencies are much equivalent to bonds and stocks. Thatβs why many high risky traders are trading at huge discounts with a great opportunity for investors to grow wealthy very first.
Why women must trade?
Whilst this article is for all beginners but I am particularly supportive of women who hustle. I always believe that stupid men like to waste time flirting with random chics for entertainment because they donβt know what they want, they donβt have values, they lack loyalty, and donβt understand how to invest in a good woman. Hence, if you end up with this type of guy, you must have a backup plan. And no sis, a backup plan doesnβt mean dating a better guy. A good backup plan is to create passive income, trade, or invest in the business so in case your relationship wonβt work at least you wonβt be crying in the corner because you are heartbroken and broke. When you are financially independent, you can live a quality of life and you can achieve it by making smart decisions today.
Thank you for reading.
What do you think?
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