Hello to all the community in this forum, Many people request a basic tutorial here in this industry. And I also have other friends who are asking how to trade. so I made a topic here for those interested in learning crypto trading. If you have no idea about the financial market and trading, well, this can be your stepping stone, I will explain simply the things you should learn about trading. And you don't have to think that this is paid because I will do it for free and without asking anything in return, just to share my knowledge about it that's all. There are many parts to this that I will teach but for now, we will start with Basic Trading.
I know many people have made such topics, even on various social media platforms, but most of those who have seen or read it did not immediately understand it because of the depth of the words being said. So when I do this I will make sure that anyone who wants to learn crypto trading can understand it.
If people are teaching, coaching, or mentoring, there is a fee for the mentorship. But why to pay when you can study for free, It depends on the person, because there are people who find it difficult to learn something without focusing. And if you can learn it on your own and you are determined, it is not impossible because you can become a profitable trader one day.
The other trading tutorials that I see are basic but right away in trading, so people who think it's easy to trade will immediately enter the war without even a basic foundation in trading. And what will happen? they will pay a higher price, that's why in the beginner's guide I will teach all of you what you need to know about trading, So let's start.
What is TRADING?Trading is the buying and selling of securities, such as stocks, bonds, currencies and commodities, as opposed to investing, which suggests a buy-and-hold strategy. Trading success depends on a trader's ability to be profitable over time.
Personal view: All of us are probably familiar with the word "Trading" we do it almost every day of life we have and we just don't notice it. When it is said Trading it simply means "One item for another" When we bring it to the financial market such as Stock, Forex, and Cryptocurrency, it means as a trader we exchange money, shares, or coins with various traders worldwide online. But our motive why we want to enter trading is to make a profit or get money. We will buy at a low price and we will sell at a high price, a simple BUY and SELL and we will do it in the financial market. But why does the price of an asset go up and down?
Simple economic SUPPLY and DEMAND, when the demand for something increases and its supply decreases, the price will increase. When the supply of something increases and the demand for it decreases, the price will decrease. And this happens in any market in Stocks, Commodities, and Cryptocurrency.
Because of the rapid increase of an asset, traders see opportunities to buy and sell in a short period, and this happens on a daily, weekly, and monthly basis or even within a minute that you can participate in trading. In other words, Trading is making money in the short term and Investing in the long term.
Let's go to Investing,
What is INVESTING?Investing is the process of buying assets that increase in value over time and provide returns in the form of income payments or capital gains. In a larger sense, investing can also be about spending time or money to improve your own life or the lives of others. But in the world of finance, investing is the purchase of securities, real estate and other items of value in the pursuit of capital gains or income.
Personal view: This is the way of buying an asset in the belief that its value will increase in the future, in the form of income payment or capital gain. In many things we use the word Investment, like investing time in something is a form of investment.
But in financial words, this is the purchase of securities, real estate, and other things that can provide income or capital gain to an investor.
What investors usually look at in a particular asset is its fundamental value, if there is a potential for the value to increase in the future, they don't care about the daily fluctuation that occurs in the market, unlike traders.
What is the difference between trading and investing?Investing and trading are two very different methods of attempting to profit in the financial markets. Both investors and traders seek profits through market participation. In general, investors seek larger returns over an extended period through buying and holding. Traders, by contrast, take advantage of both rising and falling markets to enter and exit positions over a shorter time frame, taking smaller, more frequent profits.
https://i.ibb.co/mN7ND1r/TRADING-INVESTING.pngPersonal view: Simple Trading for short-term gains or a small profit, and investing for long-term gains or large profit. Although Investors and Traders have the same motive in entering the financial market to generate profits, they have different approaches. A trader actively participates in the market and an investor does not. A trader takes advantage of the daily fluctuation of the market to make profits while Investors is aiming for larger gains. So who is better Trader or an Investor? the answer is, it depends, do you want to be a trader or an investor? It's up to you to decide, when you expand your knowledge of the market you will discover for yourself where you fit in, be it as a trader or an investor?
What is FUNDAMENTAL ANALYSIS?Fundamental analysis (FA) measures a security's intrinsic value by examining related economic and financial factors. Intrinsic value is the value of an investment based on the issuing company's financial situation and current market and economic conditions.
Personal view: This is the analysis of the intrinsic value of an asset, good investors know if an asset is under value or over value. They study things that affect the price evaluation of an asset, such as the state of an industry. When an investor notices that the asset is undervalued, they will buy in the belief that this asset will increase in the future through a simple BUY and HOLD strategy. So far how is it doing in the cryptocurrency market? In the case of cryptocurrency, the process is different, what is measured here are the on-chain metrics such as the network hash rate when it is at an all-time high, when the addresses of a cryptocurrency projects increase, and many others. Fundamental analysis is also often used in Stocks, commodities, and Forex, but so far it has not materialized much in the cryptocurrency world because it is new to the financial world as far as I know. Right now the market is mostly driven by speculation and narrative.
Let's go to the technical analysis.
What is TECHNICAL ANALYSIS?Technical analysis is a method of visually analyzing, interpreting, and forecasting price movements using historical patterns and statistics to find potential trading opportunities.
Personal view: This is the methodology used to get an idea of where the price direction can go in the future by studying past data. Because traders believe that historical price actions in the past can indicate what may happen in the future if the price will increase or decrease. It can also be said that it is a study of mass psychology that is a combination of science and arts, technical analysis consists of studying price action, volume, chart patterns, technical indicators, and many others.
It also helps a lot in the framework of risk management. All traders use technical analysis in any market, stocks, Forex, and cryptocurrency, so if you learn it, for sure it can be used not only in your cryptocurrency, but you can also trade in other markets.
Now you wonder why it applies to all markets, they have one thing in common, Human in a world meant, the market lives on the Fear, and Greed emotions of the participants. Because when traders or investors fear the uncertainties of the market, they sell their assets at a low price, which in turn causes their prices to fall. And when they are excited because they see that the price of an asset is increasing, they don't want to be left behind and they buy it thinking that its price will increase. This is why an asset goes up or down in the market.
The Next is Market Trend,
WHAT IS MARKET TREND?is a perceived tendency of financial markets to move in a particular direction over time.[1] Analysts classify these trends as secular for long time-frames, primary for medium time-frames, and secondary for short time frames.[2] Traders attempt to identify market trends using technical analysis, a framework that characterizes market trends as predictable price tendencies within the market when the price reaches support and resistance levels, varying over time.
Personal view: This is the overall market that can go up and down, and there are two types called the Bull market and the Bear market. So, what does this mean?
Bull Market - this is the period where the increase continues, there is fluctuation but the overall trend is still up. This is the time that investors and traders are waiting for because the assets they hold continue to increase. The more greed and excitement, the easier it is to profit in the bull market and this is what most people are waiting for.
Bear Market - This is the opposite of the bull market, this is the period when the market falls, and continues to fall. This is the dreaded event of investors and traders. Because during this time the value of the assets they hold has decreased.
There are times when the market does not run up and down, sometimes it is flat and moves sideways or back and forth, or this is the so-called sideways movement of the market.
MARKET CYCLES - we have a saying "The World is Round"
this is also how the market works, sometimes we are in a Bear market and sometimes we are in a Bull market. The market will not stay in a bear market. It may take a while but everything has a limit. After a bear market, there is always a bull market. in the study of technical analysis we can easily know the trend of the market as a trader there are certain indicators we look at so we can identify them. Part 6 of this is what we will study, so far I have shared and explained only Basic ideas and understanding about trading.
So I hope this helped somehow, See u on next part
