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The crypto handbook for beginners
Do concepts such as blockchain or scalping mean nothing to you? MASTERS explains it for you together with Anycoin Direct. Learn from the Masters.
We don't have to tell you anymore that cryptocurrency hot and happening and that everyone nowadays trades in it. But say terms like blockchain of scalping nothing to you now? M puts it together with Anycoin Direct ahead of you. Learn from the Masters.Text: Patrick Stoffer Let's start at the beginning: cryptocurrencies are digital currencies that can be used as a means of exchange in the Netherlands to make purchases. However, the Dutch Bank (DNB) does not consider cryptocurrencies as legal tender, because these coins often fluctuate in value. This is also one of the reasons why many people invest in cryptos. You can make a lot of money with it, but at the same time you can also lose a lot.
Blockchain
All cryptocurrencies have a database consisting of a long chain of blocks, also called a blockchain. This blockchain technology is a network of computers that stores all crypto transactions ever made. Think of it as a digital cash book that shows who paid what to whom. Every computer in the network has a copy of the same blockchain. As soon as someone wants to make a new transaction, it is checked by the other computers. If it is approved by the majority of those computers, a new copy will be made and the database will be up to date again.
There are several (trade) roads that lead to Rome
It is well known that you can make a lot of money trading cryptocurrency. The big difference is the way of trading, or trading. There are many ways to buy and sell crypto, but these are the most common.
daytrading
With this method of trading you make multiple 'trades' within one day. You benefit from price fluctuations during that trading day. For example, you buy a cryptocurrency in the morning and sell it again in the evening. As a day trader you must have a lot of knowledge and experience. You can learn this by practicing with demo accounts, for example. A well-known day trader is Ross Cameron, in 2016 he made more than € 200.000 profit. He shows what his strategy is on his YouTube channel Warrior Trading.
Scalping
This is the more extreme version of day trading. Of the four methods, scalping is the fastest. Scalpers make trades between small increases and decreases in the price. A trade therefore only takes a few seconds to a few minutes. The profits per trade are not much, but because you make multiple trades it can still be profitable. This way of trading suits people best who can make decisions quickly and without any doubt. Above all, it requires a lot of concentration.
Swing Trader
Swing trading is a form of trading where you expect a profit within a short period. This could be days but also months. As soon as there is a profit to be made, it is quickly grabbed. As a swing trader, you should not get nervous if you are busy with something other than your cryptocurrencies. The trades that are made are often based on trends and long-term plans.
Position trader
Finally, we discuss the form of position trading. The long-term vision of the coin is very important. You buy a coin that you think will grow in the future. You can assume that you will hold this coin for years to come. Even if you have a big loss at some point, you hold on and continue to believe in this coin. It is important that you keep track of the developments of this crypto and always critically assess it. A popular example is Bitcoin: as many as 79,5% percent of Bitcoin holders have owned this coin for more than 155 days, which are considered long-term investors.
You will have to find out which form of trading suits you best. Pay special attention to the amount of time you want to invest in the research. There is money to be made with every trading strategy. In addition to all the success stories you hear from others, there are certainly also traders who lose (a large part) of his/her money. Be aware of the risks that trading in cryptocurrencies entails. You can find many tips and tricks online on how you can minimize these risks. Make sure you enter the crypto world prepared.
Watch, watch, buy?
Bitcoin is currently the most popular cryptocurrency out there, but there are thousands of alternative cryptocurrencies (altcoins) that you could buy. Each crypto has its own mission, vision and applications, but there is also a difference in the speed at which your transaction is processed. What should you research if you want to find out whether or not you should buy a crypto?
Technical analysis
Within this analysis, people look at the historical price charts. Indicators and patterns are looked for. This data is used to predict the future prices of the cryptocurrency. To master this, you need to practice a lot and read about technical analyses.
Sentimental analysis
In this analysis you are looking for opinions from people on the cryptocurrency. You can use communities such as reddit.com. Here you can see, among other things, what others think of a particular cryptocurrency and how they deal with news. It is especially important that you do your own research and form your own opinion about the news.
Fundamental Analysis
This analysis is often considered the most valuable analysis. For example, you look at the problem that the coin can solve. Take Bitcoin as an example: Satoshi Nakamoto (the creator of Bitcoin) wanted to create a currency that is decentralized. Bitcoin can, among other things, combat currency inflation.
In addition, within this analysis you can look at:
- The whitepaper: a written explanation of the cryptocurrency;
- Road map: the (technical) development plan of the cryptocurrency;
- The team behind the cryptocurrency.
Now that you know everything, you can start trading. You can do this via the Anycoin Direct, where a support team is also ready to help you.
