Cryptocurrency trading is in demand due to the fact that in a short time you can increase your initial capital several times. Speculative transactions on a cryptocurrency exchange are not much different from trading shares on stock markets or currencies on the Forex market. The principles are the same - buy low and sell high. The only trading instruments are Bitcoin, altcoins, forks and stablecoins.
Altcoins
All cryptocurrencies except Bitcoin are considered.
Forks
— branches from the main Bitcoin blockchain.
Stablecoins
— digital variation of familiar currencies, such as the US dollar, euro, ruble, etc. Moreover, they are secured not by state assets, but by the assets of the companies that created them.
Stablecoins include USDT, USDC, USDS, TUSD, GUSD and PAX.
A cryptocurrency exchange is a platform created for trading and exchanging some digital currencies for others or for fiat money of countries.
There are the following types of exchanges:
- crypto coins can be exchanged for national currencies;
- Only bitcoins and altcoins are traded, during which one cryptocurrency is exchanged for another.
A new type of decentralized exchanges can be added to this list, which may become the next stage in the development of the cryptocurrency trading market.
Many Forex Brokers also provide the opportunity to trade cryptocurrency. It also has its advantages and disadvantages, which need to be examined in more detail.
A Brief Description of the Bitcoin Trading Process
Trading Bitcoins is buying coins at a low price and selling them at a higher price. Unlike investing, which involves holding coins for a long time, trading involves trying to predict price movements by studying the industry in general and price charts in particular.
There are two main methods of analyzing the price of Bitcoin - fundamental and technical analysis. Successful trading requires a lot of time, money and effort if you really want to succeed at it.
People who are thinking about how to properly trade on a cryptocurrency exchange will need to take the following steps
- Open an account on an exchange (for example, BINANCE or Bitmex).
- Confirm your identity.
- Deposit money into your account.
- Open the first position on the exchange (“long” or “short”).
In a nutshell, this is what Bitcoin trading is all about. If you want a more detailed explanation, read on.
My Worst Cryptocurrency Trades in Trading
Let's move on to the saddest part. Alts are performing poorly in 2022. Of course, we are talking specifically about the coins that I bought. Here's a clear example of how to more than halve your Bitcoin in a couple of months on the STRAT/BTC pair.
Source: Bittrex
Buy a coin at 0.0199 BTC and sell at 0.0085 - what could be better?
Well, according to tradition, a cryptocurrency chart.
Source: TradingView
Stop loss orders are executed here, that is, automatic liquidation of a position when a certain rate is reached. The losses are not that big when compared to the previous screen. These are trading pairs of altcoins FET and CELR with Tether.
Source: Bittrex
These days of waiting for the situation with the schedule to change (from December 8 to 9) were very painful.
Here's what it looks like with CELR.
Source: TradingView
And, accordingly, FET.
Source: TradingView
I would like to separately note the role of stop losses. Be sure to remember to place them, because with them you will at least lose significantly less than you can.
Comparison of Bitcoin trading with investing
Before diving into this topic, you need to understand what Bitcoin trading is and how it differs from investing.
Investing in Bitcoin usually involves buying coins for the long term. In other words, people believe that the price will eventually rise, regardless of the ups and downs that occur along the way. Typically, people invest in Bitcoin because they believe in the technology, belief system, or team behind the cryptocurrency.
Investors tend to hold crypto assets for long periods of time (a popular term in the Bitcoin community is HODL, which was actually born from a misspelling of the word “hold” in an old 2013 post on the BitcoinTalk forum).
Traders, on the other hand, buy Bitcoin for the short term and sell it when they are confident they can make a profit. Unlike investors, traders view Bitcoin as a tool for making profit. Sometimes they don't even bother to study the technology or belief system behind the product they are selling.
However, people can trade Bitcoin and are serious about it, and many invest and trade at the same time. As for the sudden rise in popularity of trading Bitcoin (or altcoins), there are several reasons for this.
Firstly, Bitcoin is very volatile. In other words, you can make good profits if you manage to predict market movements correctly. Secondly, unlike traditional markets, Bitcoin trading is available 24/7.
Most traditional markets, such as stocks and commodities, have opening and closing times. With Bitcoin, you can buy and sell whenever you please.
Finally, the relatively unregulated cryptocurrency space makes getting started trading Bitcoin relatively easy, as it does not require lengthy identity verification processes.
conclusions
Among the ways to make money on cryptocurrency trading available on the market, everyone can find a suitable option for themselves . Moreover, the more technicians a user knows, the more chances he has to earn a decent income.
Thus, the most effective way to make money from cryptocurrency trading is a combined one. It involves the simultaneous use of all available analysis and forecasting techniques, each of which can reveal in more detail the potential for further movement of the rate of a digital asset.
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Trading methods
Although all traders want the same thing, they practice different methods to achieve results. Let's look at several popular types of trading:
Day trading
This method involves taking multiple trades throughout the day and attempting to profit from short-term price movements. Day traders spend a lot of time staring at computer screens and typically close all of their trades by the end of each day.
Scalping
This strategy has become increasingly popular lately. When scalping, traders try to make significant profits from small price changes, i.e. They take risks for a penny profit.
A scalper focuses on extremely short-term trading, driven by the idea that making small profits greatly limits risks and creates advantages for traders. Scalpers can make dozens or even hundreds of trades in a single day.
Swing trading
Using this trading method, traders attempt to take advantage of the natural “fluctuations” of price cycles. Swing traders try to establish the beginning of a specific price movement and then enter a trade. They hold on until the movement dies down and take the profits.
Swing traders try to see the big picture without constantly watching their computer screen. For example, swing traders may open a trading position and hold it open for several weeks or even months until they achieve the desired result.
Types of orders on a cryptocurrency exchange
- A limit order is one of the basic categories. A Bitcoin trader sets the volume and price of coins purchased (or sold) and can safely leave the site. The order will be executed when a suitable counter offer appears. It is recommended to use a limit order if you are waiting for a sharp rise or decline in the rate of the cryptocurrency you are interested in.
- A market order is used if you need to purchase or sell an asset now. You indicate only the transaction amount, the exchange will do the rest.
- Stop-limit order - allows you to make money on intra-exchange manipulations. If the rate of a coin is artificially raised or lowered, it moves in a given direction very sharply. A stop limit allows you to buy before the price reaches the top point and have time to sell at a profit.
In addition to basic types, exchanges can work with special orders designed for professionals.
- Fill or Kill - an order is either executed at the price specified by the Bitcoin trader or closed.
- One Cancels Other (one cancels the other) - allows you to place two counter orders (buy if the rate is down, sell if it’s up).
- The hidden order is not added to the general register, which allows you to carry out a large transaction without causing panic on the exchange.
If you are trading at a limit, it is important to correctly calculate the depth of the swing. Or the order will not be executed and you will not earn anything.
Analysis methods: fundamental and technical
Is it possible to predict the price movement of Bitcoin?
The short answer is that no one can really predict what will happen to the price of Bitcoin. However, some traders have identified different patterns, methods and rules that allow them to make profits in the long term. Of course, trades are not always all-winners, but the idea is this: at the end of the day, you should have a positive balance, even if you suffered some losses in the process.
When analyzing the price of Bitcoin, people follow two main methodologies (in fact, this applies to any asset that can be traded) - fundamental analysis and technical analysis.
Fundamental Analysis
It involves trying to predict the price by looking at the big picture. In the case of Bitcoin, for example, fundamental analysis evaluates the industry, currency news, technical developments (such as the ightning network), laws around the world, and any other news or issues that may affect Bitcoin's success.
This methodology looks at the value of Bitcoin as a technology (regardless of the current price) and relevant external forces to determine what will happen to the price. For example, if China suddenly decides to ban Bitcoin, the analysis will predict a likely price drop.
Technical analysis
Deals with attempting to predict price by studying market statistics such as past price movements and trading volume. He tries to identify patterns and trends in price and, based on them, make a conclusion about what will happen to the price in the future.
The basic assumption behind technical analysis is this: no matter what is currently happening in the world, price movements speak for themselves and tell some kind of story that helps you predict what will happen next.
So, which methodology is better?
As discussed in the previous chapter, no one can accurately predict the future. From a fundamental point of view, a promising technological advance may fail, and from a technical point of view, the graph does not always behave as it did in the past.
The simple truth is that there are simply no guarantees for any type of trading. However, a healthy combination of both techniques is likely to produce the best results for people looking to start trading on a cryptocurrency exchange.
The secret of a successful trader
When starting to use margin trading, all traders go through several stages of development:
- You see how the charts go up and down, it seems that nothing is complicated, and you immediately start trading. The result is losses.
- Then you try to learn strategies and acquire some skills, but you jump from system to system in search of a nugget. The result is a drain.
- You understand that you can simply use levels for trading and manage risks correctly. Now you are already evaluating your results at intervals of weeks and months.
- You stop breaking your own rules and still enter the market only based on signals. You can’t really earn money, and you spin at 0, but no longer lose your deposit.
- Finally, trading is becoming something ordinary, like driving a car, a kind of autopilot turns on. You move away from small time frames towards daily, weekly and even monthly charts. Trading does not make you nervous because... you control risks and do not enter the market 50 times a day.
Unfortunately, only 3-5% of people reach level 5, and for them trading turns into a regular job. The advantage of this work is that you are always slowly scaling and increasing your profits day by day through capital growth. This is Zen. As in any other profession, it only comes with age, because you cannot become a surgeon in a couple of years.
Terms related to Bitcoin trading
Let's continue to understand the confusing terms and statistics that traders encounter on most cryptocurrency exchanges:
Trading platforms, brokers and markets
A cryptocurrency trading platform is an online site where buyers and sellers are automatically brought together. Please note that trading platforms are different from Bitcoin brokers such as Coinmama.
Unlike trading platforms, brokers sell you Bitcoin directly and usually at a higher price. Trading platforms are also different from marketplaces like LocalBitcoins, where buyers and sellers communicate directly with each other to complete a transaction.
Order book
A complete list of buy and sell orders is provided in the order book, which can be viewed on the trading platform. Buy orders are called bids because people offer the price at which they are willing to buy bitcoins. Sell orders are called requests because they indicate the price that sellers are asking for.
Bitcoin price
Whenever people talk about the “price” of Bitcoin, they are actually referring to the price of the last trade conducted on a particular trading platform. This note is important because, unlike US dollars, Bitcoin does not have a single global price that everyone follows.
For example, the price of Bitcoin in some countries may differ from the price in the United States, since the main exchanges in these countries operate on their own terms.
Note: Next to the price, you can sometimes also see the terms " high " and " low ". They represent the highest and lowest Bitcoin price levels over the past 24 hours.
Volume
Volume is the total number of Bitcoins that were traded over a specified period of time. Volume is used by traders to determine the significance of a trend; The most significant trends are usually accompanied by high trading volumes, while weak trends are accompanied by low volumes.
For example, a strong uptrend will be accompanied by high volumes when prices rise and low volumes when prices fall.
If you see a sudden change in price direction, experts recommend checking how significant the trading volume is to determine whether it is a minor correction or the start of a countertrend.
Market (or instant) order
This type of order is placed on the trading platform and is instantly executed at the best available price. You just set the amount of Bitcoin you want to buy or sell and order the exchange to execute the trade immediately. The trading platform then matches sellers or buyers to fill your order.
After placing an order, there is a high probability that not one buyer or seller will be selected for its execution, but several, and at different prices.
For example, let's say you place a market order to buy five Bitcoins. The trading platform now searches for the most affordable sellers with the lowest prices.
The transaction will be completed once the platform finds enough sellers to give you five Bitcoins. Depending on the availability of sellers, you may end up buying three bitcoins at one price and the other two at another.
In other words, in a market order, you do not stop buying or selling bitcoins until the requested amount is reached. With market orders, you may end up paying more or selling for less than you expect, so be careful.
Limit order
This order allows you to buy or sell bitcoins at a specific price that you set yourself. In other words, the order may not be fully filled because you do not find enough buyers or sellers to satisfy your demands.
Let's say you place a limit order to buy five Bitcoins at a price of $10,000 per coin. In this case, you might end up with only 4 bitcoins because there weren't enough sellers willing to sell you the last bitcoin for $10,000. The remaining 1 Bitcoin order will remain open until the price reaches $10,000 again, at which point it will be filled.
Stop loss order
Allows you to set a specific level for selling assets in the future if the price drops sharply. This type of orders is useful for minimizing losses.
Essentially, this is an order that tells the trading platform the following: if the market price falls by a certain percentage or to a certain point, I will sell my bitcoins in order to lose as little money as possible. A stop loss acts like a market order.
In other words, when the stop price is reached, the platform will start selling your coins until the order is filled.
Market maker and taker fees
Two other terms that people who want to learn how to trade cryptocurrency may come across are market maker fees and taker fees. This model seems quite confusing to us, but let’s try to understand it.
It is beneficial for exchanges to encourage people to trade. In other words, they want to “create a market.” Therefore, whenever you create a new order that cannot be immediately matched by any existing buyers or sellers, i.e. a limit order, you will be considered a “market maker” and you will be charged more low commissions.
Meanwhile, the market taker places orders that are executed instantly, i.e. market orders whose terms have already been proposed by the market makers. Takers reduce liquidity, so they typically pay higher fees than market makers who add new orders to the exchange's order book.
For example, you place a limit order to buy one Bitcoin at a price of $10,000 (maximum), but the seller with the lowest price is only willing to sell for $11,000. It turns out that you are creating a new market for sellers who want to sell for $10,000.
Thus, when you place a buy order below the market price or a sell order above the market price, you become a market maker.
Similarly, you could place a limit order to buy one bitcoin at $12,000, with the lowest seller willing to sell one bitcoin for $11,000. In this case, your order will be executed instantly. In this case, you take orders from the exchange, so you are considered a market taker.
My Best Cryptocurrency Trading Trades
I started trading altcoins back in 2022 on Bittrex. I got into the industry very successfully, because at that time many coins were fired very well. For example, NEO, which I traded paired with Bitcoin.
The screenshot below shows the dates of the operation, trading pair and type of operation (sale-purchase). To the right of the limit we see the coin rate in BTC and the transaction amount in BTC. Finally, the rightmost column shows the amount of trades.
Source: Bittrex
In this case, I made three purchases for 0.01, 0.01 and 0.0136 BTC (I did this gradually, taking into account the growth of the exchange rate), and then sold what I bought for 0.066 BTC. It was a good episode.
For clarity, orders are displayed on the chart. I indicated the purchase rate with a green dotted line (signature “Buy”), and the sale rate with a red dotted line (signature “Sell”). The other images show the same principle.
Source: TradingView
Another good example is buying and selling RLC in a Bitcoin trading pair. It was possible to sell the coin with at least a 50% profit. Although the first couple of operations (bottom) brought 74 percent growth. And this is just after a week of waiting.
Source: Bittrex
Same thing on the graph.
Source: TradingView
And this is what real success looks like - x2 on MATIC. Here approximately 120 BTC is converted into 240 BTC. We see the volume of coins on the right.
Source: Telegram
A photo of this operation was shared by an investor friend of mine, whom I helped with transactions.
Reading Price Charts
Now that you are familiar with the basic trading terms, let's begin learning how to read price charts.
Japanese candles
Japanese candlesticks are a very popular type of price chart based on an ancient Japanese method of technical analysis used in rice trading back in the 17th century.
Each “candlestick” shows the opening, low, high and closing prices for a certain period of time. Because of this, Japanese candlesticks are sometimes called OHLC (Open, High, Low, Close) charts.
Depending on the color of the candle, green or red, you can determine whether the closing price of the time frame was above or below the opening price.
If the candle is green, it means that the opening price was lower than the closing price, that is, the price as a whole was moving up during this time frame. On the other hand, if the candle is red, it means that the opening price was higher than the closing price, that is, it was moving down.
In the image above, the opening price of the green candle is the bottom of the wide part of the candle, the closing price is the top of the wide part of the candle, and the highest and lowest price points in that time frame at both ends of the candle's "wicks."
When we are in a bull market, most of the candles are usually green. If the market is bearish, most of the candles will be red.
Bull and bear markets
These terms are used to indicate the direction of the overall trend of the chart - whether it is going up or down. They are named after bulls and bears, with a nod to how these animals attack their opponents.
A bull strikes with its horns from bottom to top, and a bear strikes with its paw from top to bottom. Thus, these animals are metaphorical symbols of market movement: if the trend is up, the market is bullish. But if the trend is downward, then the market is bearish.
Resistance and support levels
Quite often, when looking at market charts such as OHCL, it may appear that the Bitcoin price is unable to break through certain highs or lows. For example, you might see the price of Bitcoin rise to $10,000 and then seem to hit a virtual ceiling and stay there for some time without breaking through.
In this scenario, $10,000 is the resistance level, the highest price point that Bitcoin is trying to break through. The resistance level is the result of a large number of sell orders being executed at this price point. That is why the price cannot break above this point.
Support levels are, in a sense, a mirror image of resistance levels. They look like a “floor” below which the price of Bitcoin does not fall when it falls. The support level is accompanied by a large number of buy orders placed at this price. High demand from buyers at the support level softens the downward trend.
Historically, the more often price fails to move beyond support or resistance levels, the stronger those levels become.
Interestingly, resistance and support levels are usually set near round numbers, such as 10,000, 15,000, etc. The reason is that many inexperienced traders tend to place buy or sell orders at round price points, which makes them strong price points barriers.
Psychology also makes a big contribution to the formation of support and resistance levels. For example, before 2022 it seemed expensive to pay $1000 for Bitcoin, so there was a strong resistance level at the $1000 point. After this level was broken, a new psychological resistance level emerged: $10,000.
Differences between crypto exchanges and stock and foreign exchange markets
Trading crypto coins differs from working in the foreign exchange and stock markets in the following ways:
- Availability. The Forex market is only available 5 days a week. In turn, the cryptocurrency market operates without interruption 7 days a week.
- Volatility. This term refers to the change in price over a certain period of time. The Forex market is quite stable in this regard, and many instruments exhibit calm trends that make it possible to limit risks and predict further movements. In the case of cryptocurrency, the price can rise by 5000% in weeks, which is unthinkable for other markets. At the same time, you need to understand that it can also fall quickly.
- Technical analysis. This analysis is based on forecasting possible options for price movements. To do this, you need to understand the principles of the market, what affects the price and how market participants can change it.
- In the early stages of the Forex market, large players could easily manipulate prices to their advantage. At the moment this is no longer possible, because it contains not billions, but trillions of dollars. However, we see this now in the cryptocurrency market. This is where such enormous volatility comes from + many inexperienced traders who are easily manipulated.
- Due to the fact that Bitcoin is still young, trading it is relatively simple and there are few fraudulent movements. Basic and simple things work great, because... the behavior of the crowd or large market players is historically unchanged, but more on that later.
- Trading instruments. If in other markets the number of trading instruments has the widest variety, then this is not the case in the cryptocurrency market. Yes, there are a huge number of coins, but essentially we are only dealing with Bitcoin, which has a dominance of 60% or more. This means that if Bitcoin falls, then all other altcoins and forks follow it. The only difference is the bull market. Altcoins generally grow at a slower rate, but some coins can grow even faster than Bitcoin during certain periods of time.
- Market regulation. You may remember that 10 years ago the Forex market was a scam (at least in Russia and the CIS). Dealership centers, or kitchens as they were also called, deceived people and stole money. Unfortunately, a number of companies still operate this way. However, in general, these days are over. There are many companies on the market that really do not work against the client; they have liquidity, a long history and regulation. In turn, cryptocurrency exchanges are just beginning to go down this path, which is why we see so many alleged hacker attacks that allow funds to be stolen with impunity.
- News. There is an economic calendar of the most important events in the Forex market, and we always know that strong movements occur when NonFarm Payrolls are released (changes in the situation on the US labor market). In the case of cryptocurrency, such tools do not exist, and different sources always differ in their readings and are late in publication. Thus, we may well conclude that news trading is unlikely to be possible. Therefore, the best solution is to simply follow the market.
Common trading mistakes
So, you've made it almost to the end and you should now have enough knowledge to go out and get some field experience. However, it is important to remember that trading is risky and that mistakes cost money.
Let's look at the most common mistakes people make when they start trading cryptocurrency. We hope this will help you avoid them.
Mistake #1 – Risking more than you can afford to lose
The biggest mistake you can make is risking more money than you can afford to lose. Calculate the amount you feel comfortable with. Worst case scenario: You end up losing everything. If you find yourself trading above an amount you are comfortable losing, stop. You are making a mistake.
Trading is a very risky business. If you invest more money than you are comfortable with, it will affect your trading and may cause you to make poor decisions.
Mistake #2 – Lack of a plan
Another mistake people make when starting to trade from scratch is not having a clear enough plan of action. In other words, they cannot say exactly why they are entering a trade and when they should exit the trade. Therefore, before starting trading, it is imperative to determine clear profit goals and the location of the stop loss.
Mistake #3 – you leave money on the exchange
This is the most basic rule for any crypto trader: never leave your money on an exchange if you are not currently trading. If your money is on an exchange, you have no control over it. If the exchange gets hacked, goes offline, or suddenly stops working, you could end up losing everything.
If you have money that you won't need for exchange trading in the short term, be sure to move it into your own Bitcoin wallet (Ledger or Trezor) or bank account for safekeeping.
Mistake #4 – acting under the influence of fear or greed
Very often, the actions of many traders are controlled by two main emotions: fear and greed. Fear can manifest itself as closing a trade prematurely after reading a disturbing news article, hearing a rumor from a friend, or being afraid of a sudden price drop (which may soon reverse).
The other main emotion, greed, is actually also based on fear: the fear of missing out on something. When you hear people telling you about the next great opportunity, or when market prices start to rise sharply, you are afraid that you will miss the opportunity. Because of this, you may enter a trade too early or fail to close a previously opened trade in time.
Don't forget that in most cases we are controlled by emotions. Therefore, never say: “this will not happen to me.” Be aware of your natural inclination towards fear and greed and be sure to stick to the plan you made before entering the trade.
Mistake #5 – You don’t learn from mistakes.
No matter how successful or unsuccessful your transaction is, there is always a lesson to be learned from it. No one manages to make only profitable trades, and no one achieves such a level of skill that he can make money without losing some money in the process.
What matters is not whether you made money or not. What's more important is whether you were able to gain new insight into how to trade better next time.
Cryptocurrency Arbitration
Arbitrage is the trading of cryptocurrency on different exchanges. Earnings in arbitrage are the difference in rates on different sites. The earning scheme is very simple: the user buys cryptocurrency at a low price on one exchange, and sells it on the exchange where the cost is currently high. And we repeat the process in a circle.
It's fast, you don't need any special knowledge, and the risks are minimal. There are no tricks or pitfalls here. Transactions are simple as hell. Moreover, the price range on different cryptocurrency platforms is quite strong. This is facilitated by the specifics of cryptocurrency: prices change so quickly that not all exchanges have time to track the current rate. In addition, the cryptocurrency market is decentralized and not controlled by anything. And transactions are slow. In general, the conditions for making money are ideal.
There are two types of arbitration:
- Classic or simple . Transactions are carried out with one financial instrument, but on different exchanges. The task is to buy cryptocurrency cheaper and sell it more expensive, finding auctions with the highest possible rates. The profit is stable, which is facilitated by an ineffective system. The risks of getting burned here are minimal.
. This type of arbitrage involves analyzing the current state of affairs in the crypto market. The trader’s task is to buy the most promising asset, the price of which will increase in the future. There are many risks here, since making a good choice is not easy, even if you have all the necessary knowledge. And if you choose incorrectly, there will be an inevitable financial loss. So this type of arbitrage differs little from classical market strategies, since you need to calculate the probability of profit. In this case, the trading participant must determine the patterns of price movement of different cryptocurrencies and apply this in his choice.
Static Arbitration
Today, any of these types of arbitrage can bring good profits. In established financial markets it is not so attractive, but in the unstable cryptocurrency market you can make good money on it with minimal risk.
FAQ
How to start trading cryptocurrency
In order to trade Bitcoins, you need to do the following
- Open an account on a cryptocurrency exchange (options are listed below).
- Go through the identity verification procedure.
- Deposit money into your account.
- Open the first position on the exchange (for example, buy or “short sale”).
Is day trading a good way to make money?
Day trading is just one of the many ways you can choose to trade. Other examples include swing trading or scalping.
Although many people will argue that day trading is a good way to make money, more than 90% of people give up on this strategy in the first 3 months.
Any type of trading strategy can work as long as you are consistent and willing to put in the time and effort to learn to be better than other traders.
Depth of Quotes
Bitcoin trading on the exchange is carried out through the quote book. Using the information recorded in it, the user can make an analysis and make the right decision on making transactions.
Let's learn how to read cryptocurrency exchange charts. This tool can be used for the following purposes:
To calculate the current spread. To do this, divide the first values from the list;- To predict the subsequent behavior of the value of a cryptocurrency. To do this, you need to monitor large buy orders. The appearance of such orders is almost guaranteed to mean that the price will rise;
- Only a short-term analysis will be relevant, because the list does not reflect all positions exhibited by participants. There you can see positions that are close to the current price at that moment. Finding out how the course will react after a certain period of time is very difficult.
In general, it is better to work with large requests. For example, you can choose the BTC/USD pair and figure out how to trade based on this data. Otherwise the analysis cannot be done. Although it is better to use additional information, and not just the information indicated in the order book. In particular, review news and monitor the general state of the market.
Commissions
When calculating the potential profit from trading on the stock exchange, keep in mind that a certain portion will be “eaten up” by commissions. All trading platforms charge a certain commission percentage for their services, and the lower it is, the more the trader earns .
As a rule, replenishing a deposit on exchanges occurs without commissions.
To encourage traders to trade more, exchanges do not set a constant commission, but make it dynamic: the size of the commission fee decreases as trading volume increases.
Therefore, the more a trader trades on the platform, the less money he gives to it in the form of commission fees.
There are several other ways to reduce trading fees. For example, pay with the platform’s internal currency: BNB on Binance, OKB on OKEx, etc.
Also, do not ignore bonus programs and cash draws, which also make trading on the stock exchange more profitable.
Thus, the Bybit exchange gives a permanent bonus of $5 for new users (for subscribing to social networks, using stop loss, etc.) and regularly holds temporary promotions ($5 for completing a survey, $20 for a deposit of more than 1 BTC, etc.).
Bitcoin Timeline
- November 2012: WordPress starts accepting payments in Bitcoin
- July 2013: A joint Bitcoin project with M-Pesa, a popular East African mobile phone payment system, launches in Kenya.
- September 2014: TeraExchange LLC receives approval from the US Commodity Futures Trading Commission (CFTC) to list a Bitcoin-based derivative
- March 2016: The Japanese government recognizes Bitcoin and other cryptocurrencies as legal means of payment and equates them to real money.
- 08/1/2017: the first Bitcoin fork, Bitcoin Cash, appears
- 10/2/2017: the second Bitcoin fork, Bitcoin Gold, occurs
- 12/10/2017: The CBOE exchange begins issuing Bitcoin futures.
- 12/28/2017: The third Bitcoin fork, B2X, appears, based on SegWit2x technology.
