To successfully coin trading, you must first master the basic knowledge. In the vast world of crypto trading, there are many dangerous scams. Good knowledge will both help you avoid risks and increase your chances of success in crypto trading. Let’s explore the basic knowledge with Learn Crypto Trading in the following article.

Basic knowledge of coin trading

Basic knowledge of coin trading including important terms and trading formats.

Basic terms in coin trading

• Altcoin: refers to cryptocurrencies other than Bitcoin.
• All-Time High (ATH) / All-Time Low (ATL): the highest or lowest price a cryptocurrency has ever reached.
• Bull market: The market price in general tends to increase. Public perception is positive.
• Bear market: Negative outlook because the market price tends to decrease.
• Blockchain: This is a method of storing data in a decentralized way. Data can be copied and distributed across a network of computer systems on that blockchain.
• Consensus: This is the method by which members of the blockchain agree on what should be included in the blockchain.
• Crypto: This type of asset exists in digital form. Crypto is decentralized. Crypto can be used for buying, selling, or exchanging.
• Stablecoin: A cryptocurrency whose value is tied to a stable asset such as fiat currency or gold, helping to minimize price fluctuations.

Advanced terms in coin trading

• DAO (Decentralized Autonomous Organization): Is a decentralized autonomous organization. DAO empowers the community to manage its future and products.
• DApps (Decentralized Applications): These are programs that run on the blockchain network. DApps use smart contracts to provide tools and services without the need for intermediaries.
• DeFi (Decentralized Finance): Refers to the use of coins to provide financial services without going through Banks or the Government.
• DEX (Decentralized Exchange):  Where buyers and sellers trade directly without intermediaries, helping users control their private keys.
• ERC-20: Unified technical criteria for token operations and interactions on the Ethereum blockchain.
• Fiat: Refers to currencies in the traditional financial system (e.g. US dollar and euro).
• Halving: Refers to reducing the block reward for Bitcoin mining by 50%. The purpose is to keep the amount of money issued within the control zone.
• Hashrate: A unit of measurement for processing power in crypto mining.
• NFT: This is a non-fungible token. This means tokens cannot be copied or divided and each unit is unique.
• Wallet: A tool used by traders to control private keys. The wallet has 2 versions: software and hardware. The difference is whether the user has full control over his private key or not.

Forms of coin trading

• Stake to Earn: Hold coins/tokens for a long time to receive interest.
• Trading to Earn: Take advantage of price differences to trade cryptocurrencies/tokens on exchanges and make profits.
• Play to Earn: Earn money by playing blockchain games.
• Free to Earn: Join to receive free coin/token rewards with tasks like airdrops, surveys, etc.
• Move to Earn: Do physical activities like jogging to earn money.
• Learn to Earn: Take a course about blockchain and coin trading to earn money.
• Mining to Earn: Mining coins/tokens by decoding difficult algorithms.
• Farming to Earn: Contribute liquidity to trading pairs on DeFi platforms and enjoy profits.
• Create to Earn: Develop projects about blockchain, NFTs, or related services and products that trade cryptocurrencies for profit.

See more: Trade coins: Getting started guide and strategy

How are fundamental analysis and technical analysis of trading coins different?

To conduct successful trading, traders cannot ignore two important techniques: fundamental analysis and  technical analysis crypto.

Basic analysis in coin trading

Fundamental analysis in coin trading is to assess how big a project’s growth potential is. We will analyze factors including the project’s team and development roadmap, underlying technology, user community, and token. Through fundamental analysis, traders will better understand the intrinsic value of the coin or project they are interested in.

Technical analysis of trading coins

Technical analysis in coin trading can be more complicated than fundamental analysis. Traders will need tools such as trend lines, RSI, MACD, etc. These tools help you predict price trends and find appropriate buy/sell points. Historical data and market trends will help make these tools more meaningful.

Learn about methods and schools of coin trading

Last but not least, it is important to understand the 4 main methods and the 7 most classic schools of trade coin.

Summary of 4 main crypto trading methods

1. Spot Trading: Coins/tokens will be bought and sold directly on exchanges. Assets and payments are transferred immediately or shortly after the transaction is completed. Spot trading is often favored by those who want to directly own the crypto they have purchased. Spot Trading is considered the most basic trading method in the coin trading market.
2. Margin Trading: Traders will use financial leverage to open positions larger than the amount of money they currently have. By borrowing money from the exchange, traders can take advantage of small price fluctuations to increase their chances of profit. However, this method carries very high risks. Traders can lose money that exceeds the initial capital they invested.
3. Future Trading: Involves buying and selling contracts with a commitment to buy/sell an amount of cryptocurrency at a time at a set price in the future. This method manages risk better and also allows speculation in the coin trading market. Traders will decide actions based on forecasts of future price movements of the asset.
4. Options Trading: Involves buying/selling the right to buy or sell an amount of cryptocurrency at a set price in the future. Traders are more flexible in risk management. They will profit by taking advantage of price fluctuations and the initial fee (premium) paid to buy the rights.

There are also other methods such as Short Margin, Derivatives, Wyckoff Trading, Scalping, Range Trading, etc.

See more: OKX – Open an OKX exchange account on computer

Summary of 7 Classic Crypto Trading Schools

1. Value Investing: Investors will choose to trade crypto that is undervalued compared to its real value.
2. Day Trading: Crypto traders take advantage of short-term price fluctuations and decide to open/close positions within the same day. This school requires good knowledge of technical analysis and the ability to make quick decisions.
3. Trend Trading: Coin trading with a trend investing style will buy and sell based on the current price trend.
4. Swing Trading: Traders take advantage of price fluctuations over a few days to a few weeks to trade. Good technical analysis ability is required to effectively implement this style.
5. Signal Trading: Analysts or signal services will provide information about buying/selling opportunities. Crypto traders will receive the notification and start executing orders. It is necessary to check the accuracy and success of analysts before placing orders.
6. Long-term Trading: Traders will keep the coin because they believe in its ability to develop sustainably and long-term.
7. Arbitrage: The price of crypto on exchanges often has a slight difference. Traders will trade crypto, buying from low prices and reselling at high prices to earn a profit.

summary

To coin trading successful, you cannot ignore the basic knowledge. Let’s start with important terms and technical analysis. After understanding the market, you will probably know which coin trading style is suitable for you. Please follow Learn Crypto Trading‘s blog to update information about this volatile market.

FAQs

Should I invest or coin trading be short-term or long-term?

Depending on your personal style, you decide to invest in coins for the short or long term. Short-term investment will be suitable for people who want to make quick profits and like high risks. Long-term investment will be suitable for people who believe in the development potential of that coin.

Which exchanges should I coin trade on?

You should coin trading at large and reputable exchanges. Some prominent names include OKX, Bybit, Binance, MEXC, HTX, Kraken, etc.

Which coin trading method is the most profitable?

Profitability in trading depends on many factors. Consider market trends and your own resources. Also, do not ignore technical analysis. After performing the basic steps, choose the appropriate trading method.