Understanding trading in the long term: a beginner’s guide on cryptocurrency
In recent years, the world of finance has increased in the interest of investors looking for alternative assets and new forms of negotiation. Among the many options available, cryptocurrencies have drawn significant attention due to their high and decentralized potential for decentralized. However, although cryptocurrencies offer many advantages, they also include unique risks and complexities that beginners should be aware with regard to long-term trading.
What are the merchants in the long term?
Term traders buy and sell contracts on assets on a specific date in the future, generally days or weeks before the end of the period. In the context of the trading of cryptocurrencies, the term markets allow investors to speculate on the value of cryptocurrencies like Bitcoin, Ethereum and others at a fixed price for a specific time.
Understand the cryptocurrency
Before diving into long-term trading, it is essential to understand what cryptocurrencies are. Cryptocurrencies are digital or virtual currencies that use cryptography for secure financial transactions and decentralized control. Examples of popular cryptocurrencies include:
- Bitcoin (BTC)
- Ethereum (ETH)
- Ripple (XRP)
Cryptocurrencies operate on a network of computers resolving complex mathematical problems, securing the network via algorithms for evidence of work or proof of implementation and validating transactions.
Key characteristics of cryptocurrency
- Decentralized
: The cryptocurrencies are decentralized, which means that they are not controlled by any government or institution.
- Limited food : Most cryptocurrencies have a limited range of parts, which helps prevent inflation.
- High Security : Blockchain transactions are secure and transparent, thanks to cryptography and peer communication.
Types of long -term trading
There are several types of trading on the cryptocurrency market:
- Futures in cash : These contracts can be settled immediately after expiration with cash payment equivalent to the value of the asset underlying the price of the regulation.
- TERMS CONTRACTS : These contracts have an expiration date and can be paid in cash or by exchanging them for a different asset on a future date.
- Forwards : These are pre-establishment options that allow traders to lock a specific price for a cryptocurrency before its real value is determined.
Key concepts
- Trading on Marge : Traders use money borrowed to amplify gains and potential losses.
- Risk-reversal ratio : The report of the potential reward to the deposit or the required risk.
- LEVER : Use of funds borrowed to increase potential yields, but also increase potential losses.
- Orders stop-loss : Automatic orders that sell an asset at a specific price to limit potential losses.
costs and commissions
In the long term, the costs and commissions vary depending on the scholarship or the broker:
- Exchange costs : These may include a shift, transaction costs and other costs.
- Broker commission : Some brokers charge higher costs for term transactions than others.
- Financing costs : Investors may need to pay for financing costs when borrowing money from a brokerage company.
popular cryptocurrency exchanges
Some popular cryptocurrency exchanges for long-term trading include:
- Bitmex
- Huobi
- Pro cocasus
- Binance Futures
Conclusion
The term trading in the cryptocurrency market offers many advantages, including high potential yields and diversification opportunities. However, it is essential to understand the risks involved and to manage your position accordingly.
Before diving into long-term trading with cryptocurrencies, make sure you:
- Research : Educate cryptocurrencies, term markets and trading strategies.
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