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The Market that Never Sleeps; Cryptocurrencies

The market that Never Sleeps

September 23, 2020 | 

JOHN K MWANIKI |  0 Comments| 

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Get Into Cryptocurrency Trading Today

The crypto market has grown to be one of the most active. It never shuts, sleeps, or goes for a time out. It instead runs full time with traders looking to venture at all times.

The market, not sleeping, allows traders to have varying trading patterns. Most are accustomed to the shifts in the asset values at any time. The cryptos are quite volatile. The trader is free to use the 24-hours price differentials on the market. 

The other reason for the market not to sleep is that it lacks a central control authority. The traditional stocks and assets tend to rely on regulated exchanges. There is no access to the commodities and stocks outside the exchanges. 

The crypto market is an open space for any trader of whatever size. One can trade even without the major crypto exchanges. Here is all you need to know about the happenings in crypto trading.

Advantages of Trading Crypto 

Having established itself, crypto trading is becoming more integral. It keeps attracting traders looking for alternative assets. It also offers more than just unlimited trading hours. 

One of the reasons for attracting new users is the ease of transactions. Fiat currencies transactions come with several agents, brokers, and even legal representation. The higher the amount involved, the more parties included. That is different from crypto that only requires the sender and the receiver. The peer-to-peer transaction model also has enough audit trail for accountability.

The other concern with fiat currency transactions is on the fees. Whether transferring cash, writing checks, or making payments, all come with high transaction fees. These amounts can become too much for those who transact regularly. Cryptos, however, don't attract much transaction fees. The Bitcoin miners get rewarded through tokens hence no need for transaction fees.

Crypto is also revolutionary when it comes to international transfer. The different countries operate with other currencies. Sending money internationally involves costly foreign exchange rates. That is different from cryptos that are standard worldwide. A sender can reach a receiver anywhere in the world as long as both parties have an internet connection.

Importantly, crypto allows individual ownership. In the fiat economy, you are more like a conduit. The government and the banks have all the power. The banks can even go down at any time without you reclaiming your assets. For crypto, however, you are the sole owner and controller.

Risks of Trading Crypto

Trading crypto comes with its fair share of risks. Understanding the risks helps you keep safe when joining the venture. Here are the top crypto trading risks to note;

  • Different exchange rates – Several exchanges provide for Bitcoin trading, and they all provide for different rates. It takes time to establish the best rates to ensure maximum returns. The difference in the rates has also created a type of crypto trading. 

  • Volatility remains a concern in crypto trading. Bitcoin values keep changing, and the changes can be as fast as even within seconds. The changes in the value mean one is never sure of the cost of their assets. Volatility also allows unregulated brokers to take advantage of traders. A difference in the value also indicates the trader might end up with less Bitcoin when exchanging back to crypto from fiat.

  • Security risks – Bitcoin is a digital currency that is prone to hacking. Several wallets and exchanges have been hacked before. Understand the security protocols of the crypto platform before investing your assets. 

  • Asset Class Mixing – forex and stock exchanges have been running for a long time. They have established standard trading procedures. The introduction of crypto is a new item they have to accommodate. It can come with other unknown risks before settling. 

Rules to Observe when Trading Crypto 

Understanding that the cryptocurrency market doesn't sleep is the beginning of the trade. With the advantages and risk, you are good to start trading. Here are some of the golden rules to observe when trading crypto;

  • Avoid weekend trading – even though the crypto market is open at all times, it doesn't mean trading is profitable all the time. Bitcoin has a seasonal price effect that means trading at some time is better than others. The season effects are monthly, weekly, and daily. Of the weekly analysis, weekends are the worst for trading. The coins tend to undergo significant volatility over the weekends. It also comes with lower market volumes with fewer traders.

  • Have the right mindset when trading – crypto trading is similar to investing in any other asset. It requires you to analyze returns and risks. Most crypto traders, however, tend to invest emotionally. They are all about short term gains. These come with unprecedented losses. Take time to observe the market trend. Use technical analysis and other factors to make informed decisions. Do not trade when tired or not on a clear mind. Be more logical than emotional when trading crypto.

  • Stay pragmatic when trading crypto – while crypto has been successful, it comes with high risks of scam. Whether it is the exchanges, wallets, or tokens, anything is exposed to scams. Take time to understand the coin before investing. Look into its whitepaper, management, and possible growth patterns. Only invest when sure of security. 

  • Develop a Trading Strategy – one of the mistakes as a trader is to trade blindly. Most traders only believe in buying low and selling high. They don't have specific amounts they are looking to achieve. Have your figures right always. 

Bottom Line 

Cryptocurrency has revolutionized asset trading. Unlike the traditional stocks with control figures, crypto is a peer-to-peer trading platform active all the time. You can trade even at night and during weekends. 

The full-time trading, however, still calls for precautions. It still comes with considerable risk. Take time to understand the assets and develop a trading strategy. 

Buy & Sell Cryptocurrency Instantly

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