The Commodity market trade dates back to the late 4500BC using clan tokens and common spices. The future of commodity trading in today’s modern cyber era is and will be the cryptocurrency. The words Bitcoin, Ethereum, or Ripple are something that is heard every day, either on the news or social media. How do we trade this commodity of the future, how to play it safe and how to ensure we get the best scores is the important question? The advantage here is that this market being online, never sleeps. Here are some of the few Online Trading Tips.
Tip 1: Know the commodity (Cryptocurrencies)
There are more than 2000 cryptocurrencies in existence. The largest and top 10 are Bitcoin (BTC), Ethereum (ET), Ripple XRP (XRP), Tether (USDT), Bitcoin Cash (BCH) and Litecoin (LTC) etc. It is advisable to study each of the top cryptos and keep track of the trading charts for each crypto currency and study the concept of blockchain.
Multiple reviews are available for each of the make sure you read reviews/blogs for the currencies you desire to trade.
Cryptocurrency trading is an ever-changing, ceaseless process, highly volatile, and has boomed in the recent months. At the very beginning of 2021, Bitcoin dived as much 21% over Sunday and Monday (10th Jan -11th Jan). Ethereum fell 12% while XRP and Liteecoin fell around 18% each. This was soon after when Bitcoin hit the all-time high of $41,000 – a rise of nearly 300% in the past 12 months.
After knowing the company and basic dynamics of cryptocurrencies a person would require an exchange to purchase digital assets.
Tip 2 type of trader
Identify the purpose of the trade. Whether you want to be a day trader or scalper.
You need to set plans and understand that just like forex or commodity trading there will be chances of loss also and that profit in every trade is not a given. Nevertheless, it is preeminent to invest in different coins to prevent high risks.
Tip 3 Trade Sentiments
Put all emotional factors such as panic and greed to bed. The roots of an unscrupulous trade is said to be emotional interference, to mitigate the risk it is advisable to set out a plan by setting limits.
A most common practice is to set out a parameter with a minimum limit and lower limit for each currency trade. To practice, you can use Trading Robots with demos or simulations. Gathering small and sure profit from regularly trading is the key to the slow and steady will surely win this race.
Tip 4 LAws and Rules
The digital/cyber market is relatively fresh and many countries and government are now considering to bring the crypto currencies in for taxes and introducing rules to regulate this cyber world commodity.
Study the latest rules in your country before starting trading. In the United States in 2014 first circulated the cryptocurrency trading rules to fall under the category of property. This will allow the authorities to mark the traders as investors that will be required to comply with complex reporting requirements. Details are provided by IRS notice 2014-21. The definition of ‘Property’ in this context means that the earnings will now be subject to capital gain tax, instead of the normal income tax.
However each country has different requirements and many will adapt to this market. It is better to check the depth of the water before diving in the river.
Tip 5 Trading Bots
The traders after forming the strategy can program the bot according to its needs. The crypto-currency market having a digital platform has the advantage of being live and Trading Robots will help in executing the anticipated trades.
It saves your valuable time and you wouldn’t be looking at the charts all day. The limits set when achieved would automatically trade rather than manual input. The latest software permits you to trade across multiple currencies at a given time whereby broadening the playground.
Conclusion
A good trader learns from his mistakes and analyses then to improve his trading skills.