Intro
Crypto trading has made millionaires over the last few years and continues to do so. This has increased the number of entrants but also the number of scams, losses and even suicide in extreme cases, all of which may be attributed to skipping fundamentals and jumping right into "getting rich quick".
This article is here to provide some clarity to those who are new to crypto on how you can better navigate the space. (Please note that this article is strictly for educational purposes only. This is in no capacity, financial or investment advice just the research, opinions and experience of a crypto enthusiast)
The first thing one will need to know before even thinking of turning a profit is understanding what crypto is and how it works. The best place to start with this is Bitcoin itself, it's the mother of all crypto and understanding the fundamentals will help you grasp how other cryptocurrenies differ from it and how they may perform on the market (more on this later). Understanding $BTC is fundamental for traders especially given that the crypto market usually (not always) follows $BTC price action.
Analysis
The second thing is Analysis.Fundamental and Technical analysis. Unlike the stock market, crypto is extremely volatile and can experience rapid changes in price in a relatively short space. A typical example of this is the historical price action of 2021 when Elon Musk announced that Tesla would be taking payments in Bitcoin (and they did). The price of $BTC rose from 40K to around 69K within a short period of time (stay with me). Later on Tesla dropped BTC as a mode of payment on the grounds that BTC mining is unsustainable as it requires lots of energy to be mined. BTC dropped to 39K shortly after
(feel free to back date this chart for reference)
This is due to decentralized nature and so market moves happen at almost anytime and can be influenced by sentiments.
Fundamental Analysis involves researching about news, the microenvironment, projects, and other factors that affect the crypto you're looking to trade. For example news about Black Rock launching a BTC ETF and Pro Crypto Campaign by Trump signals an upward movement in price, esp given that this would mean more money was going into BTC from Black rocds ETF and the pro Crypto Campaign meant that BTC would probably be more "accepted" as an asset, giving opportunity to more inflows. Such information can help a trader anticipate how the market will move.
Technically analysis involves the actual price of the assets rather than the factors that may affect that asset. This is where the charts, and nerdy terms such as indicators, resistance, trends, and so on come in. It involves tracking price over a period of time and using real time data to anticipate future movements. This helps a trader to know what is going on in the market in real time helping them make more informed decisions
Of course there's more to it than this but this will help frame your mind into how you should approach trading as a beginner. Remember that things take time to master and might lose a couple' times before you make your Millions. Happy trading, share your thoughts on this.
That's a lot of typing I'll pick this up later 🤣🔥. Until next time