Digital Currencies Trading

Digital currencies are now a famous market, which is becoming more and more popular day by day. Two best players, Bitcoin and Ethereum have entered the mainstream. Digital currencies are created based on Blockchain technology. They are different on the core from the traditional money system, because they are mined from an algorithm and they are not controlled by a central authority.

Digital currencies are not accepted as an official form of money, since governments are not able to control its supply. Anyhow, their potential to change the financial landscape is powerful. They are not influenced by the same factors as other assets are impacted.

Updated table of Digital Currencies Prices

Digital currencies have potential moves towards factors like: news and stories of countries and central banks which potentially ban digital currencies, attacks on cryptocurrency exchanges which bring in light security issues and disagreement inside the digital money community.

The biggest players in digital currency world are:

Bitcoin – the first and still the most valuable coin.

Bitcoin Cash – the first Bitcoin ‘hard fork’, and now it is a standalone digital currency.

Ethereum – an ambition project which aims to change how the internet works.

Litecoin – supports cross-border currencies with the fastest time for transaction. Ripple – addresses issues like speed of international payment methods.

Online Trading Keywords

Leverage

Leverage is the core of trading, you are borrowing extra power to trade. You place a small percentage of the total amount and the leverage will multiply it. Leverage depends on the type of instruments you are trading.

Margin

Margin is known as the amount of investment needed to fund your account, so it is eligible to open any position you wish. If you want to buy 0.1 lots of EUR/USD at 1.13410, with 1:30 leverage. Margins = (1.13410*10,000)/30=$378.3.

Slippage

There are two excellent risk management tools, stop loss and take profits. Combine it with correct position sizing, account sizing and market volatility. If the market should be trading at a different level from the stop-loss level at that precise moment of execution then the stop may be filled at a better or worse price. This is known as slippage.

Spread

Spread is the cost of trading, and it is calculated as a difference between the bid and ask price. Risk management and correct positions are considered core components of any trading experience, the primary goal is to grow capital by buying low and selling high.

Pip

Pip measures the price change that will decide profits and loss. On a 5 decimal place currency pair a pip is 0.00010; on a 3 decimal place currency pair a pip is 0.010; on a 2 decimal place currency pair a pip is 0.10.

Swap

The first cost of a trade is the spread. The second one is the swap. The swap is the interest adjustment calculated over the account each day at 00:00, server time.

Long & Short

To go long is to buy, or to believe that the price will be appreciated in the future, so you buy now, at a lower price. To go short is to sell, or to believe that the price will be depreciated, so you sell the asset to cut the losses.

Technical and fundamental

Technical analysis involves the use of charts to better understand market behaviour and ascertain probability as well as the risk-to-reward trade-off. Fundamental analysis involves the interpretation of news flow and how new information can affect the pricing of markets.