Crypto Trading Basics: A Beginner's Guide to Currency Trading Types
Cryptocurrency or crypto trading is the act of speculating on the price fluctuations of cryptocurrencies using a contract for difference (CFD) trading account, or the process of purchasing and reselling the underlying coins via an exchange. The derivative known as CFD trading enables you to wager on changes in the price of Bitcoin (BTC) without owning the underlying assets.
One of the most successful financial technology endeavors nowadays is trading cryptocurrency. It may be very speculative, therefore understanding the trading instruments at their disposal may aid investors in making wiser and less dangerous choices.
In this editorial article, we will go deeper into cryptocurrency trading. I will feature KuCoin, the top cryptocurrency exchange, and its many cryptocurrency trading options to help you better understand how cryptocurrency trading works.
The People’s Exchange currently offers 4 types of crypto trading
In general, cryptocurrency spot trading is the act of purchasing and selling tokens and coins at the current market rate (often known as the "spot price") with the goal of quickly acquiring possession of the underlying asset.
Spot trading is a popular investment method in KuCoin as it gives traders a simple way to invest in and trade in financial assets. A spot transaction is frequently a trader's first experience with cryptocurrencies. Where they will engage in a spot transaction on the spot market, such as buying Bitcoin at the going rate and hoarding the currency until its value increases.
KuCoin Margin trading is a type of investment where a small sum of money can be spent on assets worth many times what it cost initially. To maximize the use of their cash, users leverage a little quantity of cryptocurrency, borrow a particular amount of cryptocurrency, and then go long (buy) or short (sell).
If your margin account, for instance, has 100 USDT in it as collateral, you may, by paying a set interest rate, borrow 200 USDT in the margin market. As a result, you have 300 USDT accessible for trading and investing to increase your profit.
It simply means that users can borrow more funds for trading based on holding the collateral to grow the profit.
It is worth mentioning that KuCoin's cross margin only supports the repayment of the borrowed currency. You cannot use any other currency to pay back any USDT that you borrowed. As a result, if your margin account is insufficient to cover the repayment, you must transfer USDT from other accounts to the margin account or sell other coins to buy USDT, after which you must click the reimburse button.
Therefore, if you are a novice user of margin, it is recommended that you set your debt ratio within a reasonable range to reduce your trading risk
The People's Exchange claims that its trading bot is made to even the playing field for experienced traders and novices alike on the exchange. Statistics have supported the efficiency of this unique crypto trading robot.
Although a crypto trading bot consistently beats a human trader, it still has to be "set up" by a human and inherit its trading logic from professionals who are skilled in both coding and crypto trading.
But what's great about the KuCoin bot is its ability to identify the current phase of the market. Also, experienced traders know that the market consolidates sideways up to 80% of the time, thus it's fantastic that the KuCoin bot can precisely determine a stable trading range.
One feature that people would love the most about the KuCoin bot is that it can also handle risk management. This trading algorithm has the capacity to manage risks and make trading choices on its own in a variety of market environments.
Unlike Spot trading, KuCoin convert is a simple and clean interface that provides instant crypto conversions. Why bother using complicated tools when you can get your preferred cryptocurrency fee-free and in the right quantity, regardless of whether you're a regular retail customer or an experienced crypto trader?
The best part about this feature, in my opinion, is that it doesn't impose any trading fees on any transactions you make using KuCoin Due to market volatility, KuCoin is able to temporarily lock in your pricing thanks to the conversion spread contained in the conversion price. As a result, the quantity of cryptocurrency shown for conversion will be the minimum amount you will receive when the conversion is finished.
Closing Thoughts
Thanks to the volatility of the crypto markets, clever traders take pleasure in betting on their price movements in hopes of discovering profitable trading chances.
So If you are still a novice in crypto trading, I hope that this editorial article may in some way help you in conducting your DYOR.
If you haven't got KuCoin yet, the referral link is here for you to go and sign up, and to get you 20% off the trading fees as well. You only need an email account, for now, don't need any KYC information for the time being.
Thank you for reading and I appreciate your thoughtful responses! As always, keep it classy and civilized, please!