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Understand The Basics Of Trading “Buy Low & Sell High”

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Avatar for Eybyoung
Written by   977
3 weeks ago

If you aspire to be a trader, you should understand the basic of trading. The basic is too simple “buy low, and sell high” but as a newbie how do you really understand that statement?

Image Source: facebook.com

When I was newbie exploring trading, I don't even understand the basic even that buy low and sell high thing because when you are on the trading platform live, you'll get confused with the moving graphs, candlestick and the green color of buy and red color of sell.

Understand the basic of trading “Buy Low & Sell High”

Do you even understand that buy low and sell high? Why the color of BUY button is GREEN while the color of the button SELL is RED? You know when I was newbie, I don't understand it. I was even confused that the buy button has higher price than the sell button.

From that I asked myself “How it is called buy low and sell higher, when those buttons contradicts with that statement?”

From the photo above, it's BCH/USDT pair price. You'll see that the BUY button has $638.71 price while the SELL button is $636.87, see? How come it's like that?

Btw I used Stormgain chart for this and it is a margin trading platform and not on spot.

Why buy button is green?

Green represent a positive outlooks of the price, and buyers represent a green candlestick.

When there are more buyers coming in the market than sellers, the candlestick shown will all be in green. This also means that the trend is upward 📈 and it is called bullish.

Why sell button is red?

Red represent the negative outlooks of the price, and sellers represent a red candlestick.

When there are more sellers in the market than buyers all candlestick will be red colors. This means that the trend is downward 📉 and refers to us as bearish.

Why buy button price is higher than the sell button?

In trading there are buyers and sellers, buyers will buy the prices given by the sellers that is why the prices that will reflect on buy button is higher than the sell button.

Just look at the order book above sellers prices on the left side color red, starting from $638.68 to $639.92 the price that will reflect on buy button are the price that was asked first, when that price filled already it will move on to the next ask price until it goes higher and higher because lower prices has been bought already.

If you noticed the more people buy the more prices goes up because of the demand and supply low. Inorder to cater all demands the price will be adjusted higher because the supply is decreasing.

Why sell button price is lower than the buy button?

The price that will reflect on sell button are the prices that the bidders placed on market price, usually buyers wanted a lower price entry that is why the prices are lower compared to sellers price.

Just like the buy button the sell price button price will also flactuates once the first price bid was filled.

Why is called Bid and Ask in order book?

Bid and ask are the quotation price that buyers are willing to pay for the trade and sellers willing to take as payments of the trade.

The Ask is the sellers price quotation that will reflect on the buy button.

The Bid is the buyers quotation price that will reflect on the sell button.

What is the basis of current price that will reflect on the coin?

The current price that will reflect on the coin will be based on the volume of the trade if there is more volume of sellers than buyers then expect that the price of the coin will drop, while if the volume of buyers is higher than the sellers this will bring price increase of the coin.

The price that will reflect on the coin is based on who are the dominant, the buyers (bulls) or the sellers (bears). It's like the one who dominates will win the bid and that will be the one to reflect on the price.

If you noticed above the coin price is changing color as well meaning if more sellers then it's red and if more buyers then it's green.

How to buy low and sell high then?

To buy low just tap the BUY button, DO NOT CLICK CONFIRM. Instead click the LIMIT/SELL then input your price limit, but if you want to enter trade right away chose the bid prices above the. Click confirm. You can put the TP (take profit) amount and SL (stop loss) on your trade if you are in leverage. But if on spot you can just simply set sell limit at your own price preference.

If you are in leverage buy means BUY LONG.

In SELL this is only applicable in margin trading if your prediction of the coin price will drop, this is called shorting the coin or SHORT SELL. DO NOT CLICK CONFIRM, instead click the LIMIT/STOP then input your price target for shorting then confirm.

If the price drops then you'll gain from that, it's like you are betting that the coin will drop and if your bet is correct you'll get profit from that.

Closing Thoughts

Those are the things that confuses me before, ending I buy high and sell lower instead. Sometimes I even picked prices on the Ask instead on bid if I bought coins ending right after entry price my PNL is already negative lol.

If you want to learn about trading then understanding the basics is a must.

Note: Original Content unless revamp. This is also based on my understanding, if I mentioned some info incorrectly feel free to do correction, it would be highly appreciated.

P.S this has been on my drafts for a long time , so I'll publish it 😂🤦

Date Published: September 18, 2021

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Avatar for Eybyoung
Written by   977
3 weeks ago
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Comments

Buyers are bulls and sellers are bears, two more basic terms that I learnt today, waiting for more informative articles by you 👀

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2 weeks ago

Hayy nako, ang dami palang dapat isaisip pag nag trade sis, Sana ay maintindihan ko lahat ito 😊

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3 weeks ago

Oo sis basic pa lang yan wla pa yung mas komplikado haha

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3 weeks ago

I can remember when I started trading, I usually buy and sell at the same time so that the strongest one wins. As expected it didn't work out as planned and I lost a lot. Thank God it was a demo account lol

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3 weeks ago

Haha I lose a lot as well in live and demo, learning trading is a pain on the a$$

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3 weeks ago

Haha eto na naman tayo. Buy low, sell high. Me? Buy pag tumaas sell kapag kinabahan na kahit loss. 🤣 Pero nagimprove na ako bhe huh. Hold hold na lang kaya ayun lagas bhe. 😂

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3 weeks ago

Hahaha wag kasi tingnan wallet bhe pag madugo ang market para di ka ma tempt mag sell.

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3 weeks ago

In fact, crypto trading and business in normal life are similar to each other. A merchant in my normal job. Both require research and attention. In both, the main goal is to buy low and sell high. In order to buy at a low price, you take a position and wait, you research. It is the same in real life trade. In order to buy a product low, if necessary, I may have to go to the place where it grows. Both involve some caution and some luck. I hope we come across lucrative offers and join us at the evaluation stage.

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3 weeks ago

Exactly, it needs a lot of research and understanding before buying a coin incase unexpected happens at least you know what you bought

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3 weeks ago

Haha as a noob in the crypto world for so long. I didn't also know what that used to mean. And I always look at the prices every now and then because I couldn't predict the next outcome. I mean, I thought in the past that you'd have to be able to read the first or notice the candlesticks work. And gosh the terms is really confusing me. Hahah but I quite tried my luck yesterday with EBEN. I bought 2 when the price was at 0.80 to 0.81. And quickly staked it on Benswap for long term I guess.

$ 0.00
3 weeks ago

That's great start at low capital don't risk big amounts if you don't know what you are doing yet, I mean you don't know much yet..

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3 weeks ago

Yeah hahah I was lucky to avail it at 0.80 though. Today I think it's somewhere within 0.83$. But I'm staking it to have some passive earning hehe.

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3 weeks ago

Let me ask some questions pls because I am still not getting this basics of trading and I don't even know the right coin to start trading with apart from Bch.

  1. How do I learn the basics of trading?
  2. If we set our limits to sell a coin, do we lose?
  3. What does the leverage implies in trading?
$ 0.00
3 weeks ago
  1. To learn the basic of trading? Read the article, it is provided there.

  2. If you set sell limit higher from your buying price how come you'll lose? Of course not, you'll gain from that unless you set sell limit below your buying price.

  3. leverage trading is when you barrow more capital in exchanger to add on your margin.

$ 0.00
3 weeks ago

Alright. Thank you 🤗

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3 weeks ago

Wow, ganda Ng pagka explain sis ma intindihan ko lahat . I never dare to trade Kasi I don't really know the what and how of trading pero now I know. Siguro din I must try para mas maintindihan ko at maapply Ang mga knowledge na nalelearn ko. Hope soon maging courageous ako to try trading.

$ 0.00
3 weeks ago

Mahirap kasi talaga intindihin ang trading sis, keep learning slowly lang kahit ako nga eh di ko pa rin talaga gamay trading haha

$ 0.00
3 weeks ago

I will thanks sa pagshare sis. Naka gain ako Ng knowledge sa writings mo.

$ 0.00
3 weeks ago

Welcome sis, happy to help 😊

$ 0.00
3 weeks ago

At sa wakas po may nakapagpaliwanag n po sakin ng tungkol dyan. Matagal na din po ako gumagamit ng crypto pero hindi ko pa rin po minsan maintindihan yung tungkol jan. Buti na lang po ay nabasa ko ito at makakatulong po talaga ito para madagdagan yung nalalaman ko po.

$ 0.00
3 weeks ago

Hehe, keep learning lang talaga para may matutunan 😊 thanks for reading.

$ 0.00
3 weeks ago

Yes po noted. Welcome po. 💖

$ 0.00
3 weeks ago

Ung sa kulay naisip ko noon ay yung oag red ng market pag bumababa tas green pag tumataas tugma kasi buy and sell. Pero hanggang spot lang talaga ako, ayaw ko na etry ang future ahaha.

$ 0.00
3 weeks ago

Hahaha nakakapagod talaga aralin ang futures pero okay lang nmn sana kung yun lang talaga atupagin, wla ma iba kasi mahirap pag di nabantayan.. siguro pag malaki na anak ko saka na ako mag focus dyan..

$ 0.00
3 weeks ago

Yon nga ee, bata kapa naman pag halimbawa lumaki na si Rayleigh yaka yan. Baka yan talaga ang magpapayaman sau omoo

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3 weeks ago

Now I know what those two animals meant in the trading world. 😄 Pero seryoso, i only became interested in crypto because of noise and read. Will gather more info from articles such as these para matuto nang maigi.

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3 weeks ago

Same, I only know these things through read.cash and noise.cash.. yes dyor and keep learning lang.

$ 0.00
3 weeks ago

Awee. Salamat nito sis. Already saved it. Laking tulong nito. Lalo nat newbie pa ako nito. Still of course, need to study it too para alam ko ginagawa ko. hehe

$ 0.00
3 weeks ago

Yes, basic lang yan, din dyor for more hehe keep learning!

$ 0.00
3 weeks ago

Bookmarked. When I have mined enough to trade, I'll get back to this lol! I noticed there is captcha now.

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3 weeks ago

Yeah, they added captcha maybe a lot of bots mining HAHAHA

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3 weeks ago

Applicable din ba to sa storm gain?

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3 weeks ago

Sa Stormgain yan gamit ko na chart 😂 basahin mo maigi hehe may guide dyan

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3 weeks ago

Oo, nisave ko na para balik balikan ko, heje

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3 weeks ago

Thanks for this po. This will serve as my reference soon kApag nagstart na ako sa trading

$ 0.00
3 weeks ago

Sure welcome hehe. Good luck on learning 😊

$ 0.00
3 weeks ago

Nakapa informative nito sis.. Lately ko lang din naintindihan ang basic concent ng trading.. Akala ko dati pag pataas green at pag pababa ay red.. Hehehe..

Never ko pa natry yang short selling.. Mukhang magandang opportunity kapag pababa ang price noh?

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3 weeks ago

Oo, pero leverage trading lang applicable yun pero dapat ingat ka talaga mahirap pag nag bounce back at di ka nakabantay sunog ang labas hehe.

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3 weeks ago

Nakita ko na sa isang video tutorial hang leverage trading na yan.. Litong lito ako kaya hindi ko na tinuloy.. Hehe

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3 weeks ago

Very nice ma'am👏 you did a very good job explaining some of the concepts involved in trading. I learnt forex trading some years back and almost all of the tools and concepts are the same with crypto trading.

What you talked about is actually just the tip of the iceberg, there are so many things that is involved in trading, you have talked about how and when to buy and sell (buy low and sell high), but there's something even more important; How to know when to buy. And that's the technical part of trading, which is called technical analysis 😉

$ 0.00
3 weeks ago

oh thanks.. i learned alot specially on why the value goes up and down..thanks!

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3 weeks ago

I am learning to use the market, I still get stuck buying when I shouldn't, but I have recovered, I just wait for the price to go up to sell.

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3 weeks ago

Di nako gnahan og trade oy. Baba kaayo BCH. Kawalag gana. Haha

$ 0.00
3 weeks ago

Lagi uy ahak.. rank #19 na lang naunsa nani uy asa na ang $30k before year ends 😂😂

$ 0.00
3 weeks ago

I really have this weird super power, I bought them coins for so low, and then they get lower... :D Amazing.

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3 weeks ago

HAHAHA maybe Bogdanoff calls 😂

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3 weeks ago

hahah that makes sense..

$ 0.00
3 weeks ago

I don't know even a lil bit about buy low and sell high. But today I learnd why the color of buy button is green and the color of the button sell is red. But still I need to learn so much about it. Thank you for this information.

$ 0.00
3 weeks ago

Sure, keep learning 😊

$ 0.00
3 weeks ago

Trading has not been my thing but am getting better and enjoying it nw

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3 weeks ago

That's cool 😎

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3 weeks ago

Even though i know basics of trading but

You won't believe 4-5days back i sold my assets in 75$ loss and converted into fiat

And i always do this it's not first time happened so I'm living in parallel universe where i sell low and buy high

$ 0.00
3 weeks ago

Why are you doing that? Unless if you really need the money it's understandable but if not, why? Panic selling feels?

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3 weeks ago

This time i sold becuase everyone was saying BTC will fall down to 38k and i was already in 75$ loss and after hearing this i got panic and sold my assets in loss than mom asked to go for shopping and i sold my USDT and decided to not invest again and stop this right here.

$ 0.00
3 weeks ago

It's fine, just learn lesson from it. Don't let FUD consume you.

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3 weeks ago