Investment Vs Trading

Investment is for those people who have more patience and whereas trading is for those who look for excitement while trying to earn a profit. Any type of valuable asset like stocks, commodities, currencies can be held for long-term or it can be traded immediately within a short span of time to earn a profit.  The biggest difference between investment and trading is that how much longer one wants to hold on to his asset.

Investment

People who prefer investments are patient and are ready to wait for years to earn their return on investment. It is idle for people who are not willing to take a risk and wants their investment to grow in time.  Their money won’t double overnight; it takes years to earn a return.

Trading

In the case of trading, people hold the assets anywhere between few seconds or minutes to weeks.  In the last few years, we have seen an exponential growth in the field of trading, thanks to the growth in technology and more people entering the market. Now there are high-frequency traders who will hold the position of the assets only for a fraction of second.  Few of these high-frequency traders use the help of automated trading software like bitcoin loophole. You can learn all about on the website. They help in faster transactions and the decisions are taken immediately. There is no wastage of time.

Trading strategies

Momentum traders- These traders look for those assets which will make the major move down or up and have high trading volume. They hold on to the asset till the price reaches the pre-set level. It might take just a few minutes or it will take an entire day.

Technical traders- The technical traders are on the lookout for trends or patterns in bond, stock, currency charts, etc.  Then they conduct the similar transactions based on what had happened earlier during the same pattern time in the past.  They do not have much idea about the assets they are holding, they take decisions only on the basis of how the chart looks like.

Fundamental traders- These traders conduct transactions on the basis of asset’s fundamentals like profits, debt levels, and earnings.  The fundamental traders will sell or buy the asset based on the upcoming earnings report of the organizations or if there is any anticipated acquisition.  Since the change in organizations fundamentals takes time, these traders hold the position for several days or at times many weeks.

 

 

 

 

 

 

Is it time for state-backed cryptocurrencies?

Love it or hate it but don’t ignore the cryptocurrency because it is here to stay. Bitcoin, the most famous of the cryptos is an electronic peer-to-peer cash system which has been around for almost a decade but has gained more prominence in the rest of the world only during its tumultuous ride last year. Finally, the traditional financial institutions and governments have woken up to the immense possibilities the cryptos and the underlying technology have. Switzerland is one country that is excited about the cryptocurrencies and why shouldn’t it be, it is known as the Crypto Valley because it is home to some of the most popular blockchain enterprises like the Ethereum Alliance.  The Swiss government is ready to explore the possibilities of launching a “state-backed” cryptocurrency.

Cryptocurrencies are safe and do away with the middleman usually involved in all monetary transactions besides cash. Their decentralized nature and the lack of regulations means that any State that wishes to launch its own cryptocurrency has to overcome several legal, economic and financial challenges before it becomes a reality and a viable option.

But everyone in this land of exquisite beauty is not convinced with the need for a state-backed cryptocurrency. The Swiss Central Bank differs in its opinion on cryptocurrencies. It states that there is no proof that digital currency will ensure an efficient cashless payment system. The bank further says that there would be no significant advantage by turning the crypto way, on the contrary, it will harm the financial stability of the nation and would pave way for several unforeseen problems especially in the times of a crisis.

There are other examples of countries that wish to release their own digital coins and some which have already launched their state-backed cryptocurrency. For example, Venezuela released its first digital currency Petro but it has come under scrutiny for use in less than honorable ways. Russia is another country exploring the possibilities of launching its own cryptocurrency with some specific conditions.

What makes national cryptocurrency an exciting possibility is that they will be more stable as they will have the backing of the fiat currency and hence will be free from the volatility plaguing cryptocurrencies. But Central Banks must consider all the repercussions and side effect of a state-backed digital currency before issuing it.

If all this talk of cryptos has you excited you can get your own by downloading the Ethereum Code. Find out more before you invest in any software.