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.
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.
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.
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.
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.
Decrypting the Crypto Puzzle
The world of finance is ever evolving. With the advancement of technology and internet, the opportunities in the world of finance have become almost infinite. A decade back, we probably could never think of something like virtual currencies and this being developed as an alternative to the traditional currency. All that we could imagine about a paperless economy was the money in our bank’s accounts and the online transactions we could perform with that money. The interesting fact is how this form of money can be considered as legit without it being regulated by any Government body like an Apex Bank. The creators claim that these work on the blockchain concept and are powerful, safe and decentralized. Even while the majority of the financially literate crowd still continue to have their doubts on this form of currency, it seems to have taken the financial markets by storm.
The Block Chain Technology
The internet was one concept that changed the world and has definitely made our lives better. Similarly, Block Chain Technology is one such invention whose possibilities are yet to be ascertained. Though this was invented to create digital currencies, the technology is viewed as a gateway to many other platforms. In simple words, blockchain technology is an incorruptible digital ledger of transactions that are stored chronologically. The information stored is continuously reconciled or updated. This technology can be used not only to record the financial transactions but also to virtually present anything of value. Hence this technology serves as a base for the development of an alternative to the traditional form of money.
The Ethereum Blockchain
Ethereum is one of the cryptocurrencies created followed by the popularity of BitCoins. It was developed by a Swiss Non-profit organization. It is a decentralized platform that is capable of executing smart contracts as it can transfer the value and represent ownership of property. The powerful blockchain technology is what provides a safe and secure way of conducting these transactions. This is perhaps the main reason for the quick acceptance of this platform worldwide.
Novel Platforms of Trading
With the introduction of these new forms of currency, there has been a spurt in the number of online portals that offer trading propositions in this field. The portals that offered to trade in Forex are now offering an online trade of cryptocurrencies as this field seems more profitable. Ethereum being one of the popular cryptocurrencies, we have Ethereum Code Ltd that offers an automated trading platform to deal with different types of cryptocurrencies. The website provides demo versions so that the user can trade on it to understand as to how this platform works. It is a good choice for investors who are new to this type of trading.
Whether you are a day trader, a swing trader or a positional trader, the first thing that pops up in your mind is what time frame to trade on. The time frame that you are most comfortable trading on is your base time frame. This will help you understand the other two time frames that you should be trading with.
Once you know what your base timeframe is the next step is to know what should be the minor and the major time frames. This is the time frame above and below the base time frame. So suppose your base time frame is a 5-minute chart then your major time frame chart will be a 15 minutes chart and the minor time frame chart will be a 1 min chart. This same principle can be applied to various time frames and for different types of traders.
What does each time frame tell you?
The major time frame is basically where you will need to check the trend of the asset you are trading in. This will give you an idea of whether you want to be a buyer or a seller on this particular security. Once you understand that then look for a base time frame and here you need to know where to be a buyer or a seller. You will be looking for pull-backs here to enter the trade. The lower time frame is used to fine-tune the entry levels that you have marked on the base time frame.
You may also be a breakout trader. In such a case you want to ensure that the breakout trade that you take is in line with the major time frame. If you are taking a long breakout but the major time frame is in a downtrend then you are likely to be stopped out.
The most powerful and high probability trades are those when all the three-time frames are moving in the same direction. Check out the full review.
Entry and exit on the base time frame
Make sure that your entry and exit is in the base time frame. You cannot use a 15-minute chart to plan your entry and then a 5-minute chart to plan your exit. This does not work out. If you do this then you will be stopped out of the trade soon or will get out of the trade very fast, only to see that the price moves high in your trade direction. The minor and the major time frames are like add-on indicators but all your trading decisions need to be made on the base time frame only.