Crypto trading VS classic markets

Cryptocurrency trading attracts many traders with its opportunities to earn big money in a fairly short time compared to the classic markets. What other differences exist and how do they affect the trader’s strategy, we asked one of the coolest trading experts.

Nikita Semov, trader and founder of CryptoMentors

There are a number of differences in trading cryptocurrencies from the classical markets.

1. Liquidity and volatility. The volume of futures trading on the American S&P index is about 6 billion per day, while the average number of traded funds in the cryptocurrency market is about $1.8 billion per day. In this regard, it becomes obvious that there is many times less money in the cryptocurrency market, which means that the asset moves more “sweepingly”. If for the American stock market a decrease of 10% per day is a catastrophe, then for bitcoin it is the average statistical amplitude. Such significant fluctuations give traders the opportunity to earn on intraday speculation, and investors to receive those very coveted X’s in a short period of time (when compared with the stock market)

2. Fragmentation. A concept that describes the heterogeneity of a financial instrument. In simple terms, there is no centralization like in the stock market, because of this, quotes differ slightly, which complicates trading based on reading raw exchange information (scalping or volume analysis). Some whale buys on one exchange, sells on the second, and you have to follow not just one instrument chart, but several at once, in order to make the most competent financial decision.

These are the features that are typical for cryptocurrency market quotes. The trader’s task is to take into account these features in trading. The basic rules remain unchanged: in any market, the movement of the chart occurs solely due to the actions of buyers and sellers. And you can earn at a distance only with trading according to a compiled algorithm, which includes a detailed description of the points of entry and exit to the transaction, as well as compliance with risks. If at least one of these elements is missing, it will simply not work to make money at a distance of at least 100 transactions.

Do you want to know more secrets of successful trading? Come to Blockchain Life 2022 on September 14-15!


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