Welcome back, in this article I would be continuing our discussion on how to trade Cryptos.
****** Part 2 continues… ******
Post registering on any of the Domestic/Indian platform and exchanging your fiat currency against cryptocurrencies, you must have almost got a feel for how it works.
In case you are wondering what else is left, your domestic platforms are not the only platforms. There are more and there are platforms with more number of coins which help you gain on arbitrage opportunities, better prices and opens a plethora of new coins to you. Binance is one such platform & Kucoin being the other.
Making an account on these is highly recommended:
These are not your fiat currency exchanges. These exchanges work to let you exchange some of your coins (Bitcoin-BTC, Ethereum-ETH, Neo-NEO, Tether-USDT) against any other coin available on the platform.
Your trading platform on Kucoin would look this way. You need not look at everything at once, but concentrate on the two market portions:
- Point 1 (marked in above picture) gives you the coins against which you can trade. They can be considered as your base coins. So any coins you deposit and available on the platform can be traded against either of these base coins. These base coins either can then be kept in wallet or can be further traded to get any other coin.
- Point 2 (marked in above picture), Let’s consider an example: Here as you can see the coin Dent-DENT is trading at 0.000040 Ethereum-ETH per coin. You can also see the value of the coin in blue. It is showing a value of INR 3.33. It means you can buy one Dent-DENT coin for 0.000040 of Ethereum-ETH. If you have one ether, you would be able to buy 25000 Dent-DENT.
Now consider you made commendable profits. You bought dent at INR 3.33 (i.e. against 0.000040 ether per coin @ when Ethereum- ETH was INR 90000). When you bought dent you had put up a sell order at 0.000080 Ethereum-ETH per Dent-DENT i.e. you wanted to sell your dent at twice the price you had purchased them or at INR 6.66 per dent. You saw that at one point in time Dent-DENT crossed INR 6.66 but your order was not executed. Now the price per Dent-DENT is INR 4.
Well, there can be numerous reasons for the same. Dent-DENT crossed INR 6.66 at a given time and there were buyers who were ready to pay a high price to sellers and the sellers were ready to sell for low. Technically your order never got into the line of execution. The other reason might be Dent-DENT also doubled during the same time leaving the ratio of Dent-DENT to ether constant at 0.00040. Hence, your sell order at 0.000080 was never generated. As you can clearly observe, your buy price and sell price depend on the base coin price as well.
If I were to put it in simple terms, it would be playing football on a ship travelling at high speeds in a rough sea. You need to defend the goal post, but alas, everything moves. 😀
Coming to the next point. Your orders need to change according to the price of the base coins. As a thumb rule for beginners, I would suggest, you keep your base coin fixed. Choose a coin among the encircled ones, which have shown a constant growth trend. Once you choose a coin, all you need to do is target the number of coins you need to buy and or sell of the other coins. Eg: You have one Ethereum-ETH and you would like to buy 50000 Dent-DENT, keep your buy order of Dent-DENT against Ethereum-ETH at 0.000020. Sometime in near future Ethereum-ETH price might increase and Dent-DENT price might stay constant. Your ratio would be achieved quite early. You would have gained 50000 Dent-DENT, or a vice versa situation might also come in to play.
To check on how to transfer coins from one wallet to another do check the video tutorial link below:
Coin Transfer Preview: Koinex.in Wallet