Welcome to our free course on “Cryptocurrencies”. This course will teach you the basics of cryptocurrencies, explain the idea of blockchain, the mining process, how to trade, and explain the idea of investing and trading in the cryptocurrency market.
Chapter One:
The first chapter of this course aims to simplify the idea of cryptocurrency! Sit back, relax and enjoy reading about the creation of cryptocurrencies.
Chapter One: What is Cryptocurrency?
(1) The emergence of digital currencies
(2) Fundamentals of digital currencies
(3) How is the value of cryptocurrencies determined?
Chapter Two:
This chapter provides a simplified explanation of cryptocurrencies, the blockchain process, mining, and how wallets work.
Chapter 2: How do cryptocurrencies work?
(1) What is blockchain?
(2) What does cryptocurrency mining mean?
(3) Cryptocurrency wallets
Chapter Three:
Cryptocurrency trading has become a new corner in the world of trading and through it you will get your opportunity to trade and invest.
Chapter Three: Trading and Investing in Cryptocurrencies
(1) Best Cryptocurrencies to Trade
(2) Investing in cryptocurrencies
(3) The cryptocurrency market versus other markets
Chapter Four:
Knowing the meaning of the terms will make it easier for you to understand the matter in the next stages. Fortunately, you do not need to go through a lot of words, in this chapter we will explain the terms that are the cornerstone of the trading process.
Chapter Four: Cryptocurrency Trading Terminology
(1) Entry, Take Profit and Stop Loss
Entry, Take Profit (TP) and Stop Loss (SL) will be used in every trade you make. They are absolutely essential to the terminology of cryptocurrency trading! To understand these terms, we need to look at the anatomy of a trading process. So, let’s go back to the Bitcoin vs. USD example.
Trade Process Analysis
When you decide to enter into a trade, there are three aspects you should determine.
First: Your entry point.
This point is very simple and does not need much explanation, whenever you choose to enter a trade, the current price will be your entry point. For us, this means $10,000 in the case of BTC/USD.
Second: You will need to place a stop loss (SL).
The term “stop loss” abbreviated as (SL) is your safety net, through which you can reduce your losses and accept the limited loss you have suffered without losing more.
The reason for setting a “stop loss value” is to avoid losing all your money. The safety net will keep your losses down significantly, and for long term trading it is worth noting the importance of this parameter as if you lose everything in one trade then you will not be around for very long!
Third: Take Profit (TP).
This is the target you are aiming for and striving to achieve, and it represents the price at which you want to exit the trade in order to make your profits!
All of this works together so that if you are trading short term rather than long term, the basic process will look like this picture.
You will always place TP and SL when entering any trade. In the following courses you will learn how to place them, now the important thing is for you to remember the function that each one serves.
Short term and long term
These two terms are also used in every trade you make. They are very simple terms.
Short and long trades
If you are talking about it in short, you are saying that you want to sell it. In other words, you are predicting the value of the cryptocurrency’s price movement. You can make money on this trade! If you go long on a crypto, you are buying it because you expect its value to increase.
This is the basic formula for trading.
Let’s take Bitcoin/USD as an example. If you expect the price of Bitcoin to fall against the dollar, you need to choose a short-term trade.
So, you sell 1 Bitcoin at the current price of $10,000. And you think that value will go down!
Example of a short and long trade: If you believe the value will increase then you would look to buy with the hope of pushing to say $9,500 from an entry of $8,000.
Now, you may be wondering “When do I exit a trade?” and other similar questions. This will lead us to the next section where we will look at the parameters of trading.
Spread“Share your voice now and make your impact clear!”
How do brokers (trading platforms) earn from your trading? Answer: Through spread
It will help to look at the price structure here. When you go to the trading platform and look at the charts, you will see these three different prices.
Market Price – This is the current price of the currency in the market.
Purchase Price – This is the purchase price for you.
Selling Price – This is the selling price for you.
There is a difference between the buy and sell prices – this is what we call the spread.
It's basically a simple fee (single charge) for every time you enter a trade, and it shows how the broker makes some money through it.
The spread may vary depending on the volume of trades and the current price fluctuations. The more people are trading something, the smaller the spread becomes. It is an economic concept driven by the mechanism of competition between them. This is because more people are paying fees, which makes the broker lower his price and thus increases his ability to compete with other brokers.
The spread will not usually be very high but you should always be aware of the current spreads if you are looking to enter a trade.
With this, we have summarized the basic cryptocurrency trading terms that you need to know.
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