As part of James’s commitment to helping cryptocurrency achieve greater and greater mass adoption, we will be starting a series of articles also positioned to beginners who are just entering the world of cryptocurrency trading.
Here we explain a little more about some of the terms you will come across in crypto trading, such as trading, stop loss and technical analysis.
If you have seen James’ daily Youtube videos, you may have seen him using the Bybit trading platform to highlight his trades and other up to date information about the cryptocurrency market (and if you haven't, you can subscribe here!)
Crypto Trading & Day Trading vs. Crypto Investing.
The difference between crypto trading and investing
As you start to navigate the cryptocurrency world, it is important for you to clearly understand the difference between crypto trading and crypto investing.
Many people incorrectly use these two terms interchangeably, but they are actually different. The only thing they have in common is the end goal - making profit!
Crypto investing means that you commit yourself to hodl (hold cryptocurrency) for a much longer period of time, either through staking to earn APR on your holdings, or to take a longer term speculation on the performance of the cryptocurrency.
If you don't want to take a daily interest in cryptocurrency, but still want to dip into the market, then crypto investing might be more for you. However, this investment strategy means that you would be committed to your investment for months, or even years.
Crypto trading involves a much more short term strategy. Crypto traders look to take advantage of the volatile nature of the cryptocurrency market, seeking to make gains during price fluctuations.
The short term in crypto trading means days, hours, and in some cases even minutes.
Whilst crypto trading demands more focus and effort, it can also generate overnight profitability when conducted correctly. If you have already tested the waters with some crypto investments, and have a basic understanding of how to navigate crypto wallets and exchanges, then crypto trading might be a great progression for you in terms of profit potential.
James helps his students to learn to successfully conduct day trading with stop losses, taking profit using leverage.
Crypto day trading is a series of techniques helping you to take advantage of super short-term changes in cryptocurrencies. The goal of a day trader is to end each given trading period with higher value of holdings than you started with.
There is a high element of risk in this activity, and without an effective strategy, you would be effectively gambling rather than trading. A good strategy makes the difference between a few lucky streaks and consistent gains over time.
Part of James’s crypto trading armory are stop losses. Essentially, a stop loss is a trading tool designed to limit the maximum loss of a trade through automatically liquidating assets once the market price reaches a specified value.
A cryptocurrency trader will use a stop loss to limit potential losses to no more than they can sustain. For example, as the market experiences a pull back, a stop loss would trigger a trade out of the current position.
Due to the intrinsic volatility of the cryptocurrency market, stop losses have become a must have part of every successful traders armory, and James can teach you how to best utilize them.
One of the best methods to estimate possibly profitable entry and exit points for crypto trading is crypto technical analysis. Essentially, this is the analysis of the past price actions of cryptocurrencies in order to identify patterns of support or resistance areas, current trends or potential trend reversals.
Technical analysis has a proven history in forex markets, and many of the methods used can increase crypto trading success rates.
James undertakes detailed technical analysis daily in his Youtube channel, often using the Bybit exchange to demonstrate his own personal trades. If you wish to join him on Bybit, signing up with this link will give you up $4,450 in exclusive bonuses.
Join us now on our new Telegram Crypto Guru channel which will allow you to learn and grow as James often posts his live trades over there for free.
In our next article James will deal with the basics of trading, the different types of trading, and some simple, yet essential best practices to follow.
Good luck Gurus!