There are two kinds of traders who trade in the cryptocurrency market. They are longterm traders and short-term traders.
The long-term traders are those who buy the cryptocurrency and hold on to it for a very long time. They hold on to the currency for weeks or months and sometimes even for years. The long-term investors in cryptocurrency study the long-term trend of the coin and this helps them to take an informed decision. This is beneficial because they are saved from the short-term volatility.
If you believe that the future of cryptocurrencies very optimistic then it makes sense to buy and hold on to them. This saves you from the short-term dips.
Short term traders
The short-term traders in cryptocurrency want to take advantage of the short-term movements that happen in cryptocurrency.If you are the one who likes to take part in the volatility of the cryptocurrency then you are a short-term trader.
What are the benefits of trading in cryptocurrency?
Whatever kind of trader you are it is important to understand the benefits of trading cryptocurrency.
The fees for trading are cheaper and the exchange that you trade cryptocurrency is also faster. The exchange platform will take a small amount as a commission for the service that they are offering to you. The size of the fee is where trading in cryptocurrency is different from trading in the Forex market. The fees that you pay to transfer the cryptocurrency are cheaper and this makes it cheap to trade on them too.
Volatility lets the traders make profits by quick price movements.Thecryptocurrenciesare highly volatile and thus offer large movements in price. This increases risk but also gives you the potential to make huge profits.
The cryptocurrency market is open on all days. Thismeansthatthereis no time restriction on when you can trade on them. You can trade on them anytime and from anywhere and thus trading in cryptocurrencies is possible even for those who are in a full-time job.
Trading in Bitcoin Codecryptocurrency works exactly like trading in Forex but instead of a fiat currency you are basically buying and selling digital currency.
Here too you trade on a currency pair like US dollar and Bitcoin. If you think that the process of Bitcoin will go up when you go long on bitcoin and short on US dollar. Tyou sells bitcoin when you think short the pair.