In this post, we’ll be going over how to make money from Forex trading using the volatility of currencies and applying it to our cryptocurrency portfolio. I recommend you take this course on YouTube if you are interested in learning more about making money trading cryptocurrencies and getting started with a crypto fund.
1. What is The VIX (Veariosity Index)?
VIX index measures prices and their fluctuations in real-time, like many other stock indexes. It measures the general movement of stocks across major exchanges such as NYSE or COMEX.
The VIX index works by measuring the average market capitalization of large companies within each sectors like banks, retail, technology, transportation and consumer goods. Essentially it measures the value investors are willing to pay for these companies.
Stocks usually display a higher percentage when investors are feeling bullish. Therefore, they feel that buying some stock could be worth it to increase profits. This means that investors tend to hold companies that show great growth potential. Hence, the higher the VIX (Vearioities Index), the better they will perform. However, the lower the VIX, the worse they performed; hence, a sign of a bear market. Now let’s see how you can trade like one!
So what does this mean for beginners?
Well, first of all, keep some time to read through my previous article on Bitcoin and the Stock Market
If you need help understanding the world of finance, have some doubts or just want to start investing, then please check out our guide on how to get started with Bitcoin for beginners, but most importantly, if you have any questions, don’t hesitate to ask them in our support forums.
2. When Should You Trade Crypto FX?
When there is an expected shift in global price trends, we say it a “Bullish signal” and consider doing so, however, before you do so, it would be wise to review your strategy and choose the right time. Always do your homework regarding what you want to achieve through trading. For example, we would be very happy to acquire new clients if we saw good opportunities. Most importantly, always keep in mind that you should always focus on long term goals. If the overall trend remains clear but the current one changes, do not put your faith in selling but instead buy and wait for the change to return.
3. Are There Any Volatility Indices That Can Help You Get A Better View Of Cryptocurrency Prices?
Yes, it is possible to use some basic tools like Google Trends, Yahoo Finance, etc., to understand the way that the currency markets have been trending for a certain period of time. Also, looking at the historical data for a given sector can give you insight into how the coin might move in near future. As such, if you look at where a particular cryptocurrency hit $100,000 recently but it dropped to $20,000 the next day, it may indicate a technical weakness of that token. Therefore, you need to study more to uncover the movements of the coins.
4. Do Cryptocurrencies Have Long Term High Peculiarities?
If you are looking to invest in cryptos, try to understand their short and medium term strategies. This way you can select a suitable strategy for your investment. On the other hand, if you want to short cryptos, you can do so by researching various indicators to find the best one. Such indicators include Moving Average Convergence/DMA/ Relative Strength Index, Stochastic Oscillation or Trendline, etc.
5. Which Cryptocurrencies Will Show Bad Interactions In 2 Days, 1 Week, Or 1 Month Ago?
You should always be aware of the fact that sometimes unexpected changes can occur within two days. Therefore, it is best to look at how things go and then decide whether you should sell or buy depending on how the coin has reacted. If the price had fallen to below $0.10 per share in 24 days’ time, you wouldn’t consider holding onto it. Similarly, in case of a bull run, a strong rise by 30–60% of its current market cap should not be seen. One more thing we would also tell you is that you should consider buying high priced digital assets since they carry risk, but they can provide excellent returns in the long term. So, stay away from heavily traded tokens like BTC if you want to have some passive income as well.
Also Read – 5 Ways to Take Profit With Crypto Exchanges | Beginner’s Guide
6. Is More Time Needed To Earn From Buying And Holding Digital Assets?
This depends a lot on the type of trades you are planning to make. Here, a trader who thinks that he needs a minimum of 12 months to earn from trading, must wait till the year 2020, otherwise the crypto market will crash down, whereas a trader who is looking to make big amounts of profit in the second half of 2020, only needs to wait until January 2021.
7. Does Your Account Support Enough Trades?
The bigger the account, the more your chances of earning the maximum amount of revenue. But if you think otherwise, never invest in a few small accounts and instead buy many small ones, which offer more flexibility. An account with 100k USD is okay to hold some small positions in different cryptocurrencies. But make sure you know the exact position you are planning to sell or buy in particular and it does not exceed 50–100k USD.
8. Do Not Forget About Leverage And Gambling!
Leverage is used to gain more power at the expense of the owner. Therefore, if you are dealing with leverage, it is important to understand how much it will cost you and whether you will even be able to make money with it. You can make sure that you’re only using leverage if it’s required, otherwise keep off from it. Likewise, gambling is a game that takes only a few seconds to learn, it can be fun and rewarding if done wisely. If the money that you won can make you a million dollars, then you can gamble on it. Although you can never lose, if the win helps your daily needs you should definitely play it. Also, remember that once you can’t beat someone else by betting on something then you will also need to be careful about losing it.
9. Is It OK To Invest Directly Into Tokens?
If you wish to invest directly into the company or an ICO, you need to contact either the team or the founders to request for the direct transfer to your wallet address, otherwise they want to charge a commission to do so, which may become your loss or your personal money. On the same point, it will be safer to invest in pre-mined coins rather than those created last year. So, try out any coin that is under scrutiny and ask yourself whether you think it’s safe to invest in it or not.
10. Keep Reading & Understanding These 4 Simple Rules To Successful Daily Crypto Trading
Stay tuned here we’ll have another helpful piece:
