How to take advantage of market quantities for cryptocurrency investment strategies
The world of cryptocurrencies has received considerable attention in recent years, and many investors and merchants have sought to benefit from the potential return. One of the key factors that can contribute to the value of cryptocurrency is its market volume. Although some may consider the volume of the market as non-relevant or even an obstacle to investment in cryptocurrencies, it can be a precious tool to understand how to take advantage of the market volume of investment strategies.
What are the market volumes?
The volume of the market refers to the total amount of the currency transferred within a given time (generally one day). This is calculated to multiply the number of transactions by 1000 (commercial quantity). For example, if the negotiation volume of cryptocurrencies is $ 10 million and there are 1,000 exchanges per minute, the market capitalization would be $ 100 billion.
How to take advantage of market volumes
Although market volatility can have it disputed to predict price movements with certainty, understanding the market volume of investment strategies can help. Here are some methods for this:
Use market depth to your advantages
The depth of the market refers to trading per minute (generally one day) in a given period (generally one day). The deeper market can be used at lower prices to buy or sell a currency, which makes you cheaper to enter and leave.
* Low purchase, high sales : one of the easiest ways to use market volumes is low purchases and high sale. This includes the use of market depth to buy cryptocurrencies at a lower price, then sell when they reach a higher price.
* The trend trend : Another approach is to use strategies that benefit from market volatility, such as low purchases during a relapse and high sales when the market is recovered.
Use time decomposition
A warning indicates the loss of the value of the investment over time due to differences in interest. This means that the value of cryptocurrency can decrease when it becomes more liquid or because there are less new transactions.
* Holiday strategies : One way to use market volumes is to buy coverage strategies such as opportunities or to sell term contracts.
* Dollar-COUTTER of the average : Another approach is to carry out the means of dollar costs where you invest a fixed amount at regular intervals, regardless of market performance.
Use a lever effect
The lever effect suggests that it is used to use capital borrowed to increase possible yields. This can be done by trade in margins or using derivatives such as term contracts or options.
* Rargin Trade : The cover of the coverage includes the rental of money from the brokerage to buy more shares than you have on your account.
* SPREAD options : The use of the propagation of options allows you to take advantage of the decline in time while covering potential losses.
Avoid optimism
Although market volume can be an effective tool for making investment decisions, it is essential to avoid optimism. Market conditions are intrinsically unpredictable and can change quickly, resulting in significant losses if they are not carefully treated.
* Stay discipline : It is essential to remain disciplined and to focus on investment strategy, even against market volatility.
* Diversify your portfolio : Diversification of the portfolio can help you invest in many assets and to facilitate adaptation to changing market conditions.
Conclusion
The exploitation of the quantities of the market is only one aspect of a successful investment in cryptocurrency. By understanding how to use the depth of the market, the decomposition of time, the lever effect and to avoid optimism, you can create a solid investment strategy that promotes your financial objectives. Do not forget to stay disciplined, diversify your wallet and adapt to changing market conditions to maximize the performance.