This site is used as a trading platform for sale and purchase of digital assets.
Exchange transactions on the cryptocurrency exchange are identical to any other. In order to get a profit, you need to buy cheaper and sell more expensive. Just the same as investing in fiat currency. Certainly, the tools base and the principle of defining trading targets are set in the same way as on the securities markets or forex. Making a profit from trading with virtual money will not be a problem for those who know the basics of trading on the stock, securities, and national currencies markets.
These are the main components with which the participant of trading on the cryptocurrency exchange operates:
orders for sale and purchase;
history of transactions;
trading volume held on the exchange.
To understand the basics of a cryptocurrency exchange, it is worth to consider all these elements one by one.
The graph is a history of the course of one cryptocurrency in relation to another or to fiat money. The graph is presented in the form of Japanese candles, clearly demonstrates the development of the ratio of spread difference through time. Spread is the difference between the current offers, the best values for sell (ask) and purchase (bid) or the currencies that are trending on the exchange.
The Japanese candle indicates the price movement during the certain period of time. Graphs of one and the same pair of cryptocurrencies can be presented with different time axes, for example, an hourly graph or a 15-minute graph, in which, respectively, the unit of time is an hour or 15 minutes. One candle shows the values that were relevant for this period of time.
The body of the candle, that is, a rectangle, is formed from the values at the beginning of the next time period and its end. If the opening level is below than the closing level, then this candle is called bullish and turning red. Reversely, the bearish candle is colored green. So visually it becomes clear that with the bull candle the course grew, and with the bear candle it fell.
The lines extending from the candle, called shadows, indicate the highs and lows that were recorded during the formation of the candle. If the upper shadow is absent, it is said that the top of the candle is cut off, and if the lower shadow is absent - then the base is cut off. Doji are the candles, which actually have no body, so the price at the beginning of the time period and at the end is equal. Spinning Tops are candles with small body size. The ability to read candles makes trading cryptocurrencies much easier.
Buy and Sell Orders
Orders for the purchase/sale from the traders of the cryptocurrency exchange form the so-called Market Depth. This is a list of users’ requests to buy or sell one cryptocurrency for another or for fiat money and approximation to the current price at which the pair is traded.
The rate of supply, the total amount of cryptocurrency that is to be bought or sold at this rate and the total amount of the second cryptocurrency or real money for which the operation is performed is provided to the traders.
Market Depth demonstrates the wish to trade cryptocurrency at the desirable rate. If there is a counter offer to sell or buy, then the transaction is made, and the current price of the traded pair is adjusted according to the conducted transaction. It should be taken into account that, for example, if there is a sell order, the counter offers of purchase are searched at an equal or higher price. In the absence of counter offer, the order remains on the call list, or until the command to cancel the order comes from the participant who placed it.
Market analysis on Market Depth
Only on the basis of data from the Market Depth, one can perform analysis and make decisions on trading. The first thing that can be calculated based on the list is the current spread for the pair being traded. To do this, the first entries from the list are taken, and their difference is calculated: 5367-5343 = 24 dollars.
On the basis of the orders placed in a book order with a large volume, it is possible to predict the future behavior of the price chart before trading on the cryptocurrency exchange. So if major orders for purchase are found, then we can expect a quick growth. Otherwise, a major sell order is likely to push the rate down.
It is important to remember that not all requests made by participants are indicated in the list. Only positions that are closest to the current price are displayed in it, therefore it is quite challenging to find out how the rate will react after a number of processed major positions. This means that if only price quotation are taken into account, only a short-term analysis is to be expected. For a deeper analysis, it will be necessary to apply such approaches, which include a news review regarding the pair to be traded, or technical analysis tools.