With currently over 5,000 different crypto currencies, it is not so easy to keep track of them. Just for beginners, it is difficult to find out which crypto currencies are best suited for and how they will be evaluated. Often random and emotion-driven decisions. But that is over now! In this article we want to give you 7 tips to help you understand Bitcoin better.
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7 tips in order to understand crypto-currencies better
In order to understand the world of cryptocurrencies better, there are a lot of ways: While A bet on the Power of chart analysis, faith promise, the Other only to the fundamental Value. Of course, the two can combine. We want to throw in this article, therefore, a look at indicators of technical analysis as well as all the trivial aspects.
Chart analysis on the Basis of the Dow theory: Power of information
Probably the most familiar with the Dow Jones Industrial Average. This is probably one of the best-known stock indices in the world. This Index was named after a certain gentleman by the name of Charles Dow. Dow wrote, in turn, includes a Theorem, which is 6 individual aspects, and is still today the Basis for most of the chart analysis is.The pricing of information is one of the Central points. In other words, The Chart and current price is always the result of all of the information that it gives to a particular Asset. Therefore, our first tip: Throw is a look at the Chart to get a feel for the current mood and Situation. There are many factors that influence the price and the result of all these influences we see in the end is always in the Chart. Because he is the one who shows us how the assessment of investors has changed in the past up to the current time.
Tip # 2: The three fundamental phases of the market
Here, too, we can look to the work of Charles Dow. Because the Dow divided the market into three basic phases: the accumulation phase, the absorption phase (engl. absorption phase) and the distribution phase (engl. distribution phase).Accumulation phase: This Phase runs in both direction. This means that experienced traders buy either a large amount of Coins (=accumulate), or you begin to sell. They act opposite to the ‘mass’, so that the price remains largely stable.Absorption phase: The accumulation phase is detected, so that more and more people follow this Trend (= you absorb it). As a result, we achieve either high or low levels.Distribution phase: this Is a historic high or low is reached first, the Phase of the distribution. On an all-time high, many investors sell their Coins and at a low level to sell (unfortunately) often the less experienced retail investors. It has a wide distribution occurs so that the price will settle back to a ’normal‘ level.
Crypto-currencies, understand tip no. 3: The game on time
You win some and you lose some. This wisdom is especially true for those who trade currencies in short term intervals Crypto. Because the gains of One are the losses of the Other. Trading is a zero-sum game. In this context, you should so thinking about your time horizon make.You see yourself as a short-term speculator, or you’re an Investor who thinks long-term and sustainable. If you count yourself in the latter group, are for you, the just mentioned phases of the market is not so important. You’re playing on time, and are you sure that the price in 5 years is higher than today’s market value. This saves time, nerves and often a lot of money.Bitcoin savings plan: there’s Always the question after a good Investment is made strategy for BTC. With the help of the Cost Average effect and minimize you to sleep your risk, can better and benefit long term from the long-term development of Bitcoin and co. – it’s that Simple! As a Bitcoin savings plan works.
Market capitalization and Manipulation in the crypto market
Just beginners, we often hear questions about crypto-currencies, the maneuvering at Coinmarketcap somewhere between 50 and 200. The question of whether an Investment in Coin XY is not a good idea often, as this Coin has risen in the last week about fabulous 200,300, or more per cent. The answer to this is usually to Leave!Just because the smaller crypto-currencies (so-called small-cap coins) have a low market capitalization. This makes them especially susceptible to Manipulation and so-called ‘Pump and Dump’ games. In comparison, large-cap coins may offer less return, but they are however significantly more stable and more sustainable. The fourth tip is: take a look at the market capitalization and thus the size of a crypto-currency.
Crypto-currencies, understand with the Relative Strength Index (RSI)
Many investors shy away from often the use of technical indicators. This, at first glance, complex. We can encourage everyone to certain indicators of peace. A good example of this is the Relative Strength Index (RSI) is.This is an indicator that measures two aspects of a movement: the speed and the strength. Therefore, the RSI is just an indicator that compares the current price of a crypto currency with its historical Performance mentioned.From this we can quickly obtain the Information whether a certain amount of crypto-currency is overbought just (engl. overbought) or oversold (engl. oversold) is.
Emotions in the market are the drivers for decisions
Also if it is actually any rationality to resist, decisions are often driven by emotions. The man shows often as a “herd animal” and mimics the popular choices of the rest of the mass. Thus, irrational actions, which, in turn, provide for a rational Trader, tremendous opportunities arise often.Our tip is: Keep the current mood of the market in the eye. The movements are rational and certain of the reasons or emotions such as fear and greed drivers of the price movements?4 reasons why Bitcoin must have in each Portfolio are: Free from any ideology or emotions we show you in this article, 4 reasons why Bitcoin must in every Portfolio. Correlation, return-to-risk ratio, scarcity and Adoption are the four major keywords. We let the facts speak! Of the 4 reasons.
Crypto-currencies, understand? – Stick to Bitcoin
The last rule is the Golden rule, in order to understand crypto-currencies. It is easy and is still ignored by many: stick to Bitcoin. Because BTC is the dominant Element in the market. To put it differently: Bitcoin is the conductor of the entire orchestra.If Bitcoin rises as a solid, to attract investors, often the capital of the Altcoins to take advantage of the increase in the value of BTC. Only after a long growth phase, which ends with a gradual saturation, we see an inverted image: investors realize the potential of Bitcoin is exhausted up to the current time and are now looking to return in the Altcoins.Who is watching the development of Bitcoin exchange rate, one can draw many conclusions from it.What tip did you find most valuable? – How are you going to understand crypto-currencies and to rate you? Come on in to our Telegram Chat and talk with the experts and the Community!
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