Farcaster

A Quick Guide to Working in the Market ---- Part1
You probably already know that any kind of market can be exciting due to its high volatility and potential for rapid growth, but it might be a good idea to go over the basics together. Because losses can hit you harder than you think—sometimes closer than you’d expect!
In this thread, we’ll go over the fundamentals

1/12  The Basics
– Blockchain: A chain of blocks used to record transactions.
– Cryptocurrency: Digital money.
– Mining, Tokens, Smart Contracts.
Do some reading: Check out the official Bitcoin and Ethereum websites, as well as free online courses

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2/12  Setting Goals and Budget
– Short-term (Trading): Daily/hourly fluctuations.
– Medium-term (Swing): A few weeks to a few months.
– Long-term (HODL): Months to years.
My suggestion: Allocate no more than 5–10% of your extra capital to crypto.

3/12  Choosing an Exchange
– CEX (Centralized Exchange): Like Binance or Coinbase—you sign up, verify your identity, and they handle everything. They’re easier to use and offer support, but they hold onto your private key (your transaction password).

3/12 Continued...
DEX (Decentralized Exchange): Like Uniswap or PancakeSwap—you trade without signing up or using a middleman. Everything runs on the blockchain, so you’re in full control, but you might pay higher fees, and the interface might not be as user-friendly.

4/12 Wallets :
– Hot Wallets: Like MetaMask or Trust Wallet—they’re connected to the internet and great for quick trades, but if they get hacked or your system has a virus, your keys might get exposed.
– Cold Wallets: Like Ledger Nano or Trezor—they’re offline and keep your private keys secure, making them perfect for long-term holding.

5/12  HODL Strategy
This term is just “hold” and means buying fundamental cryptocurrencies (like BTC, ETH) and keeping them long-term. It’s one of the most proven ways to profit in the crypto market.
 Reduces stress from daily fluctuations.
 Your capital gets locked up, and there are broader market risks.

6/12  Swing Trading
You need solid technical knowledge for this trading method—it’s more stressful than holding.
– Technical analysis for support/resistance levels.
– Tools: Candlestick charts, RSI, MACD, Bollinger Bands.
– Tips: Set stop-loss and take-profit levels, aim for a reward-to-risk ratio of at least 1:2.

7/12  Day Trading
In this method, the trader spends hours in front of charts, possibly opening and closing several trades in a single day, so it requires a high level of skill.
– Open and close positions within the same day.
– Needs: High-speed internet, chart interpretation skills, and staying updated with news.
– Very high risk; best suited for professionals.

8/12  Arbitrage
This method involves taking advantage of price differences between two or more exchanges—buying on the cheaper one and selling on the more expensive one. It also requires expertise and knowledge.
 Challenges: Small price differences, transfer fees, and settlement times.