Cryptocurrency - A Trader's Handbook: A Complete Guide On How To Trade Bitcoin And Altcoins by Marvin Neuefeind & Marcin Kacperczyk

Author:Marvin Neuefeind & Marcin Kacperczyk [Neuefeind, Marvin]
Language: eng
Format: epub
Published: 2018-05-20T04:00:00+00:00

Trading pairs

Each coin has its trading pair, sometimes few of them. Most currencies on the market are trading with BTC pairs – to buy them you first need to own part of Bitcoin. That makes them strictly correlated with Bitcoin so even if their price does not move, they can still gain or lose in USD value.

(Let’s say we have a coin Tron that is worth 1000 satoshis. With BTC at 10k, it would translate to 0,01$ per coin (as 1000 satoshis equal 0.000001 BTC). Tron can gain or lose value in 2 ways – when it changes its BTC value and when Bitcoin changes its price. Let us present it by showing examples.

Tron stays at 1000 sat, but Bitcoin gained 2k, so it is now worth 12k. Tron despite staying on the same level is now worth 0,012$.

Tron gained 50% with Bitcoin still at 10k. Tron is now worth 1500 sats, which translates into 0,015$ per coin.

Tron gained 50%, but Bitcoin’s value decreased by 50%. Tron is now worth 1500 sats and Bitcoin is worth 5k. This, despite the significant growth from the Tron, puts the coin at 0,0075$ price.)

More and more currencies are currently being given few different pairs as well (ETH pairs, USDT (Tether) pairs etc.) but still a clear majority is highly correlated with Bitcoin. Until exchanges provide more USD pairs for the coins, all investors should always be aware of the BTC movements while trading their altcoins, as that affects them as well. When Bitcoin is very volatile, usually the whole market experiences significant drawbacks. Keep that in mind while trading and always look at Bitcoin chart in addition to the coin of your interest.

The general rule to picking a correct pair to chart would be to always go by the one with the biggest volume. Charts, in general, are more reliable when there is more liquidity in the market; therefore, you should be charting the most reliable pairing. This, however, does not mean that you should entirely dismiss the other pairs. Every chart shows a new perspective that should be taken into consideration.

(Even if a coin does not have an official USD/USDT pair, it is still worth charting the generated one (TradingView enables that option). As the chart is the reflection of the emotions and a lot of people trade based on USD value, this serves as the additional perspective. Indecisiveness on the BTC chart might be explained easier with a breakout incoming on the USD chart. In the case when a coin has BTC and USD pairs in high volume, look at both of them but trade the one that interests you more (accumulating more BTC or USD).)

Download

Copyright Disclaimer:
This site does not store any files on its server. We only index and link to content provided by other sites. Please contact the content providers to delete copyright contents if any and email us, we'll remove relevant links or contents immediately.