Types of Crypto Trading

What is Cryptocurrency? 

Cryptocurrency is digital money that runs on blockchain technology and is decentralized, has no authority, and is not controlled by anyone. Transactions are carried out anonymously and are recorded and secured using blockchain technology, which is similar to a bank ledger. Some of the famous cryptocurrencies are Bitcoin, Ethereum, Solana, Binance Coin, Dogecoin etc. You can use cryptocurrencies to buy goods and services, although many people invest in cryptocurrencies as they do other assets, such as stocks or precious metals. Even though they cannot be physically seen or touched, Cryptocurrencies have value. Cryptocurrencies can be stored in 'digital wallets' on smartphones, computers. Web, and cold wallets.

Types of Crypto Trading
Before entering the world of crypto trading, we must first get to know the types of crypto trading available on exchanges today. so that we will not be wrong to choose the type of trade we want. Here are some types of crypto trading that we often encounter in the crypto market, including:

Spot Trading
Spot trading is a direct process of buying and selling cryptocurrencies, based on the current market price, generally using fiat money (USD). Spot trading is not much different from buying and selling transactions in the goods market, and we will directly own the goods, or get money if we sell goods. So that Spot trading in crypto trading is a basic trade that must be mastered by crypto traders. Spot price is the current market price or also known as Cash Market because traders make payments before executing transactions. On crypto exchange platforms, traders will use Market Orders, traders can buy, sell or just swap crypto. Through crypto exchanges traders can also trade directly with other traders, which is called Over the counter (OTC). 

How Spot Trading Works
How Spot Trading Works The way spot trading works is very simple, easy and fast, we only need to enter a crypto exchange and when the price is corrected we buy the crypto we want, for example BTC, we can use fiat money or stablecoin, then we store it on the exchange not withdrawn to a personal wallet (for avoid transaction fees), Then when the price of the crypto goes up we sell it to USD or to Stablecoins. Profit is the difference between the selling price minus the purchase price.

Trading Margins
Margin Trading is a type of crypto trading where traders can obtain capital loans from third parties or from brokers, thus providing the opportunity to earn greater profits and risks.
How Margin Trading Works
Before opening margin trading, traders must deposit initial funds or initial margin, and must also have a maintenance margin that is useful for maintaining positions.

Leverage
In simple language, Leverage is the amount of debt that will be used as additional crypto trading capital, so it is expected to increase profits. The money or capital you invest is called margin, while the amount of money/capital you borrow is called Leverage. In crypto trading Leverage is displayed in the form of a comparison eg 1:10 1:25 1:50 1:100 etc. meaning that your capital will be multiplied by leverage, for example 1:10, if you need $1,000 of capital to open a long position, then you only need $100 of capital.

Peer-to-Peer Trading
The P2P network allows verified buyers and sellers to transact crypto directly, eliminating the involvement of third parties. If there is a seller who offers a crypto (eg Btc) at a predetermined price then there are buyers who are interested and contact the seller. It often happens in Peer to Peer trading that crypto prices are below the market price by around 1-15%. P2P trading will benefit buyers as they can buy crypto at below market prices from all over the world.

Copy Trading
Copy trading is one of the services provided by crypto exchange platforms, novice traders will copy the positions of expert traders, by linking accounts owned by novice traders. Expert traders will ask the copy trader a commission from 1% to 50% of the copy trader's earnings. If the copy trader has linked their account with the expert trader then any position action taken by the expert trader will be automatically copied to the copy trader's account. No expert trader always makes a profit, therefore if a copy trader sees a decrease in profits in an expert trader, then don't hesitate to take cut loss action.

Crypto Futures Trading
Future Trading Crypto is a derivative instrument, namely cryptocurrency trading with a futures agreement to buy/sell crypto at some point in the future and the price has been determined in the contract. Futures trading is mostly used by professional traders for both long and short positions. Future trading focuses more on price speculation in the future, Buyers take long positions hoping the price will rise in the future, while sellers take short positions if they anticipate a price decline. At the expiration or expiration date of the contract, both the seller and the buyer conclude the contract, and the contract is closed.