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### <div class="phishy"><center>Hello Everyone</center></div>
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Back again with me @chairulrizalx and [Week 6](https://steemit.com/hive-108451/@steemitblog/steemit-crypto-academy-update-october-11th-2021-season-4-week-6-courses) of [Steemit Crypto Academy Season 4](https://steemit.com/trending/hive-108451) has started and this time Professor @reminiscence01 and @lenonmc21 are mentors on this homework assignment. In this post, I will follow the homework given by Professor @reminiscence01 which discusses **Trading Cryptocurrencies** - [Steemit Crypto Academy Season 4 Week 6 - Beginner's Course | Trading Cryptocurrencies.](https://steemit.com/hive-108451/@reminiscence01/steemit-crypto-academy-season-4-week-6-beginner-s-course-or-trading-cryptocurrencies)
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<div class="phishy"><center>Hopefully this assignment will be a useful lesson for all of us.</center></div>
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### <div class="phishy"><center>Introduction</center></div>
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Today's *technological and economic* developments require us to continue to hone our skills as a provision to face the future in the era of the industrial revolution. Investments that used to only have a few options have now increased with the emergence of cryptocurrencies and other digital assets, for those who have been associated with **stock trading** for a long time may already know the terms commonly used as indicators or tools needed to trade on the market. In this discussion, I will explain ***Spot Trading, Margin Trading, Futures Trading***, and also the **advantages and disadvantages**.
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### <div class="phishy"><center>1). Explain the following stating its advantages and disadvantages: Spot trading, Margin trading, and Futures trading</center></div>
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For *beginners* in the world of **cryptocurrencies** and just trying to trade, it is generally easier to use Spot Trading because it is included in the basic investment, besides that spot trading can also be understood while learning related things in it.
<div class="phishy"><center>1). Spot Trading</center></div>
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***Spot trading*** is a place to make the process of buying or selling a digital asset directly at the current time. In spot trading, traders who want to buy a crypto asset are required to place an order right away and not order to buy it at another time. <center>https://cdn.steemitimages.com/DQmccZ3kXFEDtcbVSihXMXt9F5r3kBDZsqgif7bKtK4gcYL/1.png <sup>Example of Spot Trading - Screenshot from Poloniex Exchange [source](https://poloniex.com/exchange/)</sup></center> **Spot Trading** can also be used by beginners who are just starting to buy certain digital assets because of the user-friendly features and interface on many exchange platforms, using **spot trading** is a simple way of buying/selling digital assets. Buying digital/crypto assets when prices are low, holding them for a while, and selling them when prices are high is an easy way to trade using Spot Trading.
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<div class="phishy"><center>Advantages Spot Trading</center></div>
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- *Immediate liquidity in spot trading of cryptocurrencies or other digital assets due to instantaneous transactions that occur between buyers and sellers.*
- *Investors/traders can control digital assets to be bought or sold without the intervention of other parties.*
- *Easy to use by novice traders and also the required capital is relatively suitable for all circles.*
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<div class="phishy"><center>Disadvantages Spot Trading</center></div>
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- *The price of cryptocurrencies or digital assets is very volatile, some risks are not accounted for by the exchange platform if the trader suffers a loss*.
- *Transactions on certain digital assets will incur additional fees, consider when making transactions so that the additional costs are not more expensive than the profit generated*.
- *Spot trading is not effective for long-term investments due to fluctuating prices and there is also no guarantee of capital maintenance for the future*.
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<div class="phishy"><center>2). Margin Trading</center></div>
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***Margin Trading*** is a trading process that borrows capital with a certain value on cryptocurrency exchange platforms *(Poloniex, Binance, etc.)* as borrowed funds in order to achieve a higher profit. When trading cryptocurrencies, we generally use our own capital to buy digital assets according to the capital we have, in contrast to **Margin Trading** where traders can borrow a certain amount of capital as aid funds to multiply the profits from the number of funds used in trading.
<center>https://cdn.steemitimages.com/DQmfT1B397kJgTbUYneuU9b6Ngo5JAPTVnEiMyfTfZxUrDn/2.png <sup>Example of Margin Trading - Screenshot from Poloniex Exchange [source](https://poloniex.com/marginTrading)</sup></center> Using **Margin Trading** to make investments is indeed very tempting because of the benefits that will be obtained but this method is not highly recommended because the greater the leverage chosen, the bigger risk of losing.
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<div class="phishy"><center>Advantages Margin Trading</center></div>
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- *As additional capital for traders who have limited funds to get a bigger profit*.
- *Traders can get multiple profits if they use margin trading correctly*.
- *Margin Trading has many platform options as it is already available on many cryptocurrency exchange platforms*.
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<div class="phishy"><center>Disadvantages Margin Trading</center></div>
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- *The bigger leverage used, the higher the risk of loss. Margin Trading is not recommended for novice traders*.
- *Liquidation of assets in case of violation of the agreement, if the trader does not fulfill the agreement with the exchange when using Margin Trading, the exchange will liquidate the trader's assets which will be very detrimental to the trader*.
- *Margin trading can only be used by experienced traders because of the high risk, beginners are not recommended*.
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<div class="phishy"><center>3). Futures Trading</center></div>
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A long-term investment is a form of capital maintenance that can be used as savings in the future, along with the development of technology options for saving are increasingly varied, one of which is **Futures Trading**.
<center>https://cdn.steemitimages.com/DQmQ5wajGTzTzLsn3qAPzNG5gt6b75miYrygwqyM3XtW5hz/3.PNG <sup>Example of Futures Trading - Screenshot from Poloniex Exchange [source](https://poloniex.com/futures/trade/index/BTCUSDTPERP)</sup></center> ***Futures Trading*** works using a *margin system*, generally, we know futures trading such as *gold* and *stock* from a company which now has been made digital following the times so that the current generation can use it as an asset for the future. As a type of instrument, futures trading also details the quantity and quality of the asset being sold. Futures Trading is not suitable for novice traders who want to make profits in a short time because "Futures" by its meaning is long term.
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<div class="phishy"><center>Advantages Futures Trading</center></div>
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- *Futures Trading can be done with small capital as savings for the future*.
- *Futures Trading can be done at any time because it is flexible, can be adjusted as needed for future savings*.
- *Futures Trading is already available on many digital platforms, it is also an investment platform suitable for the millennial generation by using the latest technology to find related information*.
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<div class="phishy"><center>Disadvantages Futures Trading</center></div>
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- *Futures trading in my opinion is not suitable for beginners who are just starting to trade and hope for short-term profits.*
- *Futures trading is uncertain and like betting because futures trading can change over time.*
- *Futures trading requires good market analysis knowledge and if you can't, you will get big losses.*
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### <div class="phishy"><center>2b). How can a trader manage risk using an OCO order ? (technical example).</center></div>
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Using **OCO** when trading is not too difficult if the trader can read market movements and set prices according to market conditions. **OCO** provides a limit that can be determined to get Profit, then there is a Stop-Limit which is the price to avoid the risk of unexpected losses.
When the price of the selected digital asset reaches the Limit Order price, it will be executed because it was sold at the price set in the **Limit Order**, the price at the **Stop-Limit** will be canceled by the system automatically because the market price does not match the Stop-Limit price. By analyzing market prices carefully and setting **Limit Order** and **Stop Limit** prices according to market conditions, you will minimize the risk when using **OCO** when market prices are experiencing *high volatility*.
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<div class="pull-left">https://cdn.steemitimages.com/DQmVAYt2rFmQ1Ls2a5UUSf1M8BHR6XHEsNSzaQ2aQRvNCtv/5.png</div> The image on the left shows me using the <strong>Binance</strong> exchange platform to trade crypto assets on the Cardano (ADA)/USDT (Tether) market. By using the <strong>OCO (One Cancel the Other Order)</strong> feature I set a Limit price of <strong>2.300</strong>, at the <strong>Stop-Limit</strong> price I set <strong>2.21</strong> if the <strong>Stop</strong> price is <strong>2.220</strong>.
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### <div class="phishy"> <center>3). Open a limit order on any crypto asset with a minimum of 5 USDT and explain the steps followed. (Screenshots needed).</center> </div>
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- I made cryptocurrency transactions using the [Indodax](https://indodax.com/) exchange platform. **Log in** to your https://indodax.com/ account by entering your **username, password, click to verify, and click Enter**.
<center>https://cdn.steemitimages.com/DQmP39jqrQRGXHQLxc2raDHbXzgxFxFuxBYfK5nsjrTNgyj/0.PNG
<sup>[source](https://indodax.com/)</sup></center>
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- On the **Indodax** dashboard page, I select the **USDT** market and I will place an order on the **BTT/USDT** market. More details can be seen in the image below:
<center>https://cdn.steemitimages.com/DQmYC7xA4FLkvB1ARtzXg4XMp6V3XFQwFdkJrg3JuoEsowt/1.PNG <sup>[source](https://indodax.com/)</sup></center>
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- After entering the **BTT/USDT** market, it displays **BTT** price chart information, **last price, highest price, and lowest price**. In addition, we can also make **BTT Deposits/Withdraws**.
<center>https://cdn.steemitimages.com/DQmcnqPiGmxqhSXDecR6Vtu8zeeXmyCGKBkUkhsoD49aj8w/2.PNG <sup>[source](https://indodax.com/)</sup></center>
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- If we scroll down there will be a **Buy** and **Sell** menu. Here I will buy **BTT** using **USDT** which I have as much as **7.87**, the **Pending Order** column still looks empty because I have not made a **BTT/USDT** transaction. <center>https://cdn.steemitimages.com/DQmZQg2MXTU4jN5MoJAsd9hwbjkArKKbKxohogK24xdaYQJ/3.PNG <sup>[source](https://indodax.com/)</sup></center>
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- I made a **BTT** purchase with a **Limit Order** at **0.003732** where the price is below the last price. I bought **2103,34696078 BTT** using **USDT**, then I chose to **Continue**.
<center>https://cdn.steemitimages.com/DQmfTn5DvWaUJB4VVdXrfocwa4kYEHryDWTPevaftoGYgtD/4.PNG <sup>[source](https://indodax.com/)</sup></center>
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<div class="pull-right">https://cdn.steemitimages.com/DQmX6sjTke4hTT2wnZRU1S3kWGxmCGekrxPnFPf5boiv99t/5.PNG</div> The picture beside shows the transaction that I will make on the <strong>BTT/USDT</strong> market, when I make a purchase <strong>BTT</strong> will be charged a <strong>Fee of 0.02354907 USDT</strong>. If you agree, confirm by clicking <strong>Continue</strong>.
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<div class="pull-right">https://cdn.steemitimages.com/DQmWEbtXfjj5aVkcsa85wCuHqF5iMg5CNPoTHc6dKDaXPVx/6.PNG</div> The following is a picture of the results of a successful transaction.
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- Previously executed transactions will appear in the **Pending Order** column, and after the transaction is completed it will appear in the **history list**.
<center>https://cdn.steemitimages.com/DQmedYEJDnCMxoEzUq7xviu9GGn1GayvBJococ6Aus95v56/7.PNG <sup>Pending Order Menu [source](https://indodax.com/market/BTTUSDT)</sup></center> <center>https://cdn.steemitimages.com/DQmQwcmqSMMNtGQvywHnESkdzEkJWFCuhLDuRXSZxx7pDdu/9.PNG <sup>Transaction History [source](https://indodax.com/market/BTTUSDT)</sup></center>
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### <div class="phishy"><center>4). Using a demo account of any trading platform, carry out a technical analysis using any indicator and open a buy/sell position on any crypto asset.</center></div>
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I made a trade using a demo account from the [TradingView](https://www.tradingview.com/) platform to place a **Sell Order** on the **BTC/USDT** market and used the **RSI (Relative Strength Index)** technical analysis indicator.
The reason I chose the **BTC/USDT** market is that for a *beginner* like me who is still learning the basics of trading using the **BTC/USDT** market it will be suitable, because the market is very familiar and **BTC** itself is one of the cryptocurrencies that have a lot of influence on other cryptocurrency markets, and **USDT** is a *stablecoin* that is suitable to be used to buy or sell other crypto assets because of its stable price range and is widely used by traders to make transactions.
**Relative Strength Index (RSI)** is a indicator that measures the magnitude of price changes in a period to analyze whether conditions in the crypto market have reached the point of **oversold** or **overbought**. The **RSI** indicator is suitable for beginners who are still learning to analyze the market, this indicator is used to identify **oversold** and **overbought** levels for an investment asset and can also be used as a **'signal'** of emerging trading opportunities.
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<center>https://cdn.steemitimages.com/DQmWJAgcKstGfrzLTFoyL1F3vBPErjvGkzxnZBUaCh5gvrP/1.PNG <sup>Screenshot from TradingView [source](https://www.tradingview.com/chart/4p2O1THc/?symbol=BINANCE%3ABTTUSDT)</sup></center> The picture above shows the **BTC/USDT** market price which is experiencing a **Bearish** trend, using the **RSI** analysis indicator to show an **Overbought** signal. The **RSI 10** indicator that I use shows a **close** of **76.45** which is very suitable for making **Sell Orders** to get profit, because the trend is **Bearish** I immediately determine the **exit point** so as not to fail profit when the trend turns to **Bullish**.
<center>https://cdn.steemitimages.com/DQmbEQ9ea9k1D7X8FYi6RsDLyLz4Zd3H9oPTRHDWsanRvd9/2.PNG <sup>Screenshot from TradingView [source](https://www.tradingview.com/chart/4p2O1THc/?symbol=BINANCE%3ABTTUSDT)</sup></center>
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### <div class="phishy"><center>Conclusion</center></div>
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Thank you for learning this time Professor @reminiscence01 about the basics of cryptocurrency trading, beginners in the world of crypto-asset trading must understand the functions and differences between **Spot Trading, Margin Trading, and Futures Trading** so that they are not mistaken when trading to avoid losses.
It is important to learn the basics of how to use the features on a cryptocurrency exchange platform and understand how **analytical indicators** work as a preparation to become a Professional trader so as not to be misguided.
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### <div class="phishy"><center>Thank You</center></div>
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