Cryptocuurency market volatility trading

Assalam-U- Alaikum

How are you all steemians? I hope you all steemians will be safe and sound by the grace of Allah Almighty and I'm fine too Alhamdulillah. Today I am here to share my thoughts and knowledge about the Cryptocuurency market volatility trading.

Cryptocuurency market volatility trading

Introduction

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The market of the cryptocuurency is familiar because of its utmost volatility, which relates to the speedy fluctuations that can occur within short time.

The volatility of the market is fundamentally operate by the factors like views of the market, bureaucratic news and the advancement in the technology and the economic affairs.

The dealers often view the volatility of the market as an occasion to profit because it can lead to the remarkable price movements in both directions such as the downward and upward.

Understanding volatility

The volatility is the computative measures of the dissipation of the returns for a given index of the market.In the circumstances of the cryptocurrencies, it specify that how much the price of a cryptocuurency can swap over a significant period of time.If the volatility of the cryptocuurency market is high it means that the price can fluctuate unexpectedly but if the volatility of the market is low it means that the prices are more stable.

Factors contribute to volatility

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• The consciousness, feelings and emotions of the traders can lead to the quick buying or selling of the cryptocuurency.The new events and trends on the social media, and the dominant figures can swing the market sentiment seriously.

• The changes in the government policies can create unreliability which can lead to fluctuations in the prices. For example, announcement related to the cryptocuurency banning or the acceptance can cause panic selling or buying of the cryptocuurency.

• The market of the cryptocuurency is young as compared to the other traditional market.If the market liquidity is lower then the price can be swing.

• Many traders in the world of the cryptocurrencies are the manipulators looking for brilliant profit instead of the long term This behaviour of the traders can contribute to the rapid price movements.

Strategies for volatility trading

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The various strategies are used by the traders to take advantage on the volatility of the market of the cryptocuurency.The day trading is that when the traders buy and sell all the cryptocuurency in a day. The meaning of this type of trading is that the traders make money by taking profit of the change in the prices that occurs during their trading.

In the swing trading the traders hold their coins for several days to take advantage from the expected movement of the prices.A high frequency strategy is named as the scalping trading. In this type of the trading strategy the traders make various short trades throughout the day to gain profit.

A type of the trading in which the traders make money between the different exchanges. In this type of the trading, Cryptocurrency is bought at a low price and then sold at a higher price.

Risk management in volatile markets

The consciousness, feelings and emotions of the traders can lead to the quick buying or selling of the cryptocuurency.The new events and trends on the social media, and the dominant figures can swing the market sentiment seriously.

It is very important to avoid emotional trading to reduce risks. A good trading plan can be helpful for the traders to gain profit.

Staying tuned with the new trends of the market will be helpful to take decision for the profit.It is very important to limit the potential losses, it will be possible only if the traders set stop loss orders.

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