A Crypto trading: is the buying and selling of cryptocurrencies from the centralized or decentralized exchanges.

SPOT TRADING A Crypto trading: is the buying and selling of cryptocurrencies from the centralized or decentralized exchanges.

A Crypto trading: is the buying and selling of cryptocurrencies from the centralized or decentralized exchanges.A Crypto trading: is the buying and selling of cryptocurrencies from the centralized or decentralized exchanges.

 The goal is to take advantage of the price difference of these assets due to price volatility while making profit. 

One can be an intra-day trader/Scalper (trading within minutes to 4 hours), day trader (trading within 1 hour to 24hours) and long term / Swing trader (trading within 1 day to 1 month and above). 

Spot Trading: 

According to Coinmarketcap, Spot trading in cryptocurrency is a continuous process of buying and selling tokens/coins at a spot price for immediate/on the spot settlement. 

In this trading method, individuals use lower time frames and make more profit through several yet small trades.

Many crypto exchanges provide you with various options to buy and sell coins whenever you want. 

The coins with high liquidity have a higher trading volume on popular exchanges than the others.

 What Is a Spot Market 

A spot market in cryptocurrency is a platform, particularly available on exchanges, where you can perform real-time trades (trade on the spot) with other users. 

Transactions are efficiently settled and orders are filled in a timely manner. 

As a buyer, you can trade multiple currencies in specific pairs (like BTC, ETH, BNB or even FIAT).

 The spot markets have three major components: sellers, buyers, and an order book. 

Spot markets exist in different forms, such as over-the-counter trades (OTC) and third-party exchanges. 

Notably, over-the-counter trades involve only sellers and buyers with no interference from brokers. 

In contrast, third-party exchanges work as brokers or intermediaries between sellers and buyers, e.g Binance. 

 Benefits of Spot Trading 

1. Spot trading provides you with a negotiation facility. Both buyers and sellers can negotiate the prices to benefit themselves.

2. Prospects of generating profit are comparatively higher in spot trading

3. It opens gates to day trading where you can buy and sell your crypto tokens rapidly to make small profits.

4. It facilitates buying tokens at low rates to sell them at higher prices, ensuring a balanced profit-making process.

5. As spot trading involves on-the-spot dealings, it ensures transparency

6. There is no barrier to entry. Small and big investors have equal chance in the market.

7. Crypto tokens can easily be traded against each other and FIAT, allowing traders to make instant transactions

Note: 

It is highly advised to trade with caution and only invest the amount that you can afford to lose. 

Also, select a reliable exchange that offers you maximum liquidity and security.

 What Is An Order Book? 

An order book is an electronic documentation of an asset’s that shows you the buy and sell activity of an asset on a trading platform such as a cryptocurrency exchange. 

It’s usually represented by figures of an asset set prices that buyers are willing to buy (bid price) and sellers are willing to sell (ask price) represented in green and red colours charts respectively.

There are two types of orders; limit and market order. 

 Limit order: these orders set to be fulfilled using a trader’s specific prices. 

While market orders are orders set by the trader to be fulfilled at the current/prevailing market prices. 

Highest bid prices and lowest ask prices appear at the top of the order book. 

The difference between these two prices is referred to as the bid-ask spread. It indicates the supply and demand strength.

 Trading strategies 

1.  Scalping: This is a short-term trading strategy that a trader adopts to make frequent small profits from small price movement each day usually within a 5-15 minutes timeframe or sometimes even within seconds. 

Scalping is usually done with a very volatile coin pair but it comes with a great deal of perseverance and understanding of the market.

2.  Day traders: Trades within a 4-hour timeframe to 24 hrs (1day) timeframe. 

They focus on short time price movements though it could be time consuming.

3.  Swing trading:

 This is short-term to medium-term strategy where a trader takes advantage of price movement within this timeframe. 

Traders here keep their price position on 1 day to several weeks to catch the price swing. 

This is more prevalent and profitable during a strong uptrend, within a higher timeframe and within a resistance/support.

 Don’t swing trade in a consolidation market. A good understanding of resistance and support and other indicators are needed here.

 How to trade spot on Binance as an example

1. Sign up with Binance

2. Fund your account via p2p or otherwise using stable coins (Usdt, Busd)

3. Select coin pair of choice to trade in the market or trade section based on your research.

4. Decide order type and place your trade

Conclusion: Don’t forget to do your thorough analysis before placing trades and always trade only with what you can afford to lose.