Trading the Zero-Sum Game!

What you mean by Zero-Sum game?

A zero-sum game is a concept where both the losses and the gains are equally balanced.  This means that the total amount of gains are added up and the total amount of losses are subtracted of the total amount of gains, by doing that we will always get back to Zero. Now the beauty of this game is that if there is a buyer out there that is willing to pay more than what you have paid then you will make yourself a profit.

Small example:

Jim buys 1 Steem for 100 Satoshi

Jim puts up a Sell Order for 1 Steem at the price of 150 Satoshi (Jim will make 50% profit if he sells)

Jack buys 1 Steem for 150 Satoshi from the sell order that Jim has placed on the exchange.

Imagine if Steem drops back to 100 Satoshi again right after Jack buys it, now he's at a loss. Jack will need to wait for Steem to rise above 150 Satoshi in order to make a profit.

The price starts rising again and it's back at 150 Satoshi.

Jack gets a bit scared and wants out so he puts up a Sell Order for 155 Satoshi

Frank buys 1 Steem for 155 Satoshi therefore Jack's Sell Order just got filled.

Now Frank is the loser and Jack made a profit of 5  Satoshi. 

For every winner there is always a loser, that's how the Zero-Sum game works. So at some point there is not a buyer who is willing to pay more than what you paid and therefore you're stuck, remember what happened in 2013 in Bitcoin and people bought it for $1000 and guess what they got stuck on the top because no one was willing to pay more for it. Then what happened is it collapsed and fell down. Those people could've just sat on their coins and waited, however most people will panic and lose money.

What can I do to take the least amount of risk?

If a coin is still really cheap let's say 30 Satoshi and their total circulation of coins is not immense and you think the coin has potential then buy it, because remember the 30 Satoshi if it just goes up to 40 Satoshi you're already in profit, a little over 9% actually. The worst that can happen is that it goes lower than the 30 Satoshi.

Why is a price of a coin going up?

This is due to supply & demand of the coin in question. This can happen due to multiple reasons such as:

• Fundamental Analysis
• Technical Analysis
• Sentimental Analysis

What is the difference between the three?

Fundamental Analysis is a fundamental change in the coin such as a new feature that the coin developed or perhaps a new website. Or even a new developer on the coins team. Something that changes the coin overall.

Technical Analysis is what drives the market the most, markets move 80% based on Technical Analysis. it happens by people reading the chart and acting upon it. It's reading people's behavior in the market by reading the candlesticks on the chart and learning about technical terms like Fibonacci, Elliott Wave, Flags, Wedges etc. certain patterns have a high probability of moving a certain direction.

Sentimental Analysis is how people feel about a coin, for example not long ago we had Dennis Rodman who wear some Potcoin clothing and due to him doing that Potcoin flew up. It's because people could relate to Dennis Rodman and followed him and jumped in on the Potcoin train.

Now of course when Fundamental or Sentimental Analysis happens then Technical Analysis is always there, hence the 80%. Because people will jump in based on retracements of a certain percentage or perhaps a bull flag. All of this is Technical Analysis again and it will always form.