Trading.
Trading an asset is a pretty simple concept, buy an asset at a lower price and sell the same asset at a higher price...making a profit from the difference in prices.
Here is a brief overview of the tools that I use to trade financial assets (crypto, equities, etc…).
What knowledge do you need?
- Math - You're trading numbers, math should be a basic skill set.
- Coding - this skill is not essential, but it helps, like for reading protocol code...it also helps if you want to use something as simple as Excel, or as complicated as coding your own trading algorithm.
- Economics/Finance - Bull and Bear markets greatly depend on the state of the economy. Having a little understanding of how central banks, debt cycles, cryptoeconomic protocols, capital markets, etc...function helps you gauge the state of the economy and how you trade.
- Fundamental analysis- How well a company or crypto protocol is doing financially? Are people using it? Is it useful? What is the competency of the devs or management? Etc...
- Technical analysis - Using historical data (with charts) to predict future price movements. Such as moving averages, support and resistance zones, volume and momentum, volatility, candlestick analysis, etc...
You don't need a PhD in any of this, just a healthy understanding.
What things do you need to trade?
- Fiat or Crypto - need money to make money.
- A reliable computer or tablet - something with enough processing power and a large enough monitor to do proper technical analysis (charts).
- A Trading Plan - A plan of what to buy, what price to buy it, what price to sell it.
- A Trading Platform - a crypto or legacy exchange (preferably with high liquidity)...sometimes they provide technical analysis tools.
- A “No No” list - A list of things that you shouldn't do; like leveraging trades (debt is bad), listening to the news, or listening to a whole lot of people's opinions (do your own homework).
- Patience - Sticking to your trading plan and having patience (don't get scared into or out of a position) is an important skill set and it has saved me more times than not.
I wrote this a while back. It doesn't necessarily get you started in trading, but these are some lessons that I've learned.
In Conclusion.
Trading is about knowledge, patience and discipline. It is also about mitigating risk of loss...by using a number of techniques, like trailing stops.
If you want to get into trading, maybe do some mock trading first (trade without using real money). This will give you some practice before jumping into shark infested waters. Oh yeah, if you make money, don’t forget to pay your taxes.
Below is a good place to get you started. I wish yall the best of luck :)
https://www.investopedia.com/trading-skills-and-essentials-4689654
Stay frosty people.