In order to understand the nature of trading in general and cryptocurrency trading in particular, we have to plunge into some financial processes, which we are all a part of.

Since we all use the banking sector services, and not only spend or place our well-earned money on deposit, but dreaming of a cloudless future late in life, transfer some part of the income to retirement funds, social security, and pensions, we automatically become participants of the banking system and the stock market. We pay pension contributions throughout life, but few of us think about the very structure of the financial industry and how the state disposes of our future pension.

Unfortunately, the financial system in any country is built in such a way that we do not own our capital. The circular motion of loans and pension contributions makes money somewhat virtual as they are constantly slipping through fingers of the state, fund managers, and private corporations. At the same time, central banks in any state exercise emission monopoly in respect of currency, and this function is assigned to them by the state. Theoretically, the currency is secured with goods or products produced in the territory of a country. This is how its GDP is formed. At the same time, central banks commit themselves to maintain the reliability and stability of the national currency.

It seems that everything is clear and good, but the problem is that it is just an ideal picture. Reality, unfortunately, is somewhat different. The state and central banks fail to fulfill their obligations to ensure the stability of the currency, and the value of money itself disappears due to inflation and quantitative easing. "How did it disappear? We were not informed about it!" you may mention rightfully. I'll try to substantiate my statement.

The value of money, including pension savings, and, therefore, the stability of our future, looked more optimistic before 1976. Until that time, the pension system worked as follows: people deposited money to the Pension Fund, interest was accrued on deposits, and the state used those funds to make payments. But the so-called Jamaica Accords[1] changed the course of history somewhat.

It was decided to demonetize gold, and gold turned into an ordinary exchange commodity. Thus, all the agreements approved within the framework of the Jamaica Accords allowed the price of gold to float with respect to the U.S. dollar and other currencies. It was a kind of call for many countries to get rid of gold. The countries did not delay the relevant decision. A series of world countries decided to abandon this precious metal and not tie their national currency to the country's gold reserve.

I ask you to focus on this moment because since 1976 the credit system of each country has increased hundreds of thousands of times!

The Jamaica Accords turned money into figures. The system began to unify after the gold was abandoned, taking the form of huge unified bank accounts that are not backed up or guaranteed. As for the Pension Fund, it is no longer a kind of safe deposit box for your savings. It is a kind of hedge fund[2] that collects assets from you as an investor and then disposes of them at its discretion. Our pension funds became part of the state budget and started to be used for other government needs. Now the Pension Fund is a kind of bank account. If you analyze the pension system of the most developed world countries, you will find that pension funds are spent on other social needs. That's why pension deposits do not exist in an account somewhere.

Despite all these factors, the middle class has remained the driving force of the pension system, which is no longer supported by anything. Most people do not bother with how the Pension Fund disposes of money, so they keep replenishing its reserves. Like bees in a hive they bring honey to the system regularly, but do not get to use this honey.

Doesn’t it remind you of a pyramid? And I'm not talking about the pyramids in Egypt!

Let me mention that not only the pension system but the banking system as a whole, has the signs of this very pyramid scheme. All the participants in this system receive income only at the expense of inflow of "new blood", i.e., the receipt of new investments from new participants.

By the way, we’ve discussed the crisis of the financial system, but it should be noted that trading also experienced its hinge period. It is associated not with the Jamaica Accords in 1976, but with the global financial crisis of 2008. The crisis, as well as the availability of mobile systems and the prevalence of trading itself, stopped professional traders from earning exorbitant sums of money.

It is interesting that the crisis and the revolution in trading were organized by the world largest investment banks. Trying to deceive each other, they played a dishonest game, inventing various derivatives (promissory notes, bonds, etc.). Such products, invented by banks, began to confuse the situation in the market. The first wave of the fall hit the market in 1998, but then the situation was remedied. However, in 2008, even the reputation of a trader, who brings the whole system huge sums of money, could not prevent the market collapse and the start of a global economic crisis.

Thus, I believe that all the investment banks have discredited themselves as professional institutions that can be trusted to manage finances. That situation ended in real professional traders moving to hedge funds.

I believe it’s high time to draw the first parallel between conventional (fiat) money and cryptocurrency. As we remember, the decisions taken within the framework of the Jamaica Accords made the value of money decrease significantly, because the entire currency cycle began to be built only on the foundation of debts. On the contrary, the value of cryptocurrency keeps growing. Moreover, cryptocurrency is not subject to inflation, since creation of new coins comes from a predictable algorithm, not a central bank..

Thus, if we ponder over the pension issue in the context of the above mentioned information, we can draw the following conclusions:

●     You need to "mend your sails while the weather is fine", i.e., to think about a decent income in old age right now

●     You need to look for an alternative to a pension

Trading could be one of such alternatives to a pension. However, the overwhelming majority of people bypass this option of earnings, because they believe this type of activity requires being a financial genius and having an innate talent for trading. People stuff their heads with such definitions as "pattern", "analysis", "technical modeling", "configurations of candlesticks" and, therefore, choose other, simpler, so they think, earning options.

But I want to cheer you up: being on close terms with all the above-mentioned concepts is a myth. In order to be successful in trading, you need to master the basic concepts of trading and the principles at work on exchanges. You only have to understand the main mechanics of the market: who sells and how and who buys and how. But you do not have to reinvent the wheel. Everything needed is already known.

Therefore, embarking upon the “profession" of a trader requires mastering the basic principles of the market, finding out how to analyze (i.e., assess the current situation), and, as a result, make trade decisions.

At the same time, I want to dispel the hopes of those newcomers who have already prepared their wallets for super profits but are going to devote a couple of hours a week to this matter. To become successful, which means getting a good income, you will have to constantly upgrade yourself, keep abreast of new methods, follow experienced traders, read the market news, etc. Therefore, freeloading won't do here, friends!

At the same time, traders have to stay cool and focused. Let me remind you that the cryptocurrency market is very volatile, but in spite of this, traders must make forecasts on the best time for entering and leaving the market. And all these risky operations have to be repeated again and again. Therefore, emotional poise is one of the trader’s best friends. We will return to the psychology of a successful trader a couple more times.

Now let’s touch briefly on the actors of cryptocurrency market. It is necessary to distinguish between two types of traders: professional traders and retail traders. The first group includes those who have undergone special training and certification. As a rule, such people work in huge investment companies and speculate on the market with "tidy" sums of money. A retail trader carries out trading operations in the market without having a special license. Such people work for themselves and, as a rule, manage much smaller sums.

The downside of the work of professional traders is that they do not own the funds they manage. At the same time, professional traders punch a time clock, trying to survive in fierce competition. On the contrary, retail traders can make decisions at their discretion.

Since I consider my duty is not only to teach you but also to warn, I want to note that retail traders must always be ready to lose their capital as there is unspoken rule in the market called "90.90.90" which means that 90% of traders lose 90% of their capital in the first 90 days of work. All these lost funds do not dissolve. They stay in the market.

Understanding cryptocurrency market

Having dealt with all the pitfalls of banking and pension system, let's define: WHAT IS CRYPTOCURRENCY TRADING? I have three answers to this question for you:

●     It’s an opportunity to start to make money by investing in a cryptocurrency

●     It’s an opportunity to make a fortune in a short period of time

●     It’s a profitable instrument with little risk if traded correctly

My readers, knowing about my rich experience in this field, also often ask me the following questions:

●     Is it worth investing in cryptocurrency now?

●     Is it worth trading on the whole?

●     Why should we analyze cryptocurrency?

●     How do I invest without having experience?

●     Is it better to invest yourself or entrust this to professionals?

I'm sure that all these questions have crossed your mind, but let's first start with basic principles.

Cryptocurrency[3] is a kind of digital currency, the creation, and control over which is based on cryptographic methods. As a rule, cryptocurrency uses decentralized control, i.e., there are no regulatory bodies in this field. The decentralized control of each cryptocurrency works through distributed ledger technology, typically a blockchain[4]. Information about transactions is usually not encrypted and is available in the public domain. To ensure the continuity of the chain of transaction blocks, the elements of cryptography (digital signature based on a public key system) are used.

Now let me answer the question, why cryptocurrency is so important to me.

Cryptocurrency has remained the most profitable asset in recent years as well as the only asset a non-professional investor may use to increase their capital several-fold. You don’t need outstanding knowledge, useful social contacts or huge initial investments.

It’s a liberal and democratic asset which may boost your capital exponentially. That’s the most attractive point of cryptocurrency for me. I think you will agree.

But, the most frequently asked question is: how can we use the opportunities cryptocurrency opens before us? Back in 2017, it was a little easier to take advantage of those opportunities. Many people yielded huge results by just investing in different coins. But the year 2018 began with the steep fall of the cryptocurrency. People started to look for other ways of benefiting from cryptocurrency. Trading is one such way.

On the one hand, its advantages are independence from the market and high profitability. For example, many trading companies showed fascinating financial results by the end of 2017. But do not hope the path of trading is easy (as it may seem to someone), it is also not fast. Therefore, you must understand there is a huge number of shortcomings and risks in trading. And the biggest risk for an inexperienced investor is that the outcome of trading depends on a qualitative analysis of the market situation and the assets you are to buy. It’s difficult for a beginner. Although in 2017 the market still could be analyzed, now it is almost completely manipulative.

Some of you may wonder why analysis is so important in cryptocurrency trading. The analysis of cryptocurrency is needed to predict the behavior of a currency price in the market. It is the qualitative analysis that increases the probability of predicting the correct outcome of the transaction. If you were guessing would Bitcoin go up or down, say in the next two days, by tossing a coin, you would guess the right outcome only in 50% of cases. It is impossible to make a fortune this way. The analysis is needed to improve the quality of our guesses.

What do we want to guess?

●     Entry point

●     Take profit

●     Stop loss (a limiter of losses that allows minimizing your losses and closing position if something goes wrong).

Now let’s discuss it in more details.

What is an entry point? It’s a cryptocurrency price at which we open a position. It is at this point where there are chances for the price to move in the forecast direction.

Take profit is the price at which we close the position with a profit. If everything goes according to plan, we are ready to say "Enough" at this point.

Stop loss is the level of "cutting off" losses is the price at which we will liquidate the position at a loss in case of an unfavorable change in price. For example, we expect a price to rise from 100 to 200, but it rises to 105 and then falls down. To avoid such situations, we set a price at which we want to liquidate the position if our forecast happens to be wrong.

To "guess" correctly more often, we apply three types of analysis:

●     Fundamental

●     Technical

●     Computer

However, the types of analysis are one link in a chain. There is a need to understand the basic principles of market functioning. After all, if you don’t have a clue about the internal mechanism of a car, you will not learn how to drive properly.

Therefore, to understand the cryptocurrency market, you need to know:

●     Principles of cryptocurrency market monitoring

●     The emergence of the cryptocurrency market, reasons for its success

●     Forecast and development prospects

●     Services and sites for traders

●     Exchanges for trading

●     Complete trading algorithm

We will deal with all of these issues in this book.

Psychology of the game

I'm ready to throw you a curve-ball again (here imagine broad laugh like in horror movies:)

So, if you think that having studied the market, the principles of fundamental and technical analysis you will become a successful trader, I will disappoint you - it is not enough.

You have forgotten about one very important aspect. To succeed in trading, you also need to understand the psychology of the game in the cryptocurrency market. Moreover, it is necessary to distinguish between the psychology of the game of crowd and the psychology of the game of market participants with large capital.

When working in mass speculative markets, an individual trader faces the following risks:

●     Decisions of the crowd are made at the level of its most stupid member. So, the decisions taken by the crowd are not smart

●     Rumors often control the crowd, and rumors tend not to be justified

●     A person tends to be influenced by the crowd and make collective, non-individual decisions.

Therefore, to avoid such risks, you need to learn how to differentiate your individual transactions from the transactions you make following the example of the crowd. You need to try to become a kind of psychologist and feel the moment when your emotions could harm trading.

What emotions am I talking about?

The first emotion is greed.

Greed usually follows a sense of euphoria. It’s a consequence of a certain experience. Let's say, you have got a very good interest on your deposit for the first time, so you fly into a passion. Subsequently, you make another bet - and you are lucky again. After that, take my word for it, you won’t listen to anyone. You will treat any sound idea in your environment about a need to stop an absolute delirium. And why? Because you have started to feel greedy!

And how does greed manifest itself in the cryptocurrency market? Many traders hope to buy currency at the lowest price and sell at the highest, i.e., they do not look for a point to lock their profits but keep a coin, hoping its price will grow endlessly.

Tip: if you have an opportunity to close a deal and reap a benefit now, you’d better do it rather than hoping for luck and keep waiting.

The second emotion is hope and expectation.

After you fell into a trap of greed, you start to feel hope and expectation.

In particular, those people who have come to the market with confidence that here they will earn millions of dollars hope that things will work out for them in the long run with little effort. Unfortunately, it is not as simple as it seems at first glance. To make money here, you will have to work your tail off.

When do hope and expectation appear in the cryptocurrency market? When you hope without any grounds and await a price reverse.

Tip: you need to understand why price should reverse (using all kinds of analysis), rather than hope and wait.

The third emotion is fear.

In most cases, this emotion arises from ignorance or misunderstanding what should be expected. For example, you are afraid of the dark, but if truth be told, you are afraid of not knowing what could hide in the dark. Therefore, the fear arises when you do not have answers to certain questions.

When does fear appear in the cryptocurrency market? It appears when the currency price begins to fall. And the lower the price falls, the greater the fear you feel.

What do traders do when they are seized with fear? Some continue making new purchases, using moving average strategy, while others close positions after the first decline. However, there is a third category of people: they do nothing except looking entranced at the chart.

Tip: there’s nothing worse than looking at the falling price. If you start to feel fear at a certain moment of trading and you make unplanned moves, determine the cause of fear and cut it off.

In order to open and close all positions "on schedule", be sure to keep a trader's diary. If you think it is easy to remember all the transactions and you don’t need a trader’s diary, you choose a far from professional approach towards trading which leads you to the repeated mistakes.

Therefore, when trading, you need to turn off your emotions as they will have an impact on your chart (technical analysis) in one way or another. Think not only as an analyst but as a psychologist as well. Identify emotions in the early stages and cut them off in time.

To understand the psychology of the market, you will also need to study some of its laws, a certain list of rules revealed in the market.

The law of chance. You never know what can happen the next moment, so always be ready for everything - both to large returns and losses. Therefore, take into account possible accidents when making your market calculations.

Sod's law. You can make perfect calculations and forecast and receive seemingly 100% confirmation, but someone changes the rules of the game when you make a deal. Never forget about such a probability. Be ready to change the rules of the game.

Law of optimism. People are inclined to exaggerate the chances of winning. This exaggeration can press you for making deals on the most unthinkable and the first offered prices. Sometimes your worst enemy is yourself!

The law of cause and effect. If you observe any movement, then try to find the reason that caused it. I highly recommend not making any deals without understanding what makes the price move one direction or another. There is no movement without a reason.

Whales in the world of crypto

You have probably heard that the cryptocurrency market is "inhabited" with hamsters, whales and many other species of animals. This may sound ridiculous, but it's true. Imagine the cryptocurrency market is the ocean. Consequently, the usual traders are small fish in it, the pumping groups are sharks and the largest asset owners are whales. The whales are believed to control the cryptocurrency market and be able to collapse it any moment. But is it so, and can ordinary investors (like us) benefit from the actions of whales? Let's see!

Who are the whales in the cryptocurrency market?

Whales are large players who own huge amounts of cryptocurrency and can manage the market by buying up and selling assets.

Such whales harbor even in the ordinary stock market, but they have many more opportunities in the cryptocurrency market:

●     Cryptocurrency market capitalization (about $300 billion) is much smaller, so it is much easier to accumulate a large number of coins in your hands than to try to become a whale in a conventional market (with a capitalization of $65 trillion)

●     Whales can manage large sums without feeling any pressure from banks and financial regulators, as there is no large-scale regulation despite the realities of tightening state control over cryptocurrency

●     The cryptocurrency market is still very young and operates according to the laws not typical in the traditional market. A cryptocurrency’s price is determined by demand, and large asset holders can manipulate it.

The main characteristic of whales is that they own large amounts of cryptocurrency and their main goal is to manage the price of this cryptocurrency for the sake of their own benefit. To this end, a coin should be very popular and in demand.

Every day, thousands of small fish (ordinary investors) pour their money into the common ocean, while whales are reaping their benefit. That is why the Bitcoin market is of particular interest for such whales.

Let's now sort out what kinds of whales live in the cryptocurrency market:

●     Early adopters of Bitcoin, who were first to mine or buy up huge amounts of coins and now have thousands or even tens of thousands of Bitcoin on their accounts

●     Wealthy investors, who managed to buy large amounts of Bitcoin in the early days of its popularity

●     Large investment and hedge funds

●     Large companies who can buy or mine a large number of coins to their own benefit (for example, cryptocurrency exchanges or producers of mining equipment).

According to the latest data, at the time of writing, about 80% of all mined Bitcoin belonged to 110 people. They are the whales who have real levers of influence on the market price of Bitcoin.

Here is a small list of the most famous Bitcoin whales:

●     Roger Ver (150,000 BTC)

●     Binance exchange (160,000 BTC)

●     Bitfinex exchange (190,000 BTC)

●     Bitmain company (350,000 BTC)

●     Winklevoss twins (450,000 BTC)

●     Bitcoin creator Satoshi Nakamoto (he is said to own a million coins).

If you think that only Bitcoin is concentrated in the hands of a narrow circle of whales, you are mistaken. The same is true for other types of cryptocurrency. For example, 40% of all Ethereum coins are located in top 100 crypto wallets of this coin. With cryptocurrencies Qtum, Gnosis, and Storj, this figure reaches 90%.

Bitcoin whales are the most influential in the market because bitcoin has the highest capitalization and market value of any coin.

Despite all these facts, I hear almost daily the exclamations of skeptics that no whales exist, and a small group of people cannot manage the price of cryptocurrency. But the facts remain facts and speak for themselves. People with a colossal amount of cryptocurrency in their wallets can manage the whole market.

So which strategies do whales use in the cryptocurrency market?

I’ll highlight several strategies whales use in the cryptocurrency market.

Rinse and repeat. The main trick of this strategy is to reduce the price for a particular cryptocurrency as much as possible to be able to buy it at the lowest price a little bit later. Implementing this strategy is like taking candy from a baby: whale sells its assets on a massive scale at a price below the market one, and the ordinary small fish, scared by a cryptocurrency collapse, also starts to sell their assets. As a result, the price of cryptocurrency falls even lower, and then the whale buys coins at this fallen price. The large-scale purchase makes the price rise again, and the whale repeats its cycle.

Here is an example. A whale has 10,000 BTC. The current price is $6,000, and the whale sets orders to sell Bitcoin for $5,800. Suppose he "throws away" 6,000 BTC in the market. Having noticed this, ordinary traders decide that Bitcoin follows the downtrend or collapses. Accordingly, they start to get rid of their assets. If it becomes massive (that is what the whales are trying to achieve), the Bitcoin price may drop to $5,000 or even lower. In this case, the whale will return his 6,000 BTC, which he had previously sold, and would buy more coins at a reduced price.

And now let's count. The whale sold his 6,000 BTC for $34 million. If the price collapses to $5,000, he will be able to buy 7,000 BTC for this money. That is, his dirty profit will total $5 million. That’s just one "rinse" round, and the whale is interested in "rinsing" as many coins from ordinary traders as possible.

Spoofing. The main purpose of a whale in this strategy is to make other players believe in a collapse or growth of a particular cryptocurrency. To do this, the whale does not even need to throw away his own assets in the market as it’s enough to place large orders on the exchange and cancel them before they are executed. Moreover, this strategy involves both buy and sell orders.

In the first case, whale places an order to buy a large amount of cryptocurrency (for example, Bitcoin), thereby increasing the sell wall. Other traders see it and begin to buy Bitcoin massively, expecting a price hike. The whale waits until the price reaches its peak, cancels the order and sells part of its assets at an overvalued price.

In the second case, whale places an order to sell a large amount of Bitcoin at a price below the market value. Ordinary traders hit the panic button and dump their assets. The whale waits for the maximum price drop, cancels his order, and buys Bitcoin.

The main point of this strategy is to place orders that cannot be executed.

For example, if a whale sells 10,000 BTC at a low price, and the rest of the traders have enough money to buy them, the whale will simply lose his assets. If traders fail to buy out the entire amount, the rest of the players will either have to wait until the order is executed or reduce the sale price themselves. And that's playing into the whale's hand.

Over-the-counter game. Some experts believe that many whales in the cryptocurrency market trade assets in the over-the-counter (OTC) market. It’s a kind of black market where the whales can buy a huge amount of coins out of public view. Non-public trading is carried out in closed groups, through major OTC brokers or at the exchanges that offer so-called "private rates." The brokers, who offer their customers lower prices and work only with the largest players, are of particular interest to whales.

For example, well-known Circle and Cumberland over-the-counter brokers have restricted access for new entrants: $100,000 is the fee for entering the circle of favorites, $250,000 - for cryptocurrency trading.

Working through such brokers, whales can buy cryptocurrency from each other and even coordinate their actions. Having bought a large number of coins, they go to ordinary exchanges and influence the cryptocurrency price as they need.

It may seem that the whales are high-ranking pumpers. However, it’s not so. Pumpers raise the altcoin price suitable for Pump & Dump[5]. They kick up a fuss in the cryptocurrency community, manipulate news hooks, gather pump groups to purchase coins, and so on. Whales, however, sway the market towards the preferential price of an asset they hold. They also act together often, and the main target of most whales is Bitcoin. Little-known altcoins do not interest them.

How do the whales influence the cryptocurrency market?

Many investors believe that whales have a negative impact on the cryptocurrency market, depriving small players of their profits. Moreover, the cryptocurrency community has long discussed the conspiracy theories saying whales want to either collapse the entire market or to secure their own total control over it. Let's try to answer this question by analyzing the arguments of conspiracy theorists.

For example, here is one theory: whales are stocking up with Bitcoin to control the market after the mining era ends. According to calculations, all Bitcoin will be mined within 5-6 years, and the developers will have to transfer the network to PoS-mining[6], which means that the largest coin holders – the whales – will benefit the most from PoS rewards. Nowadays, many people claim that the Bitcoin collapse, which began in the winter of 2018, was triggered by whales. They are already preparing for PoS-mining and are doing everything they can to buy as many coins as possible. However, due to the collapse of the Bitcoin price, a huge number of users left, while many potential investors have not entered it, waiting for the next fall. Bitcoin started to follow a downward trend, and this affected not only the ordinary trader's pocket.

In fact, the whales need cryptocurrency to be popular and in demand with the largest possible number of players. After all, when whales’ assets fall in price, their portfolios also get cheaper. In the long run, it is unprofitable for them to collapse the cryptocurrency.

However, there are other opinions about the whales in the cryptocurrency market. Some say they are not a negative phenomenon. Such players exist in any market. They always set the vector of development and unite to lead the market. Therefore, whales, to some extent, even exert a positive influence on the market. After all, while they are interested in the cryptocurrency they hold, they are also interested in preventing the collapse.

Moreover, many whales (including Nakamoto) do not even use their assets in order to lower or raise the cryptocurrency price. They keep coins in their wallets, maintaining a balance in the market.

It should be mentioned that even those whales who play with the sell walls and rinse Bitcoin can be useful for an ordinary investor. To use them for your benefit, you need to catch the wave they created.

How can an ordinary investor profit from whales’ actions?

Yes, you’ve understood right. You can benefit from whales. It is a wave created by a whale which is an ideal opportunity to enter the market. For example, when a whale goes bear and places orders to sell huge amounts of cryptocurrency at a price lower than the market, the price naturally falls. Most traders start to sell their assets, but it would be much cleverer to start to buy them as a whale does. When a whale increases the buy wall and other traders start to buy cryptocurrency, raising the price, it's high time to sell your assets.

Here, the most important nuance is being able to notice a whale’s trend in time. There are two ways to do this:

●     To monitor the movement of funds (in particular, Bitcoin) on the largest cryptocurrency wallets. You can do this on www.bitinfocharts.com . A large transfer from the wallet indicates that a whale is throwing his assets in the market, which means we must wait for price changes. If it falls sharply, it makes sense to buy up cryptocurrency quickly, if it suddenly jumps - to sell. The clearest signal is when transfers are made from several top wallets.

●     To follow the order book on top-level cryptocurrency exchanges. Placement of orders to buy or sell huge amounts of cryptocurrency is mostly linked with games of whales. If you see an overvalued buy wall, do not rush to buy coins. It’s better to wait for the peak and sell your assets at a beneficial price. If a whale maintains a semblance of collapse (by overvaluing sell wall), wait for a serious recession and buy coins. After all, soon a whale will buy them cheap and raise the price.

I’ll give you a piece of advice: if you are an inexperienced trader, don’t follow the whale trends. To play like them, you need to think like them. You should be able to determine the overvalued buy and sell walls, analyze the overall situation in the market, and correctly assess the situation on the exchanges. If you have such skills, you will be able to generate profits.

Prospects for cryptocurrency market development

Have you ever wondered why cryptocurrency is becoming more and more popular? It’s largely because the purchasing power of fiat money keeps dropping. This process is driven by two main factors:

●     An increasing number of people learn about Bitcoin and come to the conclusion it is the most promising currency

●     Liquidity grows. Buying Bitcoin today requires much less money and effort than a year ago.

In my opinion, these factors can even provoke hyperbitcoinization.

Hyperbitcoinization may occur if the world governments decide to tighten the screws in the cryptocurrency market and attempt to control capital. Bitcoin will have a chance to become currency No.1. After all, it has no borders, and it does not depend on patriotism or ethnicity of a person. Although the use of Bitcoin is based not on physical properties, like gold and silver, but on mathematical properties, it has all the characteristics of money (durability, mobility, divisibility) and can fully perform its functions (means of accumulation, payment, etc.). The real price for Bitcoin is determined by the balance between the demand of people who need it and the supply of people who own it.

To conclude this section, I want to say the following: if your decision to master cryptocurrency trading is firm and irreversible, then I do not recommend seeking the help of professional traders. Each of them, of course, can promise to explain simple and effective trading strategies. However, one must understand that a professional trader won’t demonstrate their methods of analysis, charts or reveal personal secrets to an outsider. Therefore, the path of a retail trader by trial and error is much shorter and more profitable. You already completed the first step when you bought my book.☺

Homework

Choose 5 cryptocurrencies you would like to trade, study them and write down their features:

●     Capitalization

●     Exchanges they are traded on

●     Trading volume

●     Technological solutions of a coin

●     Coin creators’ Twitter accounts

●     Location of head office

[1] The Jamaica Accords were a set of international agreements that ratified the end of the Bretton Woods monetary system

[2] It is an investment fund that pools capital from accredited individuals or institutional investors and invests in a variety of assets, often with complex portfolio-construction and risk-management techniques. It is administered by a professional investment management firm, and often structured as a limited partnership, limited liability company, or similar vehicle.

[3] A cryptocurrency (or crypto currency) is a digital asset designed to work as a medium of exchange that uses strong cryptography to secure financial transactions, control the creation of additional units, and verify the transfer of assets. Cryptocurrencies are a kind of alternative currency and digital currency (of which virtual currency is a subset).

[4] A blockchain, originally block chain, is a growing list of records, called blocks, which are linked using cryptography. Each block contains a cryptographic hash of the previous block, a timestamp, and transaction data (generally represented as a merkle tree root hash).

[5] Pump and dump" (P&D) is a form of securities fraud that involves artificially inflating the price of an owned stock through false and misleading positive statements, in order to sell the cheaply purchased stock at a higher price. Once the operators of the scheme "dump" sell their overvalued shares, the price falls and investors lose their money. This is most common with small cap cryptocurrencies and very small corporations.

[6] Proof of stake (PoS) is a type of algorithm by which a cryptocurrency blockchain network aims to achieve distributed consensus. In PoS-based cryptocurrencies the creator of the next block is chosen via various combinations of random selection and wealth or age (i.e., the stake).