The cryptocurrency market has been in a bloodbath for much of 2018 as a myriad of factors continue to exert bearish influence on the market. In the year-to-date period, the price of Bitcoin has declined more than 74% from about $13,700 to around $3,500. The market cap of the entire cryptocurrency industry has also declined more than 68%% from $768 billion to around $107 billion.
The bearish trend in the cryptocurrency market has triggered a selloff that is causing many cryptocurrency traders to lose money; hence, many people who are interested in cryptocurrencies are cautiously staying on the sidelines. A bear market often provides an incredible opportunity to buy assets at a discount. The cryptocurrency market is inherently volatile and complex to understand; hence, you might not have the confidence to buy crypto because of the negativity and complexity. This piece provides insights into why social trading might be a faster means to understand how to participate in the cryptocurrency market.
What is social trading?
Social trading is a novel solution that takes the key elements of a social network to create an ecosystem where traders can interact and share trading ideas. Social networks for cryptocurrency trading provide participants with a platform to watch the trading decisions and results of other traders, ask questions about the state of the cryptocurrency market, and brainstorm on the most effective trading strategies irrespective of whether the markets are trading up, down, or sideways.
Here’s how social trading can help you be a better cryptocurrency trader
- Faster understanding of the cryptocurrency market
It takes a great deal of time and effort to understand the dynamics of the cryptocurrency market because the market is traded on technical indicators. More so, a large part of the fundamentals of the market is based on hype and speculation. Social trading can help you shorten the time and effort it takes to understand how the market works. The fact that you can learn from seasoned traders allow you to zero in on the most important market features instead of focusing on purely academic concepts.
- An opportunity to earn while learning
Social trading also shortens the time it takes for you to start earning from your trading activities. The traditional trading methods will require you to spend some months consuming resources on how to trade; afterwards, you’ll also need to spend time using a demo trading accounts for several months before you commit your money to live trades. Social trading provides an opportunity to manage risk so that you can earn while you are learning how the market works.
- Priority access to reliable market news
The direction of the cryptocurrency market is often being determined by the kind of predominant news trends. Interestingly, veteran cryptocurrency traders are often adept at spotting developing trends before they break out as news stories. Hence, the most successful traders tend to buy the rumor and sell the news. Being a part of a social trading network can provide you with a ring-side seat into the developments in the cryptocurrency industry.
- A strong network and community of traders
Cryptocurrency trading could be a long and lonely journey especially with the fact that the traditional financial markets often look down on people involved with cryptocurrencies. It is not uncommon to hear Wall Street folks call cryptocurrency a scam, a fraud, or a Ponzi scheme. Social trading networks serve as a platform to meet with likeminded people, encourage one another, and to learn from the experiences of others.
Image Source: Pexels
Subscribe to our Newsletter to be a part of our future $1,000 per month contests.