Cryptocurrency trading involves buying, selling, and exchanging digital assets like Bitcoin, Ethereum, and altcoins to profit from price movements. Unlike traditional markets, crypto operates 24/7, offering high volatility and frequent trading opportunities.
Key Points:
- Traded on exchanges like Binance, Coinbase, and WazirX through spot or derivatives markets.
- Driven by market sentiment, regulations, and blockchain innovations.
- Requires strong risk management due to extreme price swings.
Regulation & Compliance:
- Partially regulated market – Regulations vary by country, with some fully legalizing, restricting, or banning crypto trading.
- In India, crypto trading is taxed at 30% on profits and 1% TDS per trade, but not legally recognized as currency.
- Unlike stocks or commodities, crypto lacks investor protection laws, making regulatory updates crucial for traders.
Time Frames Used:
- Short-Term: 5-minute (M5), 15-minute (M15), 1-hour (H1) (Scalping & Intraday).
- Long-Term: Daily (D1), Weekly (W1) (Swing & Position Trading).
Example:
- A trader buys Bitcoin at $50,000 and sells at $52,500 within hours, making a $2,500 profit per BTC.