CRYPTOCURRENCY TRADING

INTRODUCTION
INTRODUCTION

Crypto currency

A digital asset created to work as a medium of exchange of value within a

peer to peer economic system.

Ituses cryptographic techniques to verify and secure transactions between

users and to control the creation of additional units.
Advantages of crypto over traditional money
1. It is largely decentralized with minimal control
2. The transactions costs are much cheaper even going as low as 0.3 dollars on
some networks
3. It is not bulky making it a secure way of moving with money
4. Each crypto has a limited number of units which controls inflation
Difference between a COIN and a TOKEN

 Coin : any crypto currency that has a standalone independent block chain (Bitcoin,
Ethereum, XRP

 Token: a crypto currency that does not have its own blockchain but lives on another
block chain and benefits from its technology. (ERC-20 tokens).
 Coins are mined while tokens are minted

 Another notable difference between tokens and coins is what they represent. While
crypto coins are essentially digital versions of money, tokens can stand for assets or
deeds.

 A token can become a coin if the project develops and acquires its own block chain
NFTS
Non Fungible Tokens
 Fungibility is a property of an asset whose individual units are interchangeable
and essentially indistinguishable from each other.
eg 50k notes.

 For something to act as a medium of exchange it must possess this quality.

 A non-fungible token (NFT) is a type of cryptographic token that represents a

unique asset. NFTs are tokenized versions of digital or real-world assets.
Other Classifications of Crypto
1. Bitcoin Vs. Alt coins
Bitcoin : A crypto currency created by the pseudonymous developer(s) Satoshi
Nakamoto. The first crypto currency
An Alt coin is any crypto currency that is an alternative to bitcoin

2. Volatile crypto currencies vs. Stable coin

A stable coin is a crypto currency whose value is pegged, or tied, to that of
another currency, commodity, or financial instrument.

3. Forks- these represent a modification or are intended to modify original

coins. For example Bitcoin Cash.
Types of Stable Coins
USDT : US Dollar Tether
USDC : US Dollar Coin
BUSD : Binance US Dollar
TUSD : True US Dollar
EXAMPLES OF COMMON CRYPTO CURRENCIES
 Bitcoin(BTC)
 Ethereum(ETH)

 Riple ( XRP)

 Litecoin(LTC)

 Stellar(XLM)

 Basic Attention Token (BAT)

BLOCK CHAIN TECHNOLOGY
 Block chain
A decentralized ledger that consists of a linear chain of multiple blocks that are
cryptographically secured.

Each block contains stored information

The blockchain contains:
 A list of recent transactions/ any information and a reference to the block that came
immediately before it.
 A permanent record of all confirmed transactions thus working as a decentralized
ledger.
 This ledger is distributed across all nodes in the network making it highly resistant
to modification unlike a centralized one which can easily be compromised either by
network faults or administrators.

Examples of Blockchains
 Bitcoin Blockchain

 Ethereum Blockchain

 Tron Blockchain

 Solana

 Polygon

 Binance Beacon Chain

CRYPTO MINING
 WALLETS

 A wallet is a program or device that stores cryptocurrency assets and enables you to
access your assets.

Every wallet contains

a public key : the wallet address
a private key : password/ pin / biometric/ face recognition
Types of wallets
 Hot wallets. This is an online application/ website where digital assets can be
stored. Its convenient but unsafe.

 Cold wallets. This is a Hardware device where crypto currencies can be stored.
 Basic Components of A Simple Online Wallet

 Home Page
 Receive

 Send

 Swap

 Transation History
Review Quiz

1. What Is A Cryptocurrency A digital asset created to act as a medium of exchange of value

2. What are the disadvantages of crypto currencies. Cyber attacks, regulators, competition, volatility

3. What is the difference between a Coin and a Token. A coin is a digital currency with its own blockchain while tokens do
not have natibve blockchains

4. What is Bitcoin Mining The process of verifying bitcoin transactions by solving mathematical puzzles. Miners are paid in bitcoin

5. What Is a blockchain. A decntralized digital ledger

6. Name the two types of crypto wallets available Hot and Cold

7. List 5 examples of common cryptocurrencies Bitcoin, Ethereum, BNB, Riple, Monero

8. Name one site one can use to verify if a cryptocurrency is legit or not
coinmarketcap.com

9. What Is a stable coin A crypto whose value is pegged to the value of a fiat currency or asset

10. Name 3 exmples of stable coins USDT, USDC , BUSD

PRACTICAL
How to send and receive money on a wallet application
Review Quiz

1. Quickly summarize how one can send money from one wallet to another using
a network address
2. Copy network address of the receiver,
3. Open the app,
4. click withdraw(send),
5. select send via network,
6. paste the address of the receiver,
7. select the type of network,
8. input the amount to send
9. click confirm to put your verification codes

10. Name any five network addresses

11. TRON (Trc20)
12. Ether (ERC20)
13. Binance Beacon Chain (BEP2)
14. Binance Smart Chain (BSC)
15. Bitcoin Blockchain

16. Quickly illustrate how to get a TRC20 wallet deposit address from your
account
17. Go to wallets,
18. Click deposit,
19. click USDT,
20. Scroll to select TRC20 network

21. What would affect your choice of Wallet addresses Sending Rates and availability on different apps
EXCHANGES
 An exchange is simply a place where the buying and selling of assets occurs.

TOP 5 EXCHANGES BY RANKING

 A standard exchange app includes;
-Home
-Markets
-Trades
- futures
-Wallets.

PRACTICAL

Setting Up A Binance Exchange Account

Wallet Features on An exchange

Sections of Your Wallet

1. Spot Wallet WHERE YOUR MONEY LANDS WHEN SOMEONE SENDS YOU THROUGH A NETWORK ADDRESS
IT IS ALSO WHERE YOUR MONEY FOR SPOT TRADING IS KEPT

2. Funding Wallet WHERE YOUR MONEY LANDS WHEN SOMEONE SENDS YOU THROUGH YOUR EMAIL
3. Margin Wallet WHERE YOUR MONEY FOR MARGIN TRADING IS KEPT
4. Futures Wallet WHERE YOUR MONEY FOR FUTURES TRADING IS KEPT
5. Earn WHERE YOUR MONEY FOR STAKING IS KEPT
6. Overview A SUMMATION OF ALL THE MONEY YOU HAVE IN YOUR WALLET
 REVIEW QUIZ
Explain these different types of segments in your wallet
1. Spot Wallet
2. Funding Wallet
3. Margin Wallet
4. Futures Wallet
5. Earn
6. Overview
1. List the different examples of crypto markets available on Binance
2. Pair the following coins correctly and state the market the pair can be found
in
Eg XRP, USDT correct pair XRP/USDT found in the USDT market
 BTC, USDT
 BTC, BNB
 ETH, BNB
 BNB, BUSD
 USDT, USDC
 BUSD, USDT

3. Define the term ALTS MARKET as used in crypto trading on Binance

What is the significance of the elements circles in blue
1.

2.

3.
Review Quiz

1. What Is A Cryptocurrency A digital asset created to act as a medium of exchange of value

2. What are the disadvantages of crypto currencies. Cyber attacks, regulators, competition, volatility

3. What is the difference between a Coin and a Token. A coin is a digital currency with its own blockchain while tokens do
not have natibve blockchains

4. What is Bitcoin Mining The process of verifying bitcoin transactions by solving mathematical puzzles. Miners are paid in bitcoin

5. What Is a blockchain. A decntralized digital ledger

6. Name the two types of crypto wallets available Hot and Cold

7. List 5 examples of common cryptocurrencies Bitcoin, Ethereum, BNB, Riple, Monero

8. Name one site one can use to verify if a cryptocurrency is legit or not
coinmarketcap.com

9. What Is a stable coin A crypto whose value is pegged to the value of a fiat currency or asset

10. Name 3 exmples of stable coins USDT, USDC , BUSD

Review Quiz

1. Quickly summarize how one can send money from one wallet to another using
a network address
2. Copy network address of the receiver,
3. Open the app,
4. click withdraw(send),
5. select send via network,
6. paste the address of the receiver,
7. select the type of network,
8. input the amount to send
9. click confirm to put your verification codes

10. Name any five network addresses

11. TRON (Trc20)
12. Ether (ERC20)
13. Binance Beacon Chain (BEP2)
14. Binance Smart Chain (BSC)
15. Bitcoin Blockchain

16. Quickly illustrate how to get a TRC20 wallet deposit address from your
account
17. Go to wallets,
18. Click deposit,
19. click USDT,
20. Scroll to select TRC20 network

21. What would affect your choice of Wallet addresses Sending Rates and availability on different apps
 FUNDAMENTAL ANALYSIS
Fundamental analysis is the method to determine the intrinsic value of any crypto by comparing key
ratios to find out a company's financial health.

Fundamental analysis helps in evaluating a cryptos intrinsic value in order to find out its long-term investing
opportunities.

It looks at overall factors like

 Market Conditions
 Market Capitalization
 Company Financials
 Company Projects
 Company Whitepaper‫٭‬

White Paper‫٭‬
A whitepaper is a document that provides the reader with the necessary information required to learn about a
crypto project and gives the investors an idea about whether the project is worth investing in or not.

Crypto companies mostly publish whitepapers to catch the attention of potential investors and users.
 TECHNICAL ANALYSIS

Also referred to as charting, is a type of analysis that aims to predict future market behavior based on
previous price action and volume data.

Important to note:
 TA is strictly focused on historical price action. Therefore, it is utilized as a tool to examine an
asset's price fluctuations and volume data, and many traders employ it in an attempt to identify
trends and favorable trading opportunities.

 The main underlying assumption of technical analysis is that fluctuations in the price of an asset
are not random and generally evolve into identifiable trends over time.

 TA is the analysis of the market forces of supply and demand, the price of an asset is a reflection
of the opposing selling and buying forces, and these forces are closely related to the
emotions(market sentiments)traders and investors (essentially fear and greed).
 Technical Analysis is based on candle sticks

 Candlestick
A graph representation of price action that displays the open, close, high, and low points
within a certain period.

Candlesticks: are based on an ancient Japanese system of prediction in the rice markets in
the 1600’s

There are 3 types of candlesticks

 Bullish Candlesticks

 Bearish Candlestick

 Doji Candlestick
BULLISH CANDLESTICK

The bullish candle (Green/ Traditionally white in color) : is named after the bull’s mode
of attack with horns and it symbolizes a rise in the prices.

CLOSING PRICE IS HIGHER THAN OPENING PRICE

BEARISH CANDLESTICK

The bearish candle (Red/ Traditionally black in color) : is named after the bear’s mode of attack with its
paws and it symbolizes a fall in the prices.

CLOSING PRICE IS LOWER THAN OPENING PRICE

DOJI CANDLESTICK
The word doji comes from the Japanese phrase meaning “the same thing.”
This is a candlestick where the opening price and the closing price are the same or very similar
by a difference of 0- 0.3%.
They speak of indecision in the market and in trends

CLOSING PRICE IS EQUAL TO THE OPENING PRICE

DOJI CANDLESTICKS

Speak of indecision where neither party is dominant.

There are four types of Doji candlesticks:
 four price doji
 long legged
 dragon fly
 Gravestone doji
4 PRICE DOJI:

 A short line in the market where the open, the close, the high and the low are all the
same.
 Will most likely appear when the time intervals are short (1minute candlesticks)

 Usually signifies low trading volumes or fewer numbers of transactions.

 Usually the market will take on a sideways trend for a few moments before actually
becomes decisive
 If it occurs in a sharp trend it might be an announcement of a reversal
 In a sideways tend, it may be the continuing of market indecisiveness
In a sharp trend: reversal
 Long-legged doji

 Sign of a reversal in market prices, especially if it occurs after bullish candles

 Dragon Fly
 Opposite to the gravestone doji
 Opening, closing , high are the same,
 Appearance in a downtrend announces a reversal
 Appearance in an uptrend symbolizes the continuation of the uptrend
 Gravestone doji:
 The opening, closing and low are all equal.
 Appearance in a down trend symbolizes continuation of the downtrend.
 Appearance in an uptrend symbolizes the end of the uptrend
Summary
 Four price doji: continuation of a side trends/ reversal in any sharp trend

 Long legged doji: indecisive and the next candle is important, reversal can be
in any direction
 Dragon fly doji: announces uptrend and further uptrend

 Grave stone doji: announces down trend and further downtrend

BEARISH CANDLESTICKS
REVIEW QUIZ
1. Define the following
 A bearish candlestick
 A bullish candlestick
 A doji candlestick

2.List any one type of doji candle stick and its significance in the market charts

3. What does a four price doji signify in

i) A side trend
ii) A sharp trend
 What does the following trading data signify
 How would react if you saw the following
 1.
 A Marubozo is a type of candlestick charting formation that indicates a security's
price did not trade beyond the range of the opening and closing price. It is a
candlestick pattern that lacks a shadow.

 Marubozo in Japanese means DOMINA.

 Therefore this candlestick signifies the continuation of a strong trend

Opening Marobozu
When the opening price is the lowest or
vvvvvvvvvvvvvvvvvhighest of the day

Closing Marobozu
 When the closing price is the lowest or
vvvvvvvvvvvvvvvvvvvvhighest of the day
Spinning tops : They signify a reversal in a market trend
HAMMER CANDLESTICK : MARKET REVERSAL
TRENDS :
 Uptrend : when the market is forming higher highs and higher lows

 Downtrend: when the market is forming lower highs and lower lows

 Side trend: the lows and highs are within the same range
 J
INDICATORS
A market indicator is a quantitative tool that is used by traders to interpret financial data
in order to forecast stock market movements.
 Bollinger Lines

 RSI

 Stochastic RSI

 MACD
 1, 2, 3, 4, 5, 6

 1.5, 2.5, 3.5, 4.5, 5.5

 Bollinger Bands
 Developed by John Bollinger

 Consisted of a moving average band (typically a 20day moving average)

 And two trading bands placed around the moving average

 They are placed 2 standard deviations away from the moving average above and
below it
 They describe how prices are dispersed around an average value

 They capture about 95% of the price ranges

TYPES OF ORDERS

Limit Order : An order to buy or sell at a particular price or better.

Market Order: An order to buy or sell immediately at any price

Conditional Order (Post Only Order) : An order to buy or sell when a certain condition is filled,
eg. Buy at market when price of btc goes down to 20,000usdt- the order will not appear on the
order book until that condition is filled

Stop Limit Order: Consists of a Stop Price and a Limit Order

If I buy 1 btc at 20,000usdt intending to hold it for a while, I can place a Stop Limit Order as follows
Stop : 19,500usdt
Limit : 19,300 usdt

This means if the price of my BTC goes down (instead of going up) – when it hits 19,500 usdt and
order should be placed in the order book for me to sell immediately at 19,300usdt and get out of
the market
OCO : One cancels other – where you place two orders at the same time (both
Take Profit and Stop Loss )

Eg you bought one bitcoin at 20,000usdt and intend to sell it at 23,000

 However incase of any losses, you are willing to take a loss of 800usdt

Your OCO have

1. a Limit Order of 23,000usdt

2. A stop Price of 19,500usdt

3. A limit of 19,300 usdt

 STOP LOSS
 A price limit entered by the trader to automatically close an open position
and prevent further losses

 TAKE PROFIT A price limit entered by a trader to automatically close an

open position at that particular profit.

 TRAILING STOP LOSS:

 A type of order that lets you set the maximum value or percentage of loss you
can incur on a trade. If the coin price rises in your favor, the stop price moves
with it
 THE ORDER BOOK
 CRYPTO ORDER BOOK
 10 btc 6700 usdt
 11btc 10.00am 10th april

 1 btc 1pm 10th april

 Reverse the Market – PASSIVE

 Move the Market – ACTIVE
PASSIVE BUYERS : Buy at Limit Price

PASSIVE SELLERS : Sell at Limit Price

ACTIVE BUYERS : Buy at Market Price

ACTIVE SELLERS : Sell at Market Price

Active Buyers buy from Passive Sellers

Active Sellers sell to Passive Buyers