Cryptocurrencies. Perfect volatility trading

Cryptocurrency is the most disturbing thing that has happened to the world economy since the financial crisis of 2008. The monetary relations that are truly free and anonymous have attracted an army of digital gold fans.

Bitcoin’s average daily price range is $ 660 between the high and the low (remember this figure, we will soon return to it in our article). The volatility of other classic instruments: stocks, currencies and raw materials is significantly lower. And there is a reason for that.


A full scope to money making possibilities

Market makers, investment funds and other major players have been trying to curb the financial market, make it calm and compliant with their purposes throughout the twentieth century. And they have almost succeeded in doing that.

As for a common trader, he can make daily fluctuations yield a profit, leaving the stability for the pension reserve.

Today, trading the difference in the cryptocurrency values provides incredible investment opportunities. The volatility of digital gold has become a perfect mechanism for intraday trading.


 “Level” shares and “wild” bitcoin

Having opened a long position at the BTC price level of $ 6000, a trader can reasonably expect a profit of $ 660, and vice versa. The decline target of your short position at $ 7000 can be the $ 6340 mark.

Let’s take Apple shares. Their average volatility has been about $ 3.07 since the beginning of the year. You will agree that a trader shouldn’t expect to receive more than the range of the price movement, which is equal to the same $ 3.07.

Bitcoin and Apple shares volatility
Bitcoin and Apple shares volatility

These examples are based not on assumptions, but on the data on the bitcoin and Apple share price dynamics in 2018.

Volatility is a true space for the active trader’s work. The higher it is, the better your financial goals can be.


Cryptotrading on the Olymp Trade platform

On the Olymp Trade platform you will be able to trade not only bitcoin, but ten crypto assets, as well as two digital currency pairs ETH / BTC and LTC / BTC.


Each asset has its own volatility indicator in money terms. However, there is a strong correlation between the BTC and altcoins (the rest of cryptocurrencies).

This way, if Ethereum value drops by 10% then Bitcoin is quite likely to be down by 10% .This happens all the time, despite the difference in the price of these crypto assets: the BTC is more than $ 6000, and the ETH is less than $ 300.


What is more profitable: investing or trading?

The advisability of long-term investments in digital currencies is always in question. Even one has a diversified investment portfolio, it is impossible to predict the size of the profit and whether one will gain it.

Since December 2017, bitcoin price has fallen from $ 20 thousand to $ 6,5 thousand. The yield of such an investment is now -65%. Ripple has lost about 90% of its value, Ethereum has lost about 80%, and even crypto optimists can’t find signals of a reversal.

We should also mention issuer defaults, their constant restructuring, legal hurdles, cyber attacks … And lots of other things that often make investing in cryptocurrencies unreasonably risky.

Therefore, we recommend that you use the digital currency market not for long-term investing, but for gaining profit on intraday volatility. A short-term approach will reduce the external trading risks and let you concentrate on local trends.


Start trading


And there is one more tip. Keep your mind cool when you fail, and the market threats won’t affect you. Follow our articles, learn more about cryptotrading and trade profitably on Olymp Trade!

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