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Lesson 3. Trading: where the trading is carried out?

And you are a diligent student – together we have reached the third lesson!??
Today I will tell you where you can trade and which platforms are suitable for this.

Let’s start with digital assets. These include stocks, indices, futures, and other values, such as oil or gold. Also, cryptocurrencies can be easily attributed to digital assets.

Many special profile platforms are used to buy/sell digital funds. If we approach the issue in more detail, the platforms for trading assets are divided into:

  • Stock exchanges – to work on the “securities market”. This includes trading in stocks and indices. In addition to shares, bonds and bills are traded on the stock market;
  • Forex markets – currencies are used as commodities. The name “forex” in translation means “foreign exchange”. That is, the work is carried out with fiat* funds of various countries;
  • Cryptocurrency exchanges – for trading in cryptocurrencies. As in the forex market, there are elements of “exchange”. Many platforms offer the opportunity to work with both crypto and fiat * currencies.

* Fiat money (in other words, “paper money”) is currencies which nominal value is set by the state of the country, and also in case if the government has declared this currency as legal means of payment. The most famous examples of fiat currencies are USD, EUR.

I will tell you more about each of the abovementioned types of work with digital assets in the lesson “Financial Markets – Description”.

Brokers are also worth mentioning – these are the so-called intermediaries between the exchange and the trader. On their platforms, brokers can combine absolutely any types of assets and trade through cross rates. There are different kinds of supply and demand in the markets, for example, you can buy gold with Bitcoin, and futures contracts with silver or platinum.

The main thing you need to understand is that success is not about knowing descriptions, details, subtleties, and technical aspects! For profitable and quality trading, it is very important to form a mind-set of a certain financial type and keep up with the times, as the market is changing at a rapid pace.

Consider several types of platforms for exchanging digital assets between market participants:

Some examples of stock exchanges:

  • Nasdaq is an American exchange specializing in high-tech stocks;
  • NYSE is the main US stock exchange, the largest in the world in terms of turnover.

A few examples of cryptocurrency exchanges:

Binaryx is a young cryptocurrency exchange (that is, with support of crypto and fiat currencies), with available function of working with the help of professional traders, and additional monetizing of your skills;

Binance is an online exchange service between cryptocurrencies and fiat money;

Bitfinex – the minimum entry is from $ 10,000, the exchange works with both fiat and cryptocurrencies, there is the possibility of margin trading (loans with credit leverage).

It should be noted that all crypto-exchanges share leadership according to different indicators, the most suitable one should be chosen on an individual basis;

Brokers: if we talk about brokers as exchange platforms, then there are quite a lot of them in every country. Even a bank can act as a broker, so we will not list them. It is also noteworthy that working with brokers is the least profitable of the listed methods.

In order to fully engage into the trading process, you need to devote more time to exchanges and their basic interface, which is what we are going to do now.

The terminal of the exchange is divided into several main modules:

  • module with graph
  • module for placing orders
  • module of balances and assets
  • module of the volume of trades placed

There are also variations, when each exchange makes modules individually, depending on the type of work and the type of instruments used. But we shall briefly consider the main ones. 🙂

Module with a chart – displays the movement of an asset* within the selected time interval. Usually it has standard settings, but an advanced user can change them for his type of work (we shall talk about this later in our course).

* Asset is the name of any cryptocurrency, stock, or index bought on an exchange.

Module for placing orders – in this module, the user selects the parameters of the purchased or sold asset.

Order is a trader’s order to buy or sell his asset at a specified price (limit or market one). We will look at the types of orders in more detail in Lesson 8 “Buy / Sell Orders”

Balance and asset module – this module displays the acquired assets (cryptocurrency, metals, etc.), as well as balances, i.e. the number of previously purchased cryptocurrencies in your wallets.

The module of the volume of placed deals (in another way, this module is called the order book) – reflects the total number of orders and the volume of deals * for sale or purchase.

* Volume of transactions is the sum of all transactions concluded by all users participating in the transaction that placed orders to buy or sell at a single price, expressed in USD, EUR, BTC, or other currency.

The delta between the first sell order and the first buy order in the order book is called the spread.

According to Wiki, “spread” (pronounced: “spread”; from the English word “spread”) is the difference between the best prices of orders to sell (ask) and buy (bid) at the same moment of time for any asset ( stock, commodity, currency, futures, option or cryptocurrency).

For example, if the first sell order in the order book is 101 USD, and the first buy order is 99 USD, then the delta (i.e. spread) is 2 USD.

Of course, as I said before, these are not all modules, but the main ones that are found on almost all exchanges. In the next lessons, we will take a closer look at the interface of the Binaryx exchange.

Looking ahead, I will say that the exchange also works with a margin account, and provides for interaction with some more modules, but first things first.

I hope this lesson was as easy to learn as the previous ones.

Was it difficult? Write your suggestions and wishes; let’s make the learning process easier together!

Thanks for reading?The topic of the next article is “Exchanges and exchangers, what’s the difference?”. Ready to continue?

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