What is currency trading?
Oct 10, 2024
What is currency trading?
Most of the digital asset transactions we usually contact use stable currency (such as USDT\USDC, etc.) as the pricing unit, so as to price digital currency such as Bitcoin (BTC) and Litecoin (LTC). For example, when using USDT to price Bitcoin, a BTC/USDT transaction currency pair is formed (when using one digital currency to price another digital currency, a transaction currency pair will be formed).
Through currency trading, the exchange between digital currency can be completed, thus earning the income of buying low and selling high. For example, when you buy bitcoin with USDT, the bitcoin market goes up, so you can exchange bitcoin for more TEDA coins. Suppose you buy 1BTC when it is worth 30,000 USDT, and sell it when the unit price of Bitcoin rises to 40,000 USDT, then you can exchange it for 40,000 USDT and earn 10,000 USDT. On the contrary, when the bitcoin market drops, the same amount of bitcoin can be converted into less TEDA coins, and if it is sold, it will cause losses.
So, what if bitcoin is used as the pricing unit to price Litecoin? Currency-to-currency transaction refers to the exchange of one digital asset for another. For example, using BTC as the pricing unit to price LTC, an LTC/BTC transaction currency pair is formed. The price of this transaction currency pair represents how many units of BTC are needed to buy one unit of LTC, or how many units of BTC can be obtained by selling one unit of LTC.
At present, there are four major trading areas in Euroeasy currency trading, namely: USDT trading area, USDC trading area, other stable currency trading area and CRYPTO trading area.
In other stable currency trading areas and CRYPTO trading areas, other digital assets can be used as the pricing unit for currency-to-currency transactions. For example, BTC can be used as the pricing unit to purchase ETH in CRYPTO trading areas.
The mechanism of currency trading is mostly matching mechanism, with price first and time first. When the purchase price is more than or equal to the sale price, the transaction will be made immediately, so as to realize the exchange between digital currency.
Advantages of currency trading
Currency trading has the characteristics of convenience, low cost and low risk. In the traditional digital currency transaction, if you want to exchange Bitcoin for Ethereum, you need to pay a handling fee to sell BTC first, and then pay a handling fee to buy LTC. These two transactions need to pay two handling fees as the transaction cost, and you also need to consider the potential cost of the exchange rate between digital currency brought by the intermediate time. Currency-to-currency transaction can directly replace BTC with LTC, which reduces the handling fee and is more convenient and fast.
In addition, compared with leveraged transactions, contract transactions and other transactions in which leverage is used, the risk of currency trading is lower.
At the same time, currency trading has the following characteristics:
It is flexible and reduces the cost of switching currencies.
It is more convenient for the conversion and circulation between digital currency.
It provides more arbitrage opportunities about the exchange rate between currencies.
All-weather trading, not limited by any time and place.
How about the handling fee for currency transactions?
As an important part of the cost, transaction fees deserve the attention of traders and consider the impact of these fees on transaction costs.
Ouyi distinguishes between ordinary users and professional users according to the transaction volume. Ordinary users are divided into different grades according to the different positions of OKB and professional users according to the different transaction volume and assets. Different levels determine the transaction fee for the next day. You can check your transaction fee level in Ouyi-Personal Center-Fee Level.
How to conduct currency transactions?
If you want to trade currency, you need to do it on the trading platform. When choosing a platform, you should not only consider the platform handling fee, but also choose a safer and more reliable platform, pay attention to the credibility, security and supervision of the platform, and take necessary security measures to protect your account and funds. For example, Ouyi provides expert services to users, and provides proof of POR reserve every month to effectively protect users' assets.
Currency trading involves technical analysis, market research, etc. Users can use chart analysis, trend analysis and other tools to guide trading decisions, thus improving the accuracy and success rate of trading.
When trading, we need to pay attention to risk management. Digital currency in the encryption market is at great risk of fluctuation, and since it trades 24 hours a day, investors should formulate appropriate risk management strategies, including stop loss and take profit, to protect investment funds.
Note: Currency trading provides digital currency investors with flexible and diverse trading opportunities, but it also comes with certain risks and challenges. Investors should fully understand the market situation, formulate reasonable trading strategies, and carefully choose trading platforms and conduct trading operations.
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