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Hello FireToken members,
In this article we will go over how volume can affect prices on the exchange and understand the reason how a price change is triggered.
We will assume that all members are somewhat complacent in how to set up buy and sell orders, as we are joining FireToken for the purpose of profiting from #cryptocurrency trading.
When a trader decided on a coin or token to purchase or sell, he/she will set up a price target to buy in or sell out. Many traders utilize bot to automatically set the margin in which they will take profit or stoploss their order. The percentage is based on personal preference and can range anywhere from 15% to up to 45% depends on the market condition of that pair.
Because most traders use a combination of market tools and patterns to see the most common level of support and resistant, the targets can be predicted quite easily. When the price hit or surpass those target levels, we can expect an influx of orders on the exchange. This creates a snowball effect in which the price will move dramatically in the CURRENT direction for a very SHORT time window. Very soon they will reach a condition most known as Overbought or Oversold. When such conditions are met, the short trend will be reversed in order for the market to balance itself out.
FireToken group consensus system allows our members to utilize our volume to reach these price targets with the intention to trigger the snowball effect. When we buy or sell a large quantity together, we temporarily create an imbalance of supply versus demand. This will cause the price to move in the direction we want and trigger automatic orders previously set by traders who are not on the market. ALL members are advised to predetermined your profit margin prior to setting your Buy/Sell orders and set these margins at the same time of putting in your orders. The profit window is short and price will change rapidly.
Because we are trading cryptocurrency, it is very important to note that most upward movements will have to stop at some point to retrace but the opposite may not be the same. In cryptocurrency, because there are so many useless tokens with the main purpose of creating quick profit, what goes down may stay down forever. That is why it is EXTREMELY IMPORTANT to pay attention to the market, set stoploss for cryptocurrency trading and only trade coins with sufficient volume.
To recap, we should now understand the following
1. Volume causes major price change due to supply and demand
2. Large orders can trigger previously set price targets from other traders in both bull AND bear market and create a snowball effect for the price to move in the SAME direction for a SHORT time before reversing.
3. All major market movements are rapid and only temporary. So the practice of pre-determined profit and stoploss is vital to a trader success.
4. Don't trade shit coins. Just like gravity, what goes up must come down but what goes down may stay down.
We hope to provide our members with valuable information so that you can get a better understanding of the trading market and success. Our members success directly translate to our community success. Big institutions are getting ready to openly trade cryptocurrency. This is a positive thing, because cryptocurrency profit is now being recognized. Join us now and utilize our strength in numbers, contribute your knowledge to our community so that we can all understand your view of the market and we can all profit together. These are exciting time in the market as profit will drive innovation, and innovation will improve the world. We can all benefit from blockchain adaptation.