Development and new technologies are taking the world by a storm. Innovation is the fuel for most growing companies. And between all the rise of technological innovations and the need for companies to fund these, Cryptocurrencies have become the magic bowl that happens to grant a lot of wishes.
Needless to say, that those who play with little or no knowledge of digital currencies may simply end up on the losing end. This is why it is important to know how a Cryptocurrency can help you realize your investment goals.
Today, we will talk about Litecoin which saw a price surge two days ago and is becoming a hot topic of discussion for Altcoin investors.
We will look at Litecoin, the technology behind it, the prospects it offers and how can an investor make money by trading in it.
What is Litecoin?
Like Bitcoin, Litecoin was created as a decentralized form of digital money which allows users to make instant transactions with an almost negligible cost to anyone around the world. Litecoin has a software algorithm named Scrypt which is used for mining the coin. This is probably the reason why it was named Litecoin because it avoids the use of powerful custom users to specially mine the currency.
The transaction time on Litecoin is also very quick. Where a Bitcoin transaction may take as long as 10 minutes, Litecoin transactions can be conducted in as low as 2.5 minutes.
- When it launched in 2013, the coin could be bought for $4.30.
- In January this year, the coin was still hovering around the $4 mark.
- In April the price started rising, and since it has witnessed an upward trend in its growth.
- At this time, Litecoin is valued at $273.12!
What is in it for me?
In the last seven days, the price of Litecoin spiked as high as $338.14. It has adjusted itself to a lower price, but traders were able to enjoy many profits because of this surge. Needless to say, keen foresight is required to predict the fact that the price may adjust. But the volatility of the market often makes it difficult for people to predict success.
Knowing that the value of Litecoin has grown exceptionally well is an indicator that people are beginning to recognize its usability which means that it has some good future prospects.
Understand the Theory of Trading
Now, to begin making money with Litecoin trading, you will first have to understand how trading works in the Cryptocurrency market. You should learn about graphs and candlestick charts. Learn about the different patterns and do your research about how different techniques used in trading.
The main idea of making money through trading is to buy low and sell high. Look at graphs to check for low points and invest in Litecoin when it is low so that you can, later on, sell it at a higher price and eventually enjoy the profits from the difference in the price.
But trading is not just about understanding graphs, there is the need to be intuitive, and to know various other technical indicators and trading technologies which are used by Cryptocurrency traders.
Learning About Technical Analysis
Technical analysis is based on the idea that history repeats itself. Traders use past price movements to predict the future price of the Cryptocurrency. To make money with Litecoin trading, you will require a good knowledge of what is technical analysis and how it is performed to trade the coin.
Uptrends and downtrends are most common in trading, but there are other factors like patterns which can help you analyse the future of a coin. While there are some things that remain completely unknown, predicting the future with the help of the past, is the most common way of trading in Cryptocurrencies.
Understanding Trading Strategies
There are various trading strategies which are also considered when making a purchase. From Renko Charts to the Bill William’s Method, trading involves many strategies. Knowing these strategies gives you an upper hand when dealing with the bigger fish in the sea.
Trading in Litecoin may not give you instant profits. A lot of people lose their money, but those who do adequate research and complete necessary studies before proceeding have better success.
Some popular trading strategies Litecoin traders use is:
- Bollinger Bands – You create Bollinger Bands on the Litecoin graph which usually consists of an upper, middle and lower band. The upper band shows when the Litecoin is overbought and lower band shows when it is oversold.
- Renko Charts – It uses the closing prices of a given trading session and is usually identified by the bricks used in the chart. The user has the flexibility to choose the amount and the period according to which a block is created. Those who understand how to read Renko charts and utilize its ability to translate market changes for them can enjoy better returns on their Litecoin investments.
- Bill William’s Method – This strategy helps traders make sense in chaotic markets. It is very effective in Litecoin trading where the market sees regular changes and sudden price movements.
- Ichimoku Kinko Hyo – This trading strategy wasn’t utilized very widely until recently because of the lack of understanding and poor translations of this Japanese method. It requires a thorough understanding of the strategy before you begin using it.
- The Fibonacci Sequence – Commonly used by investors and stock traders too, the Fibonacci Sequence helps traders identify where they should buy in a certain trend to enjoy lower buy prices and higher sell rates.
- Candlestick Analysis – The most commonly used trading strategy, candlesticks are often seen in graphs and can help traders find out where to buy and sell Cryptocurrencies. Candlestick analysis is best done in graphs with a timeframe over 4 hours.
Should I Buy and Hold Or Should I Day Trade Litecoin?
Some people believe in investing in Litecoin for the long term. Given its rise in the few years of its existence, imagine how much the person who bought it in 2013 would have earned in profits. Or think how disappointed would the person be who would have bought Litecoin early but sold it when the price went down?
Buy and hold strategies have resulted in the best Cryptocurrency success stories. But that does not mean day traders don’t earn well. Day trading requires time, patience, knowledge of the market, and researching various resources to analyze the market properly.
Depending on your investment goals, you can choose either. Buy and hold strategies are good for people looking for additional money beyond their existing jobs, and day trading is more suitable for those who are planning a career in Cryptocurrency trading.
What Should I Know About Exchange Fees?
Different exchanges charge a different fee for trading. If you are looking for the right exchange to trade in Litecoin then we would suggest visiting Cryptocoin judge. It provides the review for different exchanges and has a lot of information on trading in various Altcoins. We usually find the details about exchanges we want to register with on this website.
The exchange you pick can make a difference because some exchanges are relatively quick and processing transactions are much faster than others. Knowing the pros and cons of different exchanges empowers traders to do better. So make sure that you take the time to understand how different exchanges work and what makes a particular exchange more preferable than others.
Remember that the Markets are Unpredictable
With all the trading knowledge and research that you may conduct, one thing that remains constant for all forms of trading is that the future is largely unpredictable. This is why it is said that traders should invest just the amount that they can afford to lose.
Cryptocurrency markets are especially volatile. Predictability in these markets is even more difficult. So remember to not put way more than the amount that you can afford to part with.
Litecoin trading can be beneficial because of the uptrend in the value of Litecoin since it started. Recent developments in the Cryptocurrency market and the introduction of Bitcoin Futures have strengthened Altcoins even more. This is believed to be one of the reasons for the success of Litecoin. Buying and holding can offer some great future prospects for Litecoin traders, but so can astute day trading when conducted with adequate research.
Ever wondered how much money you could have made if you had invested in Litecoin when it was launched through an Initial Coin Offering (ICO)? With the amazing growth that it is now experiencing, Litecoin trading has a lot of potential, but if you are thinking of starting early by investing in an ICO with good prospects, then we will suggest that you head to ICO Token News.
It has all the details and news you would need to invest in ICOs and to find out about current token sales. Remember that many traders give up after their first loss, but the idea is to learn from your past experiences and use it to increase future returns.