The term trader is a concept widely used in the world of finance. Before working in the world of cryptocurrencies; it was not a common term to me.
So, what is a trader?
In general, the concept of trader has been linked to stock markets like Wall Street. With the emergence of new technologies, digital money was born, and it has slowly gained a spot in the financial system. Thus, creating the need for a new branch of traders; crypto traders dedicated to the purchase and sale of cryptocurrencies.
People who are generally connected to this type of activity are those with mathematical skills; In countries like the United States people study for this. Like on the traditional financial sectors, in the world of cryptocurrencies, the pioneers in trading began by themselves. However, in this new market in addition to having financial skills, there must be some knowledge of the digital world in which they surround themselves; such as digital wallets, exchanges, fees, among others.
The rise of digital currencies creates the need for many to learn and become a part of this new era of traders. Many educational institutions have been designed to teach how to be a crypto trader.
Trader or investor?
"The main difference between a trader and an investor is the duration by which the person owns the asset. Investors tend to have a longer-term time horizon, while traders tend to hold assets for shorter periods of time to capitalize on short-term trends. "
In the field of cryptocurrencies, both traders and investors usually mention that they both invest in cryptocurrencies. If we talk about the duration strategy by which the person owns an asset, we can point out that investors are known in crypto as Holder; who buys digital coins and keeps them for a long time. On the other hand, traders are those who are constantly connected to the ups and downs of the market.
Some differences in the markets:
There are many differences in performing as a trader for a traditional market to one in the digital world. Unlike the stock markets, crypto runs 24/7. "In the USA, The shares listed on the New York Stock Exchange or in the NASDAQ stock market, during regular market hours, are between 9:30 a.m. and the 4 p.m. ITS T."
The value of assets is also different, due to operating time, the price of the stock exchange remains with a fixed rate at closing; not like in crypto. In the case of cryptocurrencies "The solution that is currently being applied is to calculate the 24-hour price change by comparing the current market price with the price that a certain cryptocurrency operated the previous day at exactly the same time."
I hope you enjoyed it!
Written By: Carolina Pérez
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