“Crypto Investing 101: Market Rules, Aave and RSI”
As a beginning investor in the cryptocurrency world, it is necessary to understand the basics of how markets work, and tools that can help you make informed decisions. In this article, we immerse in three key concepts: market order, AAVE (AAVE protocol) and relative force index (RSI).
Market order
In the business markets there is a
market order Instruction for purchase or sale of a specific asset at the current market price. It is usually placed through an intermediary or exchange, which carries out trade on behalf of the investor. Market orders are often used for short -term shops, such as purchasing and holding assets for market fluctuations.
You must specify to place your market order:
- The asset (eg Bitcoin)
- Quantity (eg 100 units)
- Price (eg $ 5,000)
For example, if you want to buy 50 units of bitcoin for $ 5,000 per unit, your market order would be: “Buy $ 50 btc @ $ 5,000.”
Aave (Aave Protocol)
Aave is a decentralized credit protocol that allows users to borrow and lend assets, including cryptocurrency. It is built on blockchain ethereum and offers a number of functions, including yield agriculture, liquidity and stableceoins.
At AAVE, users can store their assets (eg DAI) and raise interest on them when they are waiting for loans or withdrawals. The Protocol also provides a mechanism for creditors to receive remuneration by lending their assets to a higher rate than the market rate.
If you want to use Aave, you will have to:
- Create an account and connect your wallet
- Insert your assets (eg Dai) into the Aave pool
- Create a credit strategy (eg lending 10% of your portfolio)
- Get interest on stored assets
The Relative Power Index (RSI)
The relative force index (RSI) is a popular motion indicator developed by J. Welles Wilder in the 1970s. It is used to measure the force of the price movement of the asset and to identify potentially borrowed or selling conditions.
RSI is calculated as follows:
- Calculate the difference between the current value and the previous values of the high/low (h/l)
- Divide the result with an average profit (0% for normal markets, 50% for strong growth, -50% for a strong decline)
- Multiply the result 100
RSI oscillates between:
- 30-70: Purchased (the predecessed conditions are present)
- 70-80: neutral
- 80-90: Predsenok (the market is likely to continue to descend)
- 90-100: Deployed (the market is likely to continue to increase)
RSI can be used as:
- A business tool to identify potential purchases or sales of signals
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In conclusion, the main market order, AAVE and the relative force index (RSI) are decisive for successful crypto investment. By understanding these concepts, you will be better equipped to make informed decisions and navigate in the complex world of cryptom market. Do not forget to always do your own research, to set realistic expectations and never invest more than you can afford to lose.