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Ethereum Trading: All You Need to Know [Updated 2021]
Fusion Markets

What is Ethereum?  

You may have heard of Ethereum being compared to Bitcoin, but Ethereum isn’t actually the digital currency itself. Instead, Ethereum is the technology that can run various financial services like payment systems, identity software, security programs, and of course, cryptocurrency trading.  

But how does this technology work?  

Like Bitcoin, Ethereum also uses blockchain technology, but there are quite a few differences on the deeper, more technical side. Blockchain technology is the foundation that supports all of Ethereum’s services.  

The biggest feature of Ethereum is that it is a programmable blockchain. This means that you’re free to use the technology according to your own needs. Whether you need it for payments, software, or even Bitcoin, you’re free to do that!  

Some of the world’s biggest companies are using blockchain in various ways, which shows how flexible the technology is. BMW, the renowned automaker, is using the Ethereum blockchain to track materials across its supply chain.  

De Beers, the biggest diamond mining company globally, is using the Ethereum blockchain to track diamonds from mining to selling. HSBC is also using the blockchain to conduct foreign exchange trades on its FX Everywhere platform.  

The blockchain can be used on just about any technology that requires information to be logged and verified.   

But if you’re here reading this article, you’re probably more interested in investing in cryptocurrency or buying cryptocurrencies. That would be ETH or Ether.  

  

What is the difference between Ether and Ethereum?  

If Ethereum is the technology, then Ether is the cryptocurrency that runs on that technology. However, for most people, “Ethereum” and “Ether” are used interchangeably to refer to the digital currency instead of the technology.  

The shorthand for Ether is ETH, and just like Bitcoin, ETH is a form of decentralised finance or “defi.”  

This means that the digital currency is not centrally regulated by one authority. Instead, all the computers on the blockchain do the work of validating each and every transaction on the network.  

Ether is up there with Bitcoin as one of the most highly traded cryptocurrencies globally, along with Ripple XRP and Litecoin and others available on Fusion Markets’ platforms.   

  

The benefits of trading Ethereum  

As with any digital currency, the biggest benefit of trading Ethereum is the lack of centralised regulation because of blockchain technology. This means that making fraudulent transactions on the network is extremely difficult and almost impossible.  

However, one thing that makes Ether different from Bitcoin is that the supply of Eth is limitless.  

Let’s break it down a little bit.  

The way Bitcoin works is people are constantly “mining” for Bitcoin. However, there is a predefined limit for the amount of Bitcoin that can ever be in circulation. Once all the available Bitcoin has been mined, that’s all the Bitcoin that will ever circulate.  

The Bitcoin mining rate slows down over time, so the prediction is that the last Bitcoin will be mined at around 2140. That’s over a hundred years from now, but it’s still a definite time that will arrive.  

For most people, the problem with the limited supply of Bitcoin is that it can create issues like high inflation levels in the future.  

The supply of Ether does not have the same limitations that Bitcoin has. Thus, it can be more stable in its fluctuations, and this effectively works as a hedge against extreme inflation.  

Ether is also less volatile, at least when compared to Bitcoin. So if you’re looking to invest or trade in cryptocurrencies, but you want to minimise the volatility, Ether may be right up your alley.  

  

Risk Management when it comes to Ethereum  

Despite the lower volatility levels of Ethereum, it is still a cryptocurrency. This means that unlike more traditional investments like stocks and forex, its price is still quite volatile in comparison.  

So, when trading or investing in Ethereum, it’s essential to employ risk management practices.  

First, only use as much money as you’re willing to lose. This is a basic precept for investing or trading in general, and it applies to Ethereum as well. The price of ETH in 2021 may be high, and it may look like it will continue to rise, but no one can really predict the next price movement.  

Second, diversify. Don’t put all your eggs in one basket. If you want to trade cryptocurrency, make sure to allocate your funds across multiple digital currencies. That way, if the price of one plummets, you still have your holdings in other cryptocurrencies to rely on.  

Third, do your own research. Don’t rely on social media gurus or finance forum posts that tell you when to buy or sell. Cryptocurrency is a fairly new concept, and it’s pretty much still in its infancy stages.   

If you’re investing in ETH, make sure that you understand it, how it works, and what the technology behind it is.  

A good investment is one where you believe in the product you’re investing in.   

While it’s true that no one can really predict how the price of the cryptocurrency will move, it’s much safer to put your money in investments that you’ve done research in instead of just blindly following what you see on social media.  

Finally, make sure to monitor your own physical and mental health while trading cryptocurrency. The markets run 24/7, and you don’t want to be looking at charts all day while ignoring your own well-being.   

Taking care of your mind and body allows you to make better, more rational trading decisions, dramatically reducing the risk.  

Risk management is a fundamental skill that any reasonable investor or trader should have. There are plenty of risks when it comes to ETH and cryptocurrency in general. Risk is unavoidable, so the best thing we can do is to manage and minimize it.  

  

The Future of Ethereum  

Despite cryptocurrency being a new concept and Ethereum being fairly more recent than Bitcoin, its rise in the charts shows that it’s here to stay.  

The main selling point of Ethereum is how its blockchain technology compares to Bitcoin, and with the number of people investing in or trading ETH, it’s clear that there is widespread acceptance and trust for ETH.  

Will ETH keep its place as one of the top cryptocurrencies in the future? The truth is, nobody knows. Governments are still only beginning to recognise and regulate cryptocurrencies, so the future of ETH is, as a whole, uncertain.  

But for some people, that uncertainty is what makes ETH such a good investment. Hopefully, this article has helped get you started on the basics of trading ETH. 

 


22.10.2021 • Stuff that makes you think
Beginner’s Guide to Cryptocurrency Trading [Updated 2021]
Fusion Markets

If you’ve hung around the Internet in the past five years, you’ve probably heard of the term “Bitcoin” or “cryptocurrency” being thrown about. 

But what is cryptocurrency, and how does it work? How is it any different from the money we’ve grown used to over the past century? And how does cryptocurrency trading work?

People are talking about getting rich or blowing away their savings on this new technology, and it’s safe to say that cryptocurrency has taken the finance and tech industries by storm.

If you’re a little unfamiliar with cryptocurrency and you want to see what the hype has been all about, read on to get answers to your questions about cryptocurrency and cryptocurrency trading.

 

What is cryptocurrency?


In simple terms, cryptocurrency is a digital currency. It doesn’t exist in physical form and exists only in the digital world.

The main uses for cryptocurrency are “store of value,” currency, and as a traded item.

Cryptocurrency as a store of value is a fairly simple concept: you buy it and hold on to it while its value increases. This kind of use is why phrases like “investing in cryptocurrency” have popped up.

Since, for some people, the value of cryptocurrency will only increase as it becomes more widely accepted, they see cryptocurrency as more of a speculative investment than a commodity.

Whether or not cryptocurrency is a good investment will remain to be seen in the future, but it’s definitely true that the value of Bitcoin, the most popular cryptocurrency, has skyrocketed in the past years. Although with much volatility along the way to say the least.

As a currency, it works fairly like money, where you can use it to buy goods and services. A decade ago, you could use it to buy things only in the niche areas of the Internet. However, the acceptance of cryptocurrency is spreading more and more, and in some countries like El Salvador, Bitcoin has even become legal tender.

Like our typical currency (called fiat), the value of cryptocurrency also changes constantly. This is why there are markets for cryptocurrency trading available, and we’ll talk about that more later on.

 

What are the most popular cryptocurrencies to trade?


There are plenty of digital currencies around, and the most popular one, Bitcoin, is just one of many. There’s also Ethereum, Stellar, Ripple XRP, and Litecoin, which are some of the most traded cryptocurrencies around.

In more recent news, you’ve probably heard of Dogecoin as well. It’s a more niche meme that has gotten a lot of attention (Thanks, Elon!) as a cryptocurrency for trading, mostly because it saw a sudden increase in trading volume.

There are thousands of different cryptocurrencies out there, which just shows how versatile cryptocurrency is. If you want to trade cryptocurrencies, you can easily do so on platforms like Fusion Markets. These work very similarly to forex markets, where people buy and sell cryptocurrency regularly.

However, if you’re looking to trade cryptocurrency, it’s always important to do your research on which ones are good and which ones are not.

 

Benefits of cryptocurrency trading


For most traders, the biggest benefit of cryptocurrency trading is its novelty. Since cryptocurrency is still in its relative infancy, it has plenty of room to grow, and as it does, many believe that the value will only go higher and higher.

Another benefit is the fact that the cryptocurrency trading market is 24/7. Unlike trading individual stocks between 10am and 4pm (like in Australia), or even 24/5 like Forex, Crypto runs 24/7.

As long as people are willing to buy and willing to sell, the market will always run. This means that you don’t have to wait for market hours if you want to make a trade.

One more thing to note is the volatility. Cryptocurrency is volatile, much more volatile than forex and stocks. The prices of cryptocurrency can rise and plunge in a matter of seconds for seemingly no good reason, and for a lot of people, this volatility brings in a lot of excitement yet is not for the faint hearted.

 

Risk management


Of course, the things that make cryptocurrency trading the most exciting are also the biggest risks.

The volatility of cryptocurrency means that it can plunge just as easily as it rose. In fact, if you look at a price chart of Bitcoin, you’ll see that there have been multiple plunges that caused people to think that it was the end of crypto.

Additionally, the fact that the markets are open 24/7 means that the price can change significantly while you’re away, much like forex trading. It’s on you to make sure that you can trade while maintaining a good work/life balance.

 

Main differences between crypto and forex/fiat


While cryptocurrency is a digital currency, it doesn’t mean it’s the same as the money you have on a wallet such as PayPal.

Fiat currency like the US Dollar or the Euro is backed by physical currency. This means that for every dollar you have on your online account, there’s an equivalent physical form stored somewhere.

In contrast, cryptocurrency is purely digital. There’s no withdrawing it for cash, and the closest you can get is putting it in cold storage wallets instead of keeping it at an exchange, but that’s about it.

One more thing to note is that fiat currency is centralized finance, meaning that it’s regulated by the government that issues it. The US Government regulates and prints the US Dollar, for instance.

On the other hand, cryptocurrency is decentralized finance or “defi.” There’s no particular institution that regulates it. Instead, every single computer that’s on the network, or the “blockchain,” works to validate every transaction that takes place.

Basically, all computers monitor everything instead of trusting one institution (like a government) to do it for everybody. This aspect of cryptocurrency is the most appealing for many people because of its libertarian aspects since it’s free from government or bank control.

Additionally, the decentralized nature of the blockchain makes it so that it’s harder to commit fraud. Since all computers monitor the ledger of transactions, anyone who would want to make a fraudulent transaction would have to defraud all the computers on the blockchain.

That’s a lot of computers across the world.

 

There’s so much more to cryptocurrency, and we’ve barely scratched the surface of the technology behind it. We are witnessing a digital revolution in the making, so if this article has gotten you interested, and if you want to dip your toes in, it’s always best to do a lot of research and practice on a demo account first before spending your hard-earned money.

 


30.09.2021 • Stuff that makes you think
October Holidays 2021
Fusion Markets

Upcoming holidays in October 2021

Chinese National Day is on the 1st of October, followed by Canadian Thanksgiving on the 11th, and finally the Chung Yeung Festival on the 14th. Due to these holidays, there are some changes to our standard market hours. Please take the following changes into account.

Also, note the following changes are based on MT4 server time (GMT+3).

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What does this mean for you?

If you don't trade these particular markets where the hours are being changed, you can continue trading as per normal. However, please note that due to this holiday period, there will be reduced liquidity available, and spreads may widen on some products.

If you do trade these markets, please take note of the session changes so you can manage your position accordingly.


Do I need to do anything?
As mentioned above, there may be wider than usual spreads due to the reduced liquidity so please make sure that your account has been funded sufficiently. Log into your hub here to fund your account.

Questions?
Don’t worry; we’ll still be working around the clock to answer any questions you may have.
Thanks for choosing to trade with us.



28.09.2021 • Market Hours
Power of Identity-based habits for a trader
Fusion Markets

“It takes 21 days to form a habit and 90 days to form a lifestyle”. 


Most of us have probably heard of that quote already. It sounds simple, right? Who would have thought that you only needed three weeks to build a habit? 

Imagine how much better our lives could be after a year with plenty of good habits that we want to adopt.  


Whether you want to improve your physical health or performance in the financial markets, adopting good habits is the way to achieve it. 

Unfortunately, we’ve all heard the not-so-successful stories. A New Year’s Resolution falls off after three days, leading to an initially motivated person being the same as he was a year ago. 


There are 52 weeks in a year. If it takes three weeks to build a habit, you should have formed 17 good habits by then. If only it was that easy! 

 

Why is it important to build habits? 


Your habits are your small, everyday actions and decisions, and the sum of your habits defines your life. 


Good habits form the foundation for a good lifestyle. For example, exercising regularly and getting enough sleep are good habits examples. Conversely, bad habits build up to form a bad lifestyle. Eating junk food every day is an example. 


Who you are and where you are right now is simply the outcome of all your habits. Your overall health is the result of your eating and exercise habits.  

Your trading mindset and your performance in the financial markets are the results of your trading habits. 


You’ll notice that the most successful traders don’t just make good trading decisions; they have good trading habits that form the foundation for their decisions.  
 
But when you’re starting out, we think one simple habit to instill in yourself is one associated with your identity.  

 

What are identity-based habits? 


Identity-based habits are habits that are based on who we are or who we want to be.  

Imagine a circle with two other circles inside it, like an onion with layers. In this case, we have three layers. 


The outermost circle are outcome-based habits. In this circle, we focus on the what. What do I want to do? What do I want to happen? For example, an outcome-based habit could be, “I want to lose 5kg this month.” 


The middle circle is performance-based habits. Here, we focus on the how. So in the same weight loss example, a performance-based habit could be changing your gym routine, your diet, or how often your workout.  


The inner circle, the most important circle, is where identity-based habits are. Here, we focus on the who. Who am I as a forex trader? Who do I want to be? These are purely intrinsically based.  


A person who wants to lose weight would adopt an identity of, “I am a person who moves more,” or “I am a person with a healthy weight and a healthy lifestyle. This is what a healthy person does, so I will do this, too.” 

Identity-based habits go deeper than outcomes and involve your worldview, beliefs, and perception about yourself. 

All three kinds of habits are connected with one another. Your identity influences how you do things. This, in turn, affects what you achieve. 


The problem is, most of us are too concerned with outcomes. As a result, our habits fall off pretty quickly because we didn’t have the foundation. 

Remember the New Year’s resolution example? Those people don’t usually achieve their resolutions because they focus too much on the results when they should be focusing on their identity first. 

Identity goes far beyond just one’s lifestyle. Even politicians revolve their discussions around people’s identities (identity politics). 

Who you identify as affects not just what you do but what you believe in and how you see the world around you. 

 

How does having an identity benefit your trading? 


Having an identity forms a solid foundation for your actions and your habits. 

Imagine two forex traders with a fair amount of trading experience. For September, they set a target profit: $5,000. 

The first trader does not have an identity; he just cares about the outcome. He looks at the $5,000 profit goal and focuses only on that. He analyzes each trade carefully, but there is no real consistency to it.  


He gets frustrated every time forex trading results in a loss because it makes it harder to achieve his desired outcome. 

On the other hand, the second trader has an identity. He identifies as a good forex trader. The $5,000 goal profit is not the real goal because he knows that it’s something that good forex traders have. 


Instead, he focuses on being a good forex trader. He asks himself, “I am a good forex trader, and what does a good forex trader practice?” 

From here, he studies not just the financial markets but also the best traders. He adopts a good trading mindset and trading psychology and starts to build trading habits. He does this not because he wants to earn a $5,000 profit but because he wants to identify with what a ‘good’ forex trader does, he thinks more in terms of systems than outcomes.  


Who do you think will be more likely to reach their target? 


Of course, it’s trader #2. He goes beyond focusing on the outcomes. He actually lays the foundation by building good habits and adopting the proper trading mindset. He does all this because he has an identity, something which trader #1 does not have. 

 

Building identity-based habits for traders 


To build identity-based habits, the first thing you should do is look inward. Don’t worry about outcomes just yet. 

Instead of asking yourself, “What do I want?” You should ask yourself, “Who am I?” or “Who do I want to be?” 

Instead of focusing on a target profit, start with your identity. 


Do you want to be a successful forex trader? What do these people do that you can? 

Successful forex traders usually keep a journal to track their successes and failures. They also keep a balanced lifestyle, are aware of their biases, get enough sleep, and adapt to change. There are plenty of other habits, but these examples are good for a start. 


The best thing you could do if you’re starting out as a forex trader and reading this is to constantly ask yourself “What would a good forex trader do right now”? Would they be learning more about the markets or practicing on a demo or would they be watching Netflix? Simple questions to ask but the power of your life is determined by the power of the questions you ask yourself.  


It would be good to adapt all these too, but remember you’re not adopting these habits because of what you want. You’re adapting these habits because of who you are. 


Identity-based habits last longer and lead to more success because they involve a deeper part of you.  


When you inevitably encounter setbacks and make mistakes, you won’t get too frustrated with yourself and make emotional, impulsive decisions because you know that your habits are in the right place. 


10.09.2021 • Stuff that makes you think
September Holidays 2021
Fusion Markets

Upcoming holidays in September 2021

We have Labor Day in the United States on the 6th, followed by Mid-Autumn Festival on 22nd September. Due to these holidays, there are some changes to our standard market hours. Please take the following changes into account.

Also, note the following changes are based on MT4 server time (GMT+3).

undefined


What does this mean for you?

If you don't trade these particular markets where the hours are being changed, you can continue trading as per normal. However, please note that due to this holiday period, there will be reduced liquidity available, and spreads may widen on some products.

If you do trade these markets, please take note of the session changes so you can manage your position accordingly.


Do I need to do anything?
As mentioned above, there may be wider than usual spreads due to the reduced liquidity so please make sure that your account has been funded sufficiently. Log into your hub here to fund your account.

Questions?
Don’t worry; we’ll still be working around the clock to answer any questions you may have.
Thanks for choosing to trade with us.

 



01.09.2021 • Market Hours
Your New Secret Trading Weapon: Sleep
Fusion Markets

Sleepless nights are a common predicament for most traders. It is the only time you are not consciously screening the markets. As stressful as it can be to sleep with volatile open positions, it is extremely important that you beat the urge to make impulsive moves and that you give your brain some rest.


Since the forex markets run 24/5, most people barely get enough sleep while the markets are open. But this kind of lifestyle will ultimately lead you to make sub-optimal biased trading decisions.


Depending on which part of the world you’re in, the markets might move the most while you should be asleep. For those here in Australia, we are sleeping while the US is in their trading day, which, when you have large open positions active in the market, can make it even more difficult to get a good sleep.


But here’s the thing most traders are not thinking about. Getting a good night’s sleep every day is just as crucial as your fundamental and technical knowledge. Still, many of us tend to overlook a good rest, thinking we can survive on far less than we need. Let’s look at why sleep is essential for forex trading and how to cultivate a good sleep routine.

 

Why is sleep important for traders?

Sleep plays a big part in our mental wellness, which then affects our decision-making for the day.When you’re placing trades that involve vast amounts of money along with prices that change every second, you want the part of your brain that makes decisions (the pre-frontal cortex, if we’re being precise) to be in tiptop shape.


Ask any elite athlete what one of the most essential tools they have for recovery is, and it’s often sleep. Lebron James, for example, reportedly sleeps as much as 10 hours a night. Now I know what you’re thinking, “Well, I’m not an elite athlete and I’m certainly not Lebron”. But you are trying to obtain peak (trading) performance, right?


Trading involves competent risk management. Before you execute those trades, you want to have a clear picture of the risks and benefits so that you can make calculated and well-informed decisions. When you don’t allow your body and mind to rest well, your practical decision-making is overshadowed by restless behavior patterns.


Basically, good sleep keeps you sharp and productive. On the other hand, studies show that lack of sleep tends to impair decision-making involving complex factors and unexpected occurrences, which occurs quite a lot when the markets are open. By having good sleep regularly, you allow your brain to make unimpaired decisions compared to when you are sleep-deprived.


And speaking of the brain…  

What’s the science behind it?


First, let’s look at what goes on in your brain when you sleep.

Throughout the day, when you’re awake, the brain accumulates metabolic waste. You don’t even have to exercise or move around to accumulate it. Your body already expends energy by just keeping your basic functions running, like breathing and pumping blood.


In using energy, metabolic waste builds up in various parts of your body, your brain included. In time, the buildup can interfere with the peak functions of your brain. When you sleep, your brain sees the perfect opportunity to do some house cleaning. The brain has a built-in waste removal system which is called the glymphatic system.

Sure, the glymphatic system also works while you’re awake, but the cleanup process is at least twice as fast when you’re asleep. This is because your brain knows that there’s not much going on in your body, which allows it to focus on clearing up.


This is why you always feel refreshed and focused when you wake up after a good night’s sleep. And since mental wellness plays a huge part in your trading psychology and your trading mindset, you always want to be in this “clear” state whenever you’re trading. When you’re sleep-deprived, the part of your brain in charge of your fight or flight reactions — the amygdala — is far more stimulated than it would be when you’ve had a normal amount of sleep.


What does this mean for you as a trader?


Well, try to go back to the last time your fight or flight reaction (or amygdala hijack) got triggered. Maybe you were in a disagreement with a colleague or a friend, or you were in an emergency. Wasn’t it hard to stay focused because you felt like a thousand things were going on at once? Now think about how you feel when you’re sleep-deprived and a trade isn’t going your way and a new announcement means you need to think about the implications and what’s next for the market. Are you at your best cognitively at this point? Probably not.


A stimulated amygdala makes it hard to make logical decisions. It also cuts off access to your pre-frontal cortex, which is in charge of making logical decisions. And as forex traders, our trading mindset should always be governed by logical, not emotional, decisions.


Unfortunately, your brain is more likely to go into fight or flight mode with a lack of sleep. You aren’t thinking or seeing the market clearly. Maybe you’re paranoid about your trade, or you see things that aren’t there, or maybe you enter or exit the trade too early.
  

How does a good night’s sleep benefit your trading?

A good night’s sleep gives you good preparation for the trades you’ll be making the next day. Your brain is clearer, and your mind is sharper. When you look at the charts, you’ll be less likely to be influenced by sudden price fluctuations, which we know are all too common in financial markets, particularly in forex trading.


By consistently making good forex trading decisions, you’re more likely to see bigger gains in your trades.


In fact, one study  suggested that sleep-deprived forex traders had relatively lower returns because their decision-making skills were affected.


A good night’s sleep also promotes a healthy work-life balance. You may be a forex trader, but it’s also important to look into your personal health outside the financial markets. You feel more energized and alert when you are awake, allowing you to see new opportunities in the market that an otherwise tired trader might not. This could be your edge.  


Tips for sleeping better

Now that we’ve talked about why sleep is important, let’s talk about developing good sleeping habits.

First, reduce your screen exposure before bedtime. Blue light keeps our brains alert, and this is the kind of light that you usually see from your phones and your living room lights.


Put the phone down and shut off your computer. As hard as it is, that will mean trying to keep your eyes off the charts. Try having herbal tea (Peppermint, chamomile is best for relaxing), reading a physical book (to avoid more screentime), or doing something that relaxes you to get your brain ready for bed. If you really must check your phone or computer late at night, try using apps that make the screen appear “warmer,” giving it an orange tint or via “dark mode” starting from a couple of hours before your bedtime.


Orange lighting is less harsh compared to blue light, which makes it easier to eventually fall asleep.

Second, if you can afford it, separate your workspace from your bedroom. You want your brain to associate your bedroom with rest and relaxation so that as soon as you walk into the bedroom, your brain “gets” it and starts powering down. Playing on your phone or laptop in bed is likely confusing your brain.


Third, keep your room to a cool temperature. Ideally, between 18-20 degrees Celsius.


Finally, one of the worst things you can do is get up and check your phone or computer for what’s happening in the market. The screentime on your eyes, the adrenaline rush, and more will only cause you to make an emotional decision.


If it makes you feel better, a stop-loss or a take profit takes a lot of the unknowns out of the equation. Your trade will either have one of three things happen: It’s still open, it’s been closed with profit, or closed with a loss. By leaving the outcome to the market, you are more likely to think too heavily about it all through the night.


Forex trading is not all about the technical and analytical aspects. A sound body complements a sound mind. You should take care of both aspects to make sure you are at your best. In our view, a well-rested trader will likely exceed a sleep-deprived trader that’s not at peak cognitive performance.

26.08.2021 • Stuff that makes you think
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