If you engage in crypto trading, you must have come across the R1 protocol. This is an innovative way to make order-matching and settlement separate so that trade efficiency can be enhanced. Therefore, R1 protocol can benefit users and enhance their trading experiences by allowing R1-based exchanges to share their order data.
As of now, Bithumb and Rootrex are the two exchanges which have access to R1 protocol. Relay refers to the order relay and the R1 protocol’s off-chain part is deployed by Relayer. This collects the orders from users and submits these to the chain for their settlement after the matching.
All you need to know about crypto trading:
Crypto trading refers to the practice of speculating on crypto prices through CFD accounts or the act of buying and selling cryptos through exchanges. CFDs let you speculate on price movements but you do now own the coins. So, you can “buy” or go long when you feel prices will escalate or “sell” if you feel they will fall. Alternately, you can buy and sell coins through a cryptoexchange. Here, you can buy the coins after creating an exchange account and providing verification for your personal ID. You can store coins in a digital wallet until the time you sell them. Exchanges can have different features and limitations; some may impose limits on the amount you can deposit, some may charge very high transfer fees, etc.
Things you need to know when trading:
- Spread: It is the difference between buying and selling prices for a crypto. When you want long position you start trading at the “buy” price which is usually above market price. If you wish to open short position, you start trading at the “sell” price.
- Lots: This refers top batches of tokens for standardizing trade sizes. Since cryptos are volatile, a lot is typically small. But there are cryptos that trade in bigger lots.
- Leverage: It is the way to get exposure to large volumes of crypto without paying your trade’s total value upfront. So, you deposit a small amount called margin; when you close leveraged positions, your losses or profits depend on the trade size. Leverage has risks of losses; so it is important to have a risk-management plan.
- Margin: It is crucial to leverage trading and refers to the initial deposit that you make to open a position.
- Pips: These are units to measure price movements in the crypto world. Usually, the valuable cryptos are traded at dollar level but some low-value cryptos can be traded using other scales. Here, the pip may even be fraction of a cent.
You can buy cryptos through an exchange. Here, you may use fiat currency to buy cryptos, store them in wallets and trade different cryptos that the exchange offers. But using exchanges is also risky as they are vulnerable to cyber security threats and hacking attempts. So, it is important to research about the exchanges before signing up. You need to take into account trading fees, withdrawal and deposit fees, and most importantly, security measures before making a decision.