Wei is the smallest amount of ethereum coin. One ethereum coin is worth 1 quintillion (1,000,000,000,000,000,000) wei.
DEFINITION of 'Wei'
Wei is the smallest denomination of ether, the cryptocurrency coin used on the Ethereum network. 1 Ether = 1,000,000,000,000,000,000 Wei (1018)
BREAKING DOWN 'Wei'
As the prices of various cryptocurrencies, including ether,
have skyrocketed during the last year, transaction sizes have become
smaller.
To correctly denote the quantity of transactions which may appear a
very small fraction in terms of ether but a high value when converted to
U.S. dollars or other real world currency, new units have been created
to correctly identify and support the transactions.
Wei is named after Wei Dai, a cryptography activist who is known for
supporting widespread use of strong cryptography and privacy-oriented
technologies.
Weak Hands: is defined as an investor who doesn’t have the confidence to continue owning his investment during troubled times.
A wise investor creates a plan for his investment before buying.
He strategically decides when to buy and when to sell.
Weak Hands: describes someone who gets nervous and sells the investment before their plan can be completed.
Weak Hands: are often identified as people who sell as soon as the value of an investment drops in price.
Weak Hands,
What are 'Weak Hands:':
In the financial trading market places, investors, and traders have "Weak Hands" when:
They lack the conviction to stick with an investing or trading plan.
They lack the resources to carry them out.
This may manifest into a futures trader that never intends to take or provide delivery of the underlying commodity or index.
However, Weak Hands similar to refers to an investor or trader who can quickly exits a trade on almost any detrimental news or a break from an obvious technical pattern on the charts.
Research Similar Terms:
Weak Shorts
Technically Weak Market
Desk Trader
Selling Into Strength
BREAKING DOWN 'Weak Hands':
A Futures Trader with Weak Hands is a speculator, and profiled as a small speculator that enters and exits positions with the intention of reversing those positions before expiration.
Typically, a trader without financial resources associated with delivery and storage of the underlying commodity targeted market.
Weak Hands investors and traders exhibit predictable behavior.
This includes buying immediately after the market breaks out to the upside from a technical pattern on the charts or selling immediately after the market breaks to the downside.
Dealers and institutional traders exploit this behavior by buying when Weak Hands traders sell and selling when Weak Hands traders buy.
This forces the Weak Hands out before the market starts to move in the originally desired direction.
Common problem for investors and traders is buying or selling at the very worst time.
Example:
When bear market nears its end may signature losses for those who hodl, (Hold On For Dear Life), as the market falls. This maximum fear becomes the driving-force in people's minds and weakens them.
Sentiment is an extreme for bearishness and Weak Hands is fear.
Strong Hands see the opportunity.
Strong Hands can buy when prices dips, because they have resources for the draw-down.
Bear markets are relatively infrequent as an example of Weak Hands when stocks with solid fundamentals and chart patterns falls with stocks of a related company issuing bad news on earnings or some other business event.
Weak Hands quickly sell, but the stock rebounds sharply.
There was nothing wrong with these stocks and the price dip resolves into a buying opportunity.
A wallet is defined as software that interacts with the blockchain and lets users receive, store, and send their digital money.
Blockchain wallets don’t actually store the money, instead they lock away access.
The only way to get access to the money is by providing a key, a string of letters and numbers like a password.
Cryptocurrency Wallet Step-By-Step Tutorial:
Use this a guide about cryptocurrency wallets, how they work and which ones are the best on the market.
What is a Cryptocurrency Wallet?
A cryptocurrency wallet is a software program that stores private and public keys and can interacts with various blockchains to enable users to send and receive digital currency and monitor their balance.
If you want to use a single cryptocurrency, such as, Bitcoin or any other cryptocurrency coin, you will need to have a digital wallet.
Cryptocurrency Wallet: How do they work?
Countless of sentient beings use cryptocurrency wallets, and there is a common considerable misunderstanding about how they work.
Unlike traditional ‘pocket’ wallets, digital wallets do not store currency.
Currencies do not get stored in any single location or exist anywhere in any physical form.
All that exists are records of transactions stored on the blockchain stores in a cryptocurrency wallet.
Cryptocurrency wallets are software programs that store your public and private keys and interface with various blockchain so users can monitor their balance, send money and conduct cryptocurrency transactions and other operations.
When a person sends you digital currency, like bitcoin, they are essentially signing off ownership of the coins to your wallet’s address.
To be able to spend those coins and unlock the funds, the private key stored in your wallet must match the public address the currency is assigned to.
If public and private keys match, the balance in your digital wallet will increase, and the senders will decrease accordingly by transaction.
There is not actual exchange of real green-back coins currencies.
The transaction is signed by transaction record on the blockchain and a change in balance in your cryptocurrency wallet is accumulated.
What are the different types of Cryptocurrencywallets(?):
There are several different types of wallets that provide ways to store currencies and access your digital coins.
Wallets can be broken down into three distinct categories:
Software.
Hardware.
Paper.
Remember that Software Wallets can be:
On a Desktop hard-drive/HDD/SSD/USB.
Inside of a Mobile Phone.
On a remote Server Online.
The Desktop:
The desktop Wallets are downloaded and installed on a PC or laptop. They are only readable as a file and accessible from your own single computer in which you downloaded your wallet onto. Desktop wallets offer one of the highest levels of security however if your computer is hacked or gets a virus there is the possibility that you may lose all your funds.
The Online Storage Wallet:
Online Wallets run on the cloud and are accessible from any computing device in any location.
Online wallets might be convenient to access, online wallets store your private keys online and are controlled by a third party which makes them more vulnerable to hacking attacks and theft.
Mobile Cell-Phone Storage:
Mobile Cell-Phone Storage SSD device wallets runs on an app within your phone.
SSD's are useful because they can be used anywhere including retail stores. Mobile wallets are much smaller, more simplified provide you are Cell-Phone friend.
A Hardware Wallet:
A Hardware wallet is different from a software wallets that in a hardware wallet method stores user’s private keys on a hardware device like a USB.
Hardware wallet transactions online are easier, they are stored offline on the hand held device which delivers increased security provided you are not absent minded.
Hardware wallets compatibility with several web interfaces and can support different many to unlimited currencies, (regards this current date of: Sept-7th-2018).
This all depends on which one of the cryptocurrency coins you decide to use and engage into exchanges via transactions with others.
Making Hardware Transaction is easier:
Hardware Wallet Transactions with USB-wallet simply connect their device to any cell-phone or internet-enabled computer or other devices via USB connection, and-or Bluetooth, next - enter a pin, then - send currency and then wait for confirmation of transaction(s).
Hardware wallets make it possible to easily transact while also keeping your money offline and away from dangerous and riskey hacker second parties.
The-Paper:
The paper wallet is easy to use and provide a very high level of security. While the term paper wallet can simply refer to a physical copy or printout of your public and private keys, but there remains a security risk if the paper stolen.
This, (Paper-Wallet), can also refer to a piece of software that is used to securely generate a pair of keys which are then printed.
Using a Paper-Wallet is relatively straightforward and simple minded approach.
Transferring Bitcoin or any other currency to your Paper-Wallet is accomplished by the transfer of funds from your software wallet to the public address shown on your Paper-Wallet.
Alternatively, if you want to withdraw or spend currency, all you need to do is transfer funds from your Paper-Wallet to your Software-Wallet.
This process, often referred to as ‘sweeping,’ can either be done manually by entering your private keys or by scanning the QR code that is printed on paper upon piece of paper known as a Paper-Wallet.
And... remember always, that a paper wallet is only as secure as your hiding place; where it is stored and kept hidden.
Are Cryptocurrency Wallets Secure(?):
Wallets are secure to varying degrees and this depends how you intelligently manage your wallet.
Wallet security level is importantly depends on the type of wallet you use (1.desktop, 2.mobile, 3.online, 4.paper, 5.hardware) and then provided that your online-service is not a hack job, or exploited/hacked then you are safe.
A secure web server storage is an intrinsically riskier environment to keep your currency compared to offline.
Online-Wallets:
The Online walletscan expose users to possible vulnerabilities in the wallet platform and not being compressed into a file-encraypted, and a wallet placed can be easily exploited by hackers on an exchange, because they do not encryption a wallet into a file with password.
Exchanges are very dangerous to place your wallet on, because hackers can steal your cryptocurrency funds if and when kept on exchanges rather than another more secure storage-service(s) and or location(s).
Offline wallets, on the other hand, cannot be hacked because they simply aren’t connected to an online network and don’t rely on a third party for security, but a piece of paper can be stolen as well, so security is prime directive unconditional.
Although online wallets have proven the most vulnerable, (via exchanges), and prone to hacking attacks, diligent security precautions need to be implemented and followed when using any wallet.
Wallet Rules of use, losing your private keys will lead you to lose your money.
When your wallet gets hacked, or you send money to a scammer, there is no way to reclaim lost currency or reverse the transaction. You must take precautions and be very careful!
Backup your wallet:
Store no amounts of currency for everyday use online is the best security option, otherwise you risk being hacked.
You can store your wallet on a computer or mobile device, but this resolves a risk as well.
keeping your funds in a highly secured environment.
Cold or offline storage options for backup like Ledger Nano or paper or USB will protect you against computer failures and allow you to recover your wallet should it be lost or stolen.
No-One Protects You against eager hackers with decryption penetration technics breaking your code. The reality is, if you choose to use an online/offline wallet(s) there are inherent risks that can’t always be protected again
Update software:
Keep your wallet software up to date so that you have the latest security enhancements available. You should regularly update not only your wallet software but also the software on your computer or mobile.
Add extra security layers:
The more layers of security, the better.
Setting long and complex passwords and ensuring any withdrawal of funds requires a password is a start.
Wallets that have a good reputation and provide extra security layers like two-factor authentication and additional pin code requirements every time a wallet application gets opened.
Consider a wallet that offers multisig transactions like Armory or Copay. A multisig or multi-signature wallet requires the permission of another user or users before a transaction can be made.
Multi-currency or single use(?):
Bitcoin is a popular digital currency, and there is hundreds of new cryptocurrencies, (referred to as altcoins), have emerged.
If you’re interested in using a variety of cryptocurrencies, the good news is, you don’t need set up a separate wallet for each currency.
Alternative to cryptocurrency wallet that supports a single currency, it may be more convenient to set up a multi-currency wallet which enables you to use several currencies from the same wallet.
Are there any transaction fees(?):
Transaction fees are a tiny fraction of traditional bank fees.
Sometimes fees need to be paid for certain types of transactions to network miners as a processing fee, while some transactions don’t have any fee at all.
It is also possible to set your own fee.
As a guide-line rule, the median transaction size of 226 bytes would result in a fee of 18,080 satoshis or $0.12. In some cases, if you choose to set a low fee, your transaction may get low priority, and you might have to wait hours or even days for the transaction to get confirmed.
A needed transaction completed and confirmed promptly is when you must inact an increase the amount you’re willing to pay to remain secure.
The wallet you end up using, transaction fees are not something you should worry about. You will either pay minuscule transaction fees, choose your own fees or pay no fees at all.
A definite improvement from the past!
Are cryptocurrency wallets anonymous(?):
Wallets are pseudonymous, and this is a golden rule.
Wallets are not tied to soveriegn identitions of a user and the transactions are stored publicly and permanently on the blockchain.
Your personal residence information will not be in your wallet, and-or the data that could be traced to your identity in a number of ways.
Making anonymity and privacy easier to achieve, there are obvious downsides to full anonymity if you do not know enough about this topic and there are many safeguards initiations that must be acted upon firstly; learn and be your own Jedi-master and no other.
The "Dark-Wallet-Project" is a needed resource that is looking to beef up privacy and anonymity through stealth addresses and coin mixing.
Which Cryptocurrency wallet is the best(?):
List of options and opertunities to improve your security is never ending as the market evolves, and exploiter-hackers learn new penetration techniques.
Before picking a wallet, you should, however, consider how you intend to use it.
Needing a wallet for everyday purchases or just buying and holding digital currency for an investment?
Do you plan to use several currencies or one single currency?
Requiring access to your digital wallet from anywhere or only from home is a decision of importance.
Think clearly and wisely regards your assess your requirements and then choose the most suitable wallet for you.
Cryptosteel is the highly rated metal wallet made of "100% AISI 304 stainless steel".
This Cryptosteel is the best option for the easiest to use and most hassle-free metal seed wallets on the market as of date; Spet-07-2018.
The Cryptosteel Wallet is rugged with features include being fireproof up to 1200°C (2100°F), waterproof, and shockproof.
This solid The Cryptosteel Wallet is double-sided and holds 12 words per side.
It actually holds only the first four letters of each word but that is all you need for the BIP39 specification.
The The Cryptosteel Wallet comes with metal letter tiles that slide securely into the wallet for an easy method to record your seed phrase.
When the The Cryptosteel Wallet is in its closed position, the wallet has a hole that can accommodate a padlock or anti-tampering tag (just keep in mind a padlock can be easily picked or cut off).
The Cryptosteel Wallet website offers several versions for other forms of private keys and passwords.
Those using a 12 to 24 word seed phrase should choose the Cryptosteel MNEMONIC wallet.
The ColdTi titanium wallet is a more affordable alternative for a metal seed storage wallet.
The metal titanium has higher melting point than stainless steel in excess of 1650°C (3000°F) and it is rust proof.
This ColdTi titanium wallet includes (1). two titanium plates, (2). 24 spaced words each, (3). two binding post sets, a (4). uniquely numbered holographic stickers to seal the wallet, and (5). Provides a tampering indicator.
The downside to this wallet is the time consuming use of the Cryptosteel.
The ColdTi titanium wallet space needed to engrave or stamp the seed words into the titanium plates is time consuming.
ColdTi titanium wallet Owners have reported that the wallet includes numerical stamp tools, and not letter stamp tools.
This provides recovery record phrase you will need to convert your "seed "words to "seed numbers", which you can do at this site: Click Here.
Another ColdTi titanium wallet alternative is to buy letter stamps or an engraving tool separately.
Crypto-Users have reported difficulty with stamping the titanium plates. See this video for tips, ideas, and cryo-diration.
The "Blockplate" is a simple "ANSI 304 Stainless Steel" option that includes two plates that can record 12 recovery words each (6 words per side).
Rather than using number or letter stamping bits, the Blockplate uses a single center punch tool to indicate the order of the letters (labeled on the plate) for each word.
For an additional layer of protection you can keep each plate with half of the seed phrase in separate locations so that if one plate is compromised it can’t be used to recover your private key without the other plate.
The Billfodl Stainless Steel Wallet has the same stainless steel design as the Cryptosteel.
Advantages of the Billfodl Stainless Steel Wallet is that it comes with more tiles than the basic Cryptosteel MNEMONIC model which only comes with capital letters.
All Billfodl Stainless Steel Wallet includes over 350 tiles with capital and lowercase letters, numbers, and blanks.
Billfodl Stainless Steel Wallet allows you to support alphanumeric or hexadecimal keys in addition to the 12-24 word seed phrase.
Advanced well designed Billfodl Stainless Steel Wallet is made of 316 stainless steel versus the more common 304 type seen in other metal storage wallets.
The Billfodl Stainless Steel Wallet and it's 316 stainless steel quality is more corrosion resistant against chlorides like seawater.
This Billfodl Stainless Steel Wallet also sells accessories on its website like the Fodl Hodler hiding mount and tamper-proof stickers.
Safe Seed MNEMONIC Crypto Currency Wallet Recovery Metal Backup Kit:
The Safe Seed copper metal wallet is an all-in-one solution with a mid-range price that includes two copper plates and stamping tools to record your recovery seed phrase. Copper has a slightly lower melting point than stainless steel and will not rust, so it’s probably a decent option. Unfortunately there is not much information available on this wallet.
Bread Wallet:
A Bread Wallet is a simple mobile Bitcoin digital wallet that makes sending bitcoins as easy as sending an email.
The Bread Wallet can be downloaded from the App Store or Google Play.
All the Bread Wallet offers a standalone client, were-by, there is no server to use when sending or receiving bitcoins, is great.
That means users can access their money and are in full control of their funds at all times.
Regardless in Overall scheme, Bread Wallet’s are a clean interface, lightweight design and commitment to continually improve security, make the application safe, fast and a pleasure to use for both beginners and experienced users alike.
Pros: Good privacy & security, beginner friendly, simple & clean, open source software, free.
Cons: No web or desktop interface, lacks features, hot wallet.
Mycelium:
Advanced users searching for a Bitcoin mobile digital wallet, should look no further than mycelium. The Mycelium mobile wallet allows iPhone and Android users to send and receive bitcoins and keep complete control over bitcoins. No third party can freeze or lose your funds! With enterprise-level security superior to most other apps and features like cold storage and encrypted PDF backups, an integrated QR-code scanner, a local trading marketplace and secure chat amongst others, you can understand why Mycelium has long been regarded as one of the best wallets on the market.
Pros: Good privacy, advanced security, feature-rich, open source software, free.
Cons: No web or desktop interface, hot wallet, not for beginners.
Exodus:
Exodus is a relatively new and unknown digital wallet that is currently only available on the desktop. It enables the storage and trading of Bitcoin, Ether, Litecoins, Dogecoins and Dash through an incredibly easy to use, intuitive and beautiful interface. Exodus also offers a very simple guide to backup your wallet. One of the great things about Exodus is that it has a built-in shapeshift exchange that allows users to trade altcoins for bitcoins and vice versa without leaving the wallet.
Pros: Good privacy & security, beginner friendly, intuitive, easy to use, in-wallet trading, supports multiple currencies, open source software, free.
Cons: Hot wallet, no web interface or mobile app.
Copay:
Created by Bitpay, Copay is one of the best digital wallets on the market. If you’re looking for convenience, Copay is easily accessed through a user-friendly interface on desktop, mobile or online. One of the best things about Copay is that it’s a multi-signature wallet so friends or business partners can share funds. Overall, Copay has something for everyone. It’s simple enough for entry-level users but has plenty of additional geeky features that will impress more experienced players as well.
Pros: Good privacy & security, multisig transactions, multiple platforms & devices, multiple wallet storage, beginner friendly, open source software, free.
Cons: Can be slow & unresponsive, limited user support.
Jaxx:
Jaxx is a multi-currency Ether, Ether Classic, Dash, DAO, Litecoin, REP, Zcash, Rootstock, Bitcoin wallet and user interface. Jaxx has been designed to deliver a smooth Bitcoin and Ethereum experience. It is available on a variety of platforms and devices (Windows, Linux, Chrome, Firefox, OSX, Android mobile & tablet, iOS mobile & tablet) and connects with websites through Firefox and Chrome extensions. Jaxx allows in wallet conversion between Bitcoin, Ether and DAO tokens via Shapeshift and the import of Ethereum paper wallets. With an array of features and the continual integration of new currencies, Jaxx is an excellent choice for those who require a multi-currency wallet.
Pros: Good privacy & security, Multi-currency, wallet linking across multiple platforms, great user support, feature rich, user-friendly, free.
Cons: Code is not open source, can be slow to load.
Armory:
Armory is an open source Bitcoin desktop wallet perfect for experienced users that place emphasis on security. Some of Armory’s features include cold storage, multi-signature transactions, one-time printable backups, multiple wallets interface, GPU-resistant wallet encryption, key importing, key sweeping and more. Although Armory takes a little while to understand and use to it’s full potential, it’s a great option for more tech-savvy bitcoiners looking to keep their funds safe and secure.
Pros: Good privacy, great security features, multi-signature options, solid cold storage options, free.
Cons: Only accessible via the desktop client, not for beginners.
Trezor:
Trezor is a hardware Bitcoin wallet that is ideal for storing large amounts of bitcoins. Trezor cannot be infected by malware and never exposes your private keys which make it as safe as holding traditional paper money. Trezor is open source and transparent, with all technical decisions benefiting from wider community consultation. It’s easy to use, has an intuitive interface and is Windows, OS X and Linux friendly. One of the few downsides of the Trezor wallet is that it must be with you to send bitcoins. This, therefore, makes Trezor best for inactive savers, investors or sentient human beings who want to keep large amounts of Bitcoin highly secure.
Pros: Good security & privacy, cold storage, easy to use a web interface, in-built screen, open source software, beginner friendly.
Cons: Costs $99, must have device to send bitcoins.
Ledger Nano:
The Ledger Wallet Nano is a new hierarchical deterministic multisig hardware wallet for bitcoin users that aims to eliminate a number of attack vectors through the use of a second security layer. This tech-heavy description does not mean much to the average consumer, though, which is why I am going to explain it in plain language, describing what makes the Ledger Wallet Nano tick. In terms of hardware, the Ledger Wallet Nano is a compact USB device based on a smart card. It is roughly the size of a small flash drive, measuring 39 x 13 x 4mm (1.53 x 0.51 x 0.16in) and weighing in at just 5.9g.
Pros: Screen/device protected by metal swivel cover.
Multi-Currency support.
3rd-Party apps can run from device.
U2F support.
When recovering wallet from seed, the whole process can be done from the device without even connecting it to a computer!
Fairly inexpensive (~$65+ USD).
Cons: Not as advanced wallet software (no transaction labeling).
No ability to create hidden accounts.
No password manager
Green Address:
Green Address is a user-friendly Bitcoin wallet that’s an excellent choice for beginners. Green Address is accessible via desktop, online or mobile with apps available for Chrome, iOS, and Android. Features include multi-signature addresses & two-factor authentications for enhanced security, paper wallet backup, and instant transaction confirmation. A downside is that Green Address is required to approve all payments, so you do not have full control over your spending.
Cons: Hot wallet, average privacy, the third party must approve payments.
Blockchain (dot) info:
Blockchain is one of the most popular Bitcoin wallets. Accessing this wallet can be done from any browser or smartphone. Blockchain.info provides two different additional layers. For the browser version, users can enable two-factor authentication, while mobile users can activate a pin code requirement every time the wallet application is opened. Although your wallet will be stored online and all transactions will need to go through the company’s servers, Blockchain.info does not have access to your private keys. Overall, this is a well-established company that is trusted throughout the Bitcoin community and makes for a solid wallet to keep your currency.
Pros: Good security, easy to use web & mobile interface, well-known & trusted company, beginner friendly, free.
Cons: Hot wallet, weak privacy, third party trust required, has experienced outages.
Trading Volume is the number assets (stocks, currency, etc.) being bought and sold over a period of time. Volume can be separated into “buy volume” (also known as “ask volume”) and “bid volume” (also known as “sell volume”).
Because assets are bought and sold by many thousands of investors, there isn’t a single price, instead there’s a range of prices:
Some sellers hope to sell quickly at $5,000 and others hope to sell more profitably at $6,000.
Some buyers hope to buy immediately at $5,000 and other buyers hope to buy more affordably at $4,000.
When an asset has a lot of buy volume also known as ask volume, it means there are many, many buyers who want to purchase and are will to pay high prices. They will start purchasing at the lowest selling price, followed by the next higher selling price, followed by the next higher selling price, followed by the next higher… In other words, a lot of buy/ask volume results in higher prices.
When an asset has a lot of sell volume also known as bid volume, it means there are many, many sellers who are willing to sell at low prices just to get rid of their assets. They will start selling at the highest purchasing price, followed by the next lower purchasing price, followed by the next lower purchasing price, followed by the next lower… In other words, a lot of sell/bid volume results in lower prices.
UNDERSTANDING CRYPTOCURRENCY TRADING VOLUME
Along with circulating supply and market capitalization, volume is one of the most prominent metrics in crypto. Within our premium, members-only Coinist Insiders Network, our job is to identify early stage cryptocurrencies with a high probability for success before there is any retail hype around them. We look at a coin’s trading volume before we decide to shortlist a project for further analysis. Below we’ll break down why trading volume is such an important metric when analyzing cryptos and how it can help you show a coin’s direction.
The volume of a token listed on CoinMarketCap is quite simple. It’s the amount of the coin that has been traded in the last 24 hours. For example, roughly $3.5 billion worth of Bitcoin has changed hands in the last day. You can break this down in a variety of ways; you could also list it as 3,039,787,668 Euros. Or, in crypto terms, 642,566 Bitcoins. You can also slice and dice it by exchange. In the last 24 hours, roughly 14.97% of all Bitcoin traded moved through Bitfinex, where the price is $5514 as of writing. Essentially, volume underscores how many people are buying and selling the coin. If the price of Bitcoin goes up and it shows a hefty volume, that tells us lots of people are making moves. Thus, it will likely keep going up. If the price of Bitcoin drops, but there’s minimal volume, that could tell us only a small amount of people back the trend. Let’s go into more detail on the ramifications.
Volume is arguably the most important metric for a cryptocurrency, because of the amount of ways it can be broken down. From volume, you can infer the direction and movements of a coin. It’s an essential metric for traders. Volume can examined in minute detail. You can track volume on CoinMarketCap by the last 24 hours, last week, or last 30 days. This helps reveal if a coin’s recent swings are an aberration or the norm. A coin with frequent heavy movements won’t attract attention if it has high volume. If a coin normally has less volume, heavy trading in the last 24 hours could indicate there’s some support behind the move it may be making.
You can also examine which exchanges had what volume. This matters because exchanges frequently have different prices. As well, many exchanges are geographically-focused. Kraken, for instance, is largely a European exchange. OKCoin functioned in China until the People’s Bank of China cracked down recently. Volume by exchange can reveal where the buyers or sellers of a coin are. CoinMarketCap does not, however, reflect exchanges with no fees. Exchanges that don’t charge a fee allow traders and bots to send coins back and forth for free, imitating a high volume.
Generally, the biggest and most popular coins are traded the most. If you sort by volume on CoinMarketCap, the top three coins are Bitcoin, Etherum, and Ripple, also the three largest market caps. No surprises there. But if you slide down a bit, you’ll see MonaCoin, a lesser-known currency, having higher trading volume than big names like Neo and Dash. MonaCoin isn’t much talked about, but it’s seen a remarkable 86.97% change in the last 24 hours. Coupled with a high trading volume, that’ll attract plenty of attention.
Comparatively, if we sort by lowest 24 hour trading volume in the top 100, Dentacoin pops up. It’s seen a 26.25% increase in the last 24 hours. That looks great on paper. But the low volume could make investors cautious. It might mean that the move won’t last, and that Dentacoin could soon see a correction. Of course, there’s no way to know for certain. Comparing the 1 day volume to the 7 day volume is another way we can read trends. Around $3.6 billion of Bitcoin was traded in the last 24 hours. Around $12.3 billion Bitcoin moved total in the last seven days. Almost a quarter of Bitcoin’s 7 day volume occurred yesterday. This tells us that yesterday was a massive trading day, which isn’t likely to repeat. On the other hand, you truly never know in crypto.
Cryptocurrencies are so different from established securities that there’s limited usefulness in comparing metrics. Since tokens don’t produce financial statements, they have relatively few metrics to start with. But we’ll compare cryptocurrency trading volumes to provide a sense of scale. In the last 24 hours, around $3.6 billion of Bitcoin was traded, as the price hit all-time highs. Comparatively, around $1.3 billion of Ethereum was traded. There’s quite a drop-off from there to Ripple, which saw $410 million change hands. But cryptocurrencies are already vastly more traded than conventional stocks. Apple trades roughly $4 billion a day in volume. For now, that remains ahead of the largest cryptocurrencies, but Bitcoin’s volume is knocking on the door. The higher trading volume of cryptocurrencies is one reason they fluctuate so drastically.
For traders, volume hints at sustainability of a given move. A drastic price increase with low volume might be fool’s gold. A drop with considerable volume behind it might mean a coin is in for an extended bear run. There are no certainties in cryptocurrency. But effectively assessing volume is an important tool in an investor’s belt.
InvestoPedia.com definition:
What is 'Volume':
Volume is the number of shares or contracts traded in a security or an entire market during a given period of time. For every buyer, there is a seller, and each transaction contributes to the count of total volume. That is, when buyers and sellers agree to make a transaction at a certain price, it is considered one transaction. If only five transactions occur in a day, the volume for the day is five.
Volume as Indicator 'Volume':
Volume is an important indicator in technical analysis as it is used to measure the relative worth of a market move. If the markets make a strong price movement, then the strength of that movement depends on the volume for that period. The higher the volume during the price move, the more significant the move.
Fundamental analysis is based on company performance and is used to determine which stock to buy. Technical analysis is based on price and is used to determine when to buy. Technical analysts are primarily looking for entry and exit price points, and volume levels provide clues about where the best entry and exit points are located.
Volume Trends Confirm Strength:
Volume is one of the most important measures of strength for traders
and technical analysts. Put simply, volume refers to the number of
contracts traded. For any trade to occur, the market needs to produce a
buyer and a seller. A transaction occurs when buyers and sellers meet
and is referred to as the market price. From an auction perspective, when buyers and sellers become particularly active at a certain price, it means there is a lot of volume.
is based on company performance and is used to determine which stock to buy. Technical analysis is based on price and is used to determine when to buy. Technical analysts are primarily looking for entry and exit price points, and volume levels provide clues about where the best entry and exit points are located.
Volume Trends Confirm Strength:
Volume is one of the most important measures of strength for traders and technical analysts. Put simply, volume refers to the number of contracts traded. For any trade to occur, the market needs to produce a buyer and a seller. A transaction occurs when buyers and sellers meet and is referred to as the market price. From an auction perspective, when buyers and sellers become particularly active at a certain price, it means there is a lot of volume.
Volume Analysts:
Analysts: use bar charts to quickly determine the level of volume. Bars also provide easier identification of trends in volume. When bars are higher than average, it is a sign of high volume or strength at a particular market price. In this way, analysts use volume as a way to confirm a price movement. If volume increases when the price moves up or down, it is considered a price movement with strength.
Trade Volume by Example:
If traders want to confirm a reversal on a level of support, or floor, they look for high buying volume. Conversely, if traders are looking to confirm a break in the level of support, they look for low volume from buyers. If traders want to confirm a reversal on a level of resistance, or ceiling, they look for high selling volume. Conversely, if traders are looking to confirm a break in the level of support, they look for high volume from buyers.
Volatility is the measurement of how much the price of an asset is likely to change over a period of time. Stocks for established companies like Apple and Google have a much lower volatility than cryptocurrencies which may change a lot in one day.
Volatility is a translation of what has cemented cryptocurrencies into internet indexing, since they exploded into the mainstream investor market has been their volatility.
The cryptocurrency market has also felt the ill effects of Bitcoin’s volatility because as a result of the price drops, Bitcoin’s trading volume, and even interest in the digital currency realm also decreases.
The danger is that volatility can cause a large exodus of investors to occur which severely dents the hopes of other cryptocurrencies gaining mass adoption status.
Volatility should be at the center of attention if there is to be a future in which crypto is used widely in day-to-day instances.
Volatility (finance)
The VIX In finance,
volatility (symbol σ) is the degree of variation of a
trading price series over time as measured by the standard
deviation of logarithmic
returns.
Historic volatility measures a time series of past market prices.
Implied
volatility looks forward in time, being derived from the market
price of a market-traded derivative (in particular, an option).
Volatility as described here refers to the actual volatility,
more specifically:
actual current volatility
of a financial instrument for a specified period (for example 30
days or 90 days), based on historical prices over the specified
period with the last observation the most recent price.
actual historical volatility
which refers to the volatility of a financial instrument over a
specified period but with the last observation on a date in the past
near synonymous is realized
volatility, the square
root of the realized
variance, in turn calculated using the sum of squared returns
divided by the number of observations.
actual future volatility which refers to the
volatility of a financial instrument over a specified period
starting at the current time and ending at a future date (normally
the expiry date of an option).
Now turning to implied
volatility, we have:
historical implied volatility
which refers to the implied volatility observed from historical
prices of the financial instrument (normally options)
current implied volatility
which refers to the implied volatility observed from current prices
of the financial instrument
future implied volatility which refers to the implied
volatility observed from future prices of the financial instrument
For a financial instrument whose price follows a Gaussian
random walk,
or Wiener
process, the width of the distribution increases as time
increases. This is because there is an increasing probability
that the instrument's price will be farther away from the initial
price as time increases. However, rather than increase linearly, the
volatility increases with the square-root of time as time increases,
because some fluctuations are expected to cancel each other out, so
the most likely deviation after twice the time will not be twice the
distance from zero.
Since observed price changes do not
follow Gaussian distributions, others such as the Lévy
distribution are often used.[1]
These can capture attributes such as "fat
tails". Volatility is a statistical measure of dispersion
around the average of any random variable such as market parameters
etc.
Mathematical
definition
For any fund that evolves randomly with time, the square of
volatility is the variance
of the sum of infinitely many instantaneous
rates of return, each taken over the nonoverlapping,
infinitesimal periods that make up a single unit of time.
Thus, "annualized" volatility
σannually is the standard deviation of an
instrument's yearly logarithmic
returns.[2]
The generalized volatility σT for time
horizon T in years is expressed as:
Therefore, if the daily logarithmic returns of a stock have a
standard deviation of σdaily and the time period
of returns is P in trading days, the annualized volatility is
A common assumption is that P = 252 trading days in any given
year. Then, if σdaily = 0.01, the annualized
volatility is
The monthly volatility (i.e., T = 1/12 of a year or P =
252/12 = 21 trading days) would be
The formulas used above to convert returns or volatility measures
from one time period to another assume a particular underlying model
or process. These formulas are accurate extrapolations of a random
walk, or Wiener process, whose steps have finite variance.
However, more generally, for natural stochastic processes, the
precise relationship between volatility measures for different time
periods is more complicated. Some use the Lévy stability exponent α
to extrapolate natural processes:
If α = 2 you get the Wiener
process scaling relation, but some people believe α < 2
for financial activities such as stocks, indexes and so on. This was
discovered by Benoît
Mandelbrot, who looked at cotton prices and found that they
followed a Lévy
alpha-stable distribution with α = 1.7. (See
New Scientist, 19 April 1997.)
Volatility origin
Much research has been devoted to modeling and forecasting the
volatility of financial returns, and yet few theoretical models
explain how volatility comes to exist in the first place.
Roll (1984)
shows that volatility is affected by market
microstructure.[3]
Glosten and Milgrom (1985) shows that at least one source of
volatility can be explained by the liquidity provision process. When
market makers infer the possibility of adverse
selection, they adjust their trading ranges, which in turn
increases the band of price oscillation.[4]
Volatility
for investors
Investors care about volatility for at least eight reasons:
The wider the swings in an
investment's price, the harder emotionally it is to not worry;
Price volatility of a trading
instrument can define position sizing in a portfolio;
When certain cash flows from
selling a security are needed at a specific future date, higher
volatility means a greater chance of a shortfall;
Higher volatility of returns while
saving for retirement results in a wider distribution of possible
final portfolio values;
Higher volatility of return when
retired gives withdrawals a larger permanent impact on the
portfolio's value;
Price volatility presents
opportunities to buy assets cheaply and sell when overpriced;
Portfolio volatility has a
negative impact on the compound
annual growth rate (CAGR) of that portfolio
Volatility affects pricing of options,
being a parameter of the Black–Scholes
model.
In today's markets, it is also possible to trade volatility
directly, through the use of derivative securities such as options
and variance
swaps. See Volatility
arbitrage.
Volatility
versus direction
Volatility does not measure the direction of price changes, merely
their dispersion. This is because when calculating standard
deviation (or variance),
all differences are squared, so that negative and positive
differences are combined into one quantity. Two instruments with
different volatilities may have the same expected return, but the
instrument with higher volatility will have larger swings in values
over a given period of time.
For example, a lower volatility stock may have an expected
(average) return of 7%, with annual volatility of 5%. This would
indicate returns from approximately negative 3% to positive 17% most
of the time (19 times out of 20, or 95% via a two standard deviation
rule). A higher volatility stock, with the same expected return of 7%
but with annual volatility of 20%, would indicate returns from
approximately negative 33% to positive 47% most of the time (19 times
out of 20, or 95%). These estimates assume a normal
distribution; in reality stocks are found to be leptokurtotic.
Volatility
over time
Although
the Black
Scholes equation assumes predictable constant volatility, this is
not observed in real markets, and amongst the models are Emanuel
Derman and Iraj
Kani's[5]
and Bruno
Dupire's local
volatility, Poisson
process where volatility jumps to new levels with a predictable
frequency, and the increasingly popular Heston model of stochastic
volatility.[6]
It is common knowledge that types of
assets experience periods of high and low volatility. That is, during
some periods, prices go up and down quickly, while during other times
they barely move at all.[7]
Periods when prices fall quickly (a crash)
are often followed by prices going down even more, or going up by an
unusual amount. Also, a time when prices rise quickly (a possible
bubble)
may often be followed by prices going up even more, or going down by
an unusual amount.
Most typically, extreme movements do not appear 'out of nowhere';
they are presaged by larger movements than usual. This is termed
autoregressive
conditional heteroskedasticity. Whether such large movements have
the same direction, or the opposite, is more difficult to say. And an
increase in volatility does not always presage a further increase—the
volatility may simply go back down again.
The risk parity weighted volatility of the three assets Gold,
Treasury bonds and Nasdaq (Worldvolatility.com) acting as proxy for
the Marketportfolio seems to have a low point at 4% after turning
upwards for the 8th time since 1974 at this reading in the summer of
2014.worldvolatility.com
Alternative
measures of volatility
Some authors point out that realized
volatility and implied volatility are backward and forward looking
measures, and do not reflect current volatility. To address that
issue an alternative, ensemble measure of volatility was
suggested.[8]
This measure is defined as the standard deviation of ensemble returns
instead instead of time series of returns.
Implied
volatility parametrisation
There exist several known
parametrisation of the implied volatility surface, Schonbucher, SVI
and gSVI.[9]
Crude
volatility estimation
Using a simplification of the above formula it is possible to
estimate annualized volatility based solely on approximate
observations. Suppose you notice that a market price index, which has
a current value near 10,000, has moved about 100 points a day, on
average, for many days. This would constitute a 1% daily movement, up
or down.
To annualize this, you can use the "rule of 16", that
is, multiply by 16 to get 16% as the annual volatility. The rationale
for this is that 16 is the square root of 256, which is approximately
the number of trading days in a year (252). This also uses the fact
that the standard deviation of the sum of n independent
variables (with equal standard deviations) is √n times the standard
deviation of the individual variables.
The average magnitude of the observations is merely an
approximation of the standard deviation of the market index. Assuming
that the market index daily changes are normally distributed with
mean zero and standard deviation σ, the expected value
of the magnitude
of the observations is √(2/π)σ = 0.798σ.
The net effect is that this crude approach underestimates the true
volatility by about 20%.
Estimate of compound annual growth rate (CAGR)
Consider the Taylor
series:
Taking only the first two terms one has:
Volatility thus mathematically represents a drag on the CAGR
(formalized as the "volatility
tax"). Realistically, most financial assets have negative
skewness and leptokurtosis, so this formula tends to be
over-optimistic. Some people use the formula:
for a rough estimate, where k is an empirical factor
(typically five to ten).
Criticisms of volatility forecasting models
Performance of VIX (left) compared to past volatility (right) as 30-day volatility predictors, for the period of Jan 1990-Sep 2009. Volatility is measured as the standard deviation of S&P500 one-day returns over a month's period. The blue lines indicate linear regressions, resulting in the correlation coefficients r shown. Note that VIX has virtually the same predictive power as past volatility, insofar as the shown correlation coefficients are nearly identical.
Despite the sophisticated composition of most volatility forecasting models, critics claim that their predictive power is similar to that of plain-vanilla measures, such as simple past volatility [10][11] especially out-of-sample, where different data are used to estimate the models and to test them.[12] Other works have agreed, but claim critics failed to correctly implement the more complicated models.[13] Some practitioners and portfolio managers seem to completely ignore or dismiss volatility forecasting models. For example, Nassim Taleb famously titled one of his Journal of Portfolio Management papers "We Don't Quite Know What We are Talking About When We Talk About Volatility".[14] In a similar note, Emanuel Derman expressed his disillusion with the enormous supply of empirical models unsupported by theory.[15] He argues that, while "theories are attempts to uncover the hidden principles underpinning the world around us, as Albert Einstein did with his theory of relativity", we should remember that "models are metaphors – analogies that describe one thing relative to another".
Volatility
hedge funds
Well known hedge fund managers with expertise in trading volatility
include Mark
Spitznagel and Nassim
Nicholas Taleb of Universa Investments, Paul Britton of Capstone
Holdings Group,[16]
Andrew Feldstein of Blue Mountain Capital Management,[17]
and Nelson
Saiers from Saiers Capital.[18]
