A transaction in four moves
- You create a transfer from your wallet.
- The network checks that you own the funds.
- The transfer is added to a block with others.
- The new record is shared and the recipient sees the balance.
Crypto basics and why people invest
This page is for people who are curious about digital assets but have not yet followed them closely. It explains the key ideas in plain language, from what a cryptocurrency is to why prices move and how risk is managed.
This page is for information only. It is not investment advice, and nothing here promises a return. Digital assets are volatile and you can lose all of the money you put in.
1. What are cryptocurrencies?
A cryptocurrency is a digital asset that exists only as records on a shared ledger kept by many computers rather than by one bank. The ledger, often called a blockchain, is a list of transactions that everyone on the network can check but nobody can quietly rewrite.
Like any asset, their price comes from supply and demand. Some have a capped supply, some release new units on a schedule, and people buy them for different reasons: as a payment tool, as a store of value or as a speculative position. They trade around the clock, every day of the year.
The key terms
| Term | What it means |
|---|---|
| Digital asset | Any item of value recorded digitally, including coins and tokens. |
| Ledger | The shared record of every transaction. |
| Wallet | Software or hardware that holds the keys to your assets. |
| Exchange | A marketplace where assets are bought and sold. |
| Stablecoin | A token designed to track the value of a currency such as the US dollar. |
Why people take an interest
Digital assets trade at all hours, which suits people who work shifts. They can be bought in small amounts and may behave differently from shares or bonds, so some investors use them to diversify. Those same traits also make them risky. A market that never closes can also move while you sleep, which is one reason people look to automation for monitoring.
2. Why prices change
No single factor moves a price, and the mix changes from week to week. The most common drivers are listed below.
| Factor | How it can affect price |
|---|---|
| Trading volume | High volume usually makes prices steadier. Thin volume lets single orders move the price. |
| News | Regulation, exchange problems or product launches can shift opinion in minutes. |
| Investor sentiment | Fear and enthusiasm spread quickly and can push prices past what fundamentals suggest. |
| Economy and global events | Interest rates, inflation and risk appetite in other markets spill over. |
In simple terms: new information changes expectations, expectations change the orders people place, and the balance between buy and sell orders sets the next price. Because digital asset markets are open at all hours and trade across many venues, those adjustments can happen at any time and sometimes very quickly, including at night in Singapore when few people are watching.
3. What volatility is
Volatility describes how much and how fast a price moves. A volatile asset can rise or fall by large amounts in a short time. Digital assets are more volatile than most traditional assets, which means larger possible gains and larger possible losses.
| High volatility | Low volatility | |
|---|---|---|
| Price movement | Large and fast, in both directions | Small and gradual |
| Opportunity | More chances to profit and to lose | Fewer chances either way |
| What to consider | Position size, stop levels and your own comfort with swings | Whether returns justify tying money up |
4. What risk management is
Risk management is the set of rules you follow so that one bad outcome cannot do lasting damage. The principles are simple: decide the amount you can afford to lose before you trade, spread money across more than one asset, never use borrowed money, and set a level at which you step back.
Finorix Pro provides tools to apply those rules, such as position limits, stop levels, alerts and a volatility guard that can pause automated activity. The tools help you follow your own plan. They do not make investment decisions for you and they cannot guarantee any result. A rule that is written down in advance is much easier to follow when markets are moving fast and emotions run high.
Principles in practice
- Invest only what you could lose without changing your lifestyle.
- Keep any single position to a small share of the total.
- Write down when you would stop, before you start.
- Review your plan after big market moves, not during them.
Kinds of digital assets you will hear about
Not every digital asset does the same job. A rough map helps you ask better questions about anything you are offered.
Payment coins
Designed mainly to move value from one person to another. Bitcoin is the best-known example, often described as a form of digital gold because its supply is capped.
Platform tokens
Native assets of networks on which other applications run, such as Ethereum. Demand depends on how much the network is used.
Stablecoins
Tokens meant to hold a steady value against a currency. They are often used to move in and out of positions, though they carry their own issuer risk.
Smaller tokens
Thousands of others exist. Many are thinly traded and some disappear. Treat anything you cannot explain in one sentence with extra caution.
A worked example of sizing a position
Suppose you decide that a single position should never cost you more than 2% of the money you set aside for trading. With S$3,000 in the account, that is S$60. If the strategy stops a position out when the price drops 5%, the largest position that respects your rule is S$60 divided by 0.05, or S$1,200.
The numbers are illustrative only. The point is the order of thinking: you start from the loss you can accept, and the size of the position follows from it, not the other way round. Platform limits let you enter those two numbers once and apply them to every trade.
Mistakes beginners make most often
- Putting in money they will need for rent or bills within a year.
- Chasing an asset after it has already risen sharply on social media.
- Moving stop levels further away after a position turns against them.
- Sharing a code or key with someone who promises to "manage" the account.
- Treating a good month as proof that risk has gone away.
Our articles go deeper on mistakes and on the psychology that causes them.
5. Short questions from beginners
More answers are on the FAQ page.
Is crypto the same as a bank deposit?
No. Digital assets are not bank deposits and are not covered by deposit insurance. Their value can fall to zero.
Do I need a lot of money to start?
No. Assets are divisible, and our Basic plan starts from S$340. A small start is also a sensible way to learn.
Can I lose more than I invest?
Not with the way the platform is configured, because it does not use borrowing. You can, however, lose the whole of the amount you invest, which is why the size of your starting amount matters more than any individual setting.
Is it too late to get involved?
Nobody can say. Timing the market is difficult for professionals as well, so focus on whether the risk suits you.