Trading cryptocurrency has boomed in recent months. The high volatility and significant volume of transactions in the cryptocurrency market have created good conditions for taking short-term profits through volatility and buying and selling. Here, we will explain some points related to trading of cryptocurrencies, including information related to digital currency trading, trading methods, how to trade, as well as important points that traders should pay attention to before starting trading.
What is cryptocurrency trading?
Crypto trading can be compared to forex trading in many ways. In the forex market, different fiat currencies from around the world are traded against each other. In forex trading, the US dollar can be converted to Euro, Swiss franc or any other currency and used or resold at the right time.
Cryptocurrency trading is very similar to Forex and allows traders to buy cryptocurrency in US dollars. Like forex, cryptocurrency traders can buy and sell in this market by having a trading strategy, or take advantage of daily or weekly ups and downs and make a profit.
There are even several other strategies available by which you can potentially profit from the growth in the value of cryptocurrencies. But due to high fluctuations in Bitcoin and other altcoins, the method of buying and selling to receive daily and weekly profits is not recommended for beginners, and it is better not to do this without proper analysis and information.
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Crypto trading methods that you must know
There are several methods for trading cryptocurrency and making profit from them, including scalping, day trading, range trading and investment.
Scalp trading
In trading with the scalping method, the trader can profit from small changes in a very short time period of a few seconds or minutes. This requires constant concentration. If you are skilled in this work and using technical analysis methods, using robots and automated trading platforms, you can earn money from this method at a high speed. This requires considerable risk management, luck and skill. You can earn a small profit with each scalping trade, but the sum of these profits can be impressive in the long run. For all cryptocurrency signals, purchase Asiasignal’s VIP indicator.
Day Trading
Day trading is similar to scalping, but instead of trading for a few minutes, you do it throughout the day. These types of transactions require technical analysis. Basically, if you are looking for more profit than the scalping method, you can use this trading method.
Range trading
Range trading is a type of day trading that aims to set a range. That is, the trader considers a time period of, for example, a week. In this method, the trader focuses on buying in an upward trend or buying after a downward trend in an hourly or daily time frame.
Trend trading
Trend trading is the evaluation of the rate of increase or decrease of a digital currency during a certain period. Trend trading is considered as a long-term strategy. Because at least they take several months to check the price. Trend trading determines the decline or rise of a currency to exit or enter the market. These trades can bring a good profit for most people, but newcomers to this market.
Swing trading
Swing trading, as the name suggests, is checked according to fluctuations. Volatility is the changes that affect the price of a cryptocurrency in the short term. Usually, beginners prefer this type of trading to trend trading. Many say that this type of transaction, like the trend equation, can offer good profits to the audience over time.
Investment
Basically, people do not consider investment as a kind of trade. Because trading means being in situations where you can make a profit. Investing actually means taking ownership of an asset as a store of value with the overall goal of increasing this value over time.
For example, Warren Buffett is an investor. He considers buying shares like owning a part of a company. An investor is actually a real holder. They don't really need to see prices and charts unless they want to increase their holdings at the right price. Therefore, investment is not a trade, but because buying and selling is done in it and for some people, it is a very suitable method.
Day trader and other traders?
The important thing about digital currency day trading is that regular traders are different from day traders and fall into different categories. As the title "day trader" suggests, this category of traders consider their activities for daily time frames and implement specific strategies of this method in their trades. A day trader in the field of day trading of cryptocurrency holds his assets only for 24 hours and after that, he enters the phase of selling them.
Other traders who operate in areas other than day trading cryptocurrency hold their assets for longer than one day. A typical trader may, in the best of circumstances, sell his assets after a few months or years and hold his digital currencies for a long time. In general, in order to become a successful trader in the field of daily trading of digital currency, you must keep in mind the 3 principles of "strategy, platform, and appropriate digital currency" and with this order, move towards the profitable horizons of the cryptocurrency world.
Who is suitable for daily trading of digital currency?
Traders who decide to make significant profits by day trading cryptocurrency should note that day trading digital currency is a controversial strategy. Although this strategy has high profit potential, it is equally risky. Some people see this strategy as a get-rich-quick strategy, but since it requires quick decisions and execution, it can be exhausting.
For this reason, daily trading of cryptocurrency is not suitable for all people. Profitability from this strategy requires a deep understanding of the market and high-risk tolerance. If, in addition to all these things, you can look at the screen for a long time to observe the price fluctuations, you can use this strategy for your trading.
How to enter the digital currency market and trade on a daily basis?
First of all, you need to define your trading strategy for day trading. If you still don't know which strategy is right for you, you can use trial and error. First, start day trading digital currency with a small amount and explore different strategies. After a short period of time, you will find out which strategy is suitable for you according to your personality type, expertise, current capital and the time you have.
Another method is to read other people's analysis, study the movement of professional traders and determine your strategy according to their movement. This work is called copy trading. But never forget that what plays an important role in determining the digital currency day trading strategy is the level of your skill and knowledge. Also, day trading is a continuous activity for which you must have a detailed plan. Otherwise, you will miss out on golden market opportunities to make a profit. Don’t forget to try VIP indicator of Asiasignal.
How to start trading?
To start crypto trading, you must choose a cryptocurrency wallet and a reliable trading platform such as Asiasignal’s VIP indicator. The authentication and verification process after registering on this platform may take some time. But after verifying your information and funding your account, all you have to do is buy or sell the cryptocurrency you want to trade. You can trade, for example, dollars with digital currency such as Bitcoin. Therefore, it depends on your decision whether to trade Bitcoin to Ethereum, Ethereum to Litecoin, etc. using the facilities available on the platform of various exchanges.
In the meantime, some reputable sites such as Binance can be a suitable solution for traders. Because they act as a wallet, a place for trading, and even a tool for analyzing the trend of the digital currency market. In some cases, you may need to use more than one exchange to access a wider range of crypto coins. For example, buying bitcoin in an exchange and then sending it to another wallet and selling bitcoin again through another exchange!
Where do we start to learn cryptocurrency trading?
Today, there are many books, Asiasignal’s articles, in-person and online courses that you can use to learn how to trade. You will learn educational tips by buying or downloading up-to-date books and articles. But in-person or online courses may be more effective today because the professors of these courses will fully introduce you to the digital currency market and its trends and will teach you various types of analysis according to your investment goals.
Another way to learn to trade cryptocurrency is through reputable online websites and Asiasignal’s cryptocurrency channel that can teach you and at the same time provide the services you need for trading. In other words, you can open an account on these sites and after authenticating and confirming the information, create a wallet for yourself. Your wallet can be software or hardware. Then start trading digital currency through this exchange.
Is trading cryptocurrencies profitable?
Investing in digital currencies can bring you huge profits. However, the activity in this field is associated with a lot of risk and it is possible that you will quickly lose a large amount of your capital.
This means that trading digital currencies is very exciting and it will be very difficult to keep your mind calm under a lot of mental pressure.
How should beginners in the field of cryptocurrency start their trade?
A newbie should start his trade by choosing a cryptocurrency exchange and wallet that have a good reputation in order to avoid possible complications later on. Also, as a beginner, you should start your trade with known and valuable currencies. Right now, and in 2022, you can use Ethereum (ETH) or Bitcoin (BTC) for trading. For more detailed info, buy Asiasignal’s premium account of trading view.
What is the time frame? Selection of time periods for analysis
Traders look at the price chart and analyze it for technical analysis. The price chart consists of two axes, price and time. Trading time can be divided into specific formats to analyze the price of digital currency in specific time periods. These time intervals have a specific unit. For example, you can check the price in a recent hour, a recent day, a recent month, a recent year, etc. These formats are called time frames.
For example, the daily time frame of Bitcoin means the price chart of Bitcoin during a recent day and comparing it with the previous days. Exchanges and digital currency analysis sites usually have tools for changing timeframes.
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What are the types of time frames for analyzing cryptocurrencies?
Time frames are divided into short -term and long- term time frames according to different time frames. These formats exist as minute, hourly, daily, weekly and monthly charts. Traders generally use widely used time frames in the technical analysis of digital currencies, which we will mention below.
- One-minute M1 changes in 1 minute
- 5 minutes M5 Changes in 5 minutes
- 15 minutes M15 Changes in 15 minutes
- 30 minutes M30 Changes in 30 minutes
- 1-hour H1 changes in one hour
- 4 hours H4 Changes in 4 hours
- 1-day D1 Changes within 1 day
What is the use of time frame in digital currency transactions?
The time frame, or the time period, is one of the main concepts and components of technical analysis of digital currencies, which leads the analyst to a correct analysis of price behavior in specific intervals. The time frame is very important because it helps traders to find the best time to buy or sell digital currencies. To put it more simply, the price display time frame is based on a certain time scale.
- In general, the time frame illuminates two important issues for traders:
- The amount of transaction risk
The length of time it takes to determine the result of the analysis and review of a trader's trade. In fact, traders find the best time to trade by checking a specific time frame and by monitoring the current price of digital currencies.
Effective factors in choosing the time frame
Capital management
Most people use resistance and support levels to determine profit limit and loss limit points. Profit limit and loss limit points mean exit points from a transaction. The profit limit point is when the transaction goes according to your analysis and you leave it with peace of mind, and the loss limit point is when the conditions did not go as you expected and may lead to an irreparable loss in trading cryptocurrency.
In longer time frames, there will be a longer distance between the entry and exit point because usually the price movements and the distance between the floor and the ceiling of the market are greater in these time frames. Due to this problem, to choose the exit point, the trader has to accept a higher loss limit. On the other hand, the use of short-term time frames will increase the risk of transactions.
Choose your analysis method
Price patterns in technical analysis may not even form for weeks or the right opportunity to trade may not reach these speeds. On the other hand, some patterns are formed in a short period of time and have a much larger number. In choosing the time frame, be sure to pay attention to your trading pattern and find your optimal opportunity accordingly.
Trust your personal experience
Many things about analysis can be taught, but there are many things that can only be learned through experience. You can sometimes rely on these experiences and find your way through the dilemmas. However, be careful not to make decisions based on emotions and simply remember your real experiences. In this context, Asiasignal’s cryptocurrency channel can be suitable for you.
What is the best time frame for digital currency?
The best time frame is definitely the time frame that has more profit with lower risk; But this definition is by no means an exact definition. Choosing the best time frame for digital currencies is not much different from other financial markets, but before starting to trade in this market, you should note that the short-term market of digital currencies may not move according to your technical analysis. In the following, we will review the choice of time frame for different situations together.
The best time frame for swing and day trading
If you are looking for the best time frame for day trading or volatility, you should remember important points in this regard. In swing traders often stay in a trade for a very short time and exit the position quickly. According to the time frame that a trader stays in a trade, the best time frame for swing can be chosen.
Usually, in such cases, traders use short time frames for analysis, such as one-minute, 5-minute, etc., however, it is not bad to have a look at larger time frames. Larger time frames show the overall trend and smaller time frames can help identify the right entry point. To choose the best time frame for daily trading cryptocurrency, first of all, you should be well trained in capital management procedures.
The best time frame for fundamental traders
Even if you are interested in fundamental analysis more than technical; Again, the time frame will be useful for you. In fundamental analysis, you will have no need for short-term time frames and you can simply use long-term time frames for analysis, according to your needs. Daily and weekly timeframes are the most widely used in fundamental analysis, however, some are even more interested in monthly timeframes. For all awesome and new cryptocurrency signals choose Asiasignal’s VIP channel.
The best time frame for intraday trading
Intraday trades are trades that expire in less than one day. In these transactions, 5-minute, 15-minute and one-hour time frames are often used.
What kind of traders is the one-minute time frame more suitable for?
As mentioned earlier, the style and strategy of traders in choosing the time frame is very important, for example, scalper traders usually prefer to set their time frame chart to one minute. In other words, their trading setup is very different from other traders. These types of traders may enter multiple buy or sell positions in an hour, and a large number of trades are due to the large number of chart changes in the one-minute time frame.
In general, scalpers bear the highest amount of risk and try to profit from all price movements in the smallest time frames. One of the other benefits of a one-minute timeframe is the faster identification of candles that eventually change the trend of the chart.
Such scalpers take much more risk into their trades, they have no choice but to pay close attention to the chart and its momentary changes. Therefore, it is not bad for all traders to pay attention to the types of candles and the sizes of candles in the one-minute time frame from time to time, so that they can predict changes, buying or selling pressure, or the power of the desired trend in general.
Why should we use several time frames to check the price of cryptocurrencies?
The influence of time frames on trading is undeniable. Therefore, it is recommended that traders use "multi-time frames", which are several time frames in different time frames. This recommendation has important reasons that we will discuss below.
Checking multiple time periods; A different view for better cryptocurrency trading
Imagine you have selected a time frame to examine price changes over a period of time. By following this time frame, you leave other time frames, and when you look at the 10-minute chart, the price trend reverses in another time frame, and you remain unaware of it. If you follow an upward trend in one time frame, it may be a long-term downward trend in another time frame.
Therefore, by observing several time frames, you will consider all these aspects. For example, if you intend to sell Bitcoin, you should identify the right position by checking several time frames and measure the behavior of the price in different time frames.
Using multi-time frame; The best way to detect important price levels of cryptocurrencies
If you find a price level in a short-term time frame of several minutes or even a one-minute time frame, which has been a support for the price of a digital currency many times, you can find out if this level is important by referring to higher time frames. Is the position key or is it just a short-term level on the chart? These different levels of support and resistance in the price are formed by successive buying and selling of traders.
For example, the continuous buying and selling of Bitcoin causes the formation of different levels in its price, which traders can monitor using different time frames. If you are among this category of traders, you can calculate the price of Bitcoin and other digital currencies using the Bitcoin calculator, and use the "time frame" to determine the best trading time to trade cryptocurrency.
Receiving approval; Validate your trading strategy with multiple time frames
Of course, the goal of all those who enter the digital currency market is to make more profit and less loss. Therefore, we advise you to weigh the risk-reward ratio before making any transaction. One of the ways that can reduce the risk of your trading losses is to confirm your trading strategy along with price behavior in several different time frames.
This means that if, for example, you see a buying position in a 10-minute time frame, a downward trend may be detected by checking a higher time frame. Therefore, the probability of your profit from doing this transaction decreases and the risk of your loss increases. By considering long-term and monthly time frames and predicting the price behavior of digital currencies, you can also experience profitable transactions in the digital currency futures market. Make sure you use Asiasignal’s VIP indicator for your trading.
Traders and volume of transactions
Traders use different factors in technical analysis. Trading volume is one of the easiest factors for traders to evaluate the market. This tool is very important for traders during the rapid rise or fall of the price, because they can recognize and organize their trades using it. Also, the volume of high transactions, which is usually associated with a change in the price trend, can strengthen the value of the stocks desired by traders.
Different levels of trading volume can help traders make better decisions about when to enter the market; Traders track average trading volume throughout the day, both for short-term and long-term trades, so that they can make the right decision to enter the market. They can also combine other technical indicators with trading volume.
Important points
- Trading volume can be a good measure of market strength. Usually, markets with a high volume of transactions have stronger and healthier trends.
- When the market falls in the high trading volume, the market power in the bearish trend increases.
- You should be very careful when the price registers a new higher high in a downtrend because an upward trend may be formed.
- Asiasignal’s VIP indicators are tools that work based on cryptocurrency market volume.
Digital currency market features when trading
- The digital currency market works continuously: 24 hours a day, 7 days a week.
- This market is more volatile and less liquid than traditional markets.
- The digital currency market has a large number of its own conditions and features that other markets do not have. For example, metrics used when performing fundamental analysis or using Volts are found only in these assets.
- Bitcoin is the main and dominant currency of this market, and other digital currencies usually move in the direction of decreasing or increasing the price of Bitcoin. Depending on the market cycle we are in, there may be specific correlations or general increases in the relative strength of altcoins (cryptocurrencies other than Bitcoin) versus Bitcoin.
- When a person starts trading digital currency, he must enter the market using currency pairs. These pairs may be a digital currency against a fiat currency (BTC/USD, ETH/EUR, ADA /USD…) or a digital currency against another digital currency (XRP /BTC, ETH/BTC, DOGE/BTC…) to be formed.
- If the price goes up or if the price goes down, it is possible to make money.
- Security is of vital importance in crypto trading. Security is important both to prevent fraud or possible security flaws in projects invested in, and to protect digital currencies and private keys.
What is Bitcoin Dominance?
Bitcoin Dominance shows what percentage of the total digital currency market value belongs to Bitcoin and how much it costs to other altcoins. Dominance is one of the main concepts in cryptocurrency trading and professional traders always monitor dominance.
The key to Dominance is that when Bitcoin's dominance increases, altcoins lose value against Bitcoin. When Dominance declines, altcoins become more valuable against Bitcoin. Therefore, Dominance helps us to think strategically: when to theoretically invest in Bitcoin and when to invest in altcoins to get a better return on our money.
What is support and resistance?
Support and resistance are two very key concepts in crypto trading. Support is a price that a digital currency rises to when it reaches it. Resistance is the opposite of this concept. When a digital currency reaches a resistance level, its price usually decreases. Support is also known as floor and resistance is also known as ceiling.
Support and resistance are usually not points and are shown as lines on the price chart. The price of digital currency usually hits these lines many times and changes direction. Of course, it is possible to break support and resistance.
When a resistance level is broken, it usually becomes a support level. The reverse of this issue also exists and when the support level is broken, it becomes a resistance level in the future.
What is the difference between digital currency HODL strategy and trading?
Trading of cryptocurrencies, like trading in any other financial market, is done with the aim of taking advantage of price changes in different time frames. Digital currency traders are people who have proper knowledge of financial trading rules, are proficient in technical analysis tools and follow market news and price changes.
This group of people buys a cryptocurrency by identifying the situations in which the price decreases and then sells it by identifying the right time to sell and get the maximum profit. Digital currency holding, on the other hand, is not done with the aim of profiting from short-term market changes.
On the contrary, it is defined to prevent the investor from suffering under the influence of emotions in highly volatile markets. In this strategy, the digital currency trader or investor usually buys a cryptocurrency in large quantities and keeps it for the day when he can make multiple profits by selling it. Those investors who use this method to invest in the cryptocurrency market play an important role in the stability of the value of these systems by injecting long-term financial resources into these networks.
Of course, this is despite the fact that crypto trading is possible due to price changes in very short periods of time, and that group of investors who are looking to hold digital currency do not pay attention to price changes in a short period of time. Although this category of investors is not able to experience several successful transactions during the day like professional traders, but in the long term, they usually earn the same amount as short-term traders and even more, and this is while the size of the traders has not left their time and energy for the market.
Is HODLing a good strategy?
It has been proven that digital currencies can seem like a risky investment. But by taking a step back like hodlers, we can see that the long-term growth of digital currencies appears in multiple jumps and not as a continuous stream of growth! The most important thing in HODLing is to have patience and Asiasignal’s VIP indicator.
What are the benefits of HODLing?
For many, the question arises, why should we HODL our digital currency? In response, it can be said that if you are one of those people who do not want to get involved in the daily emotions of the market and are looking for peace of mind regarding your capital, or even if you are not interested in learning how to trade digital currency, HODLing is the best possible option for you. But the important issue that you should keep in mind in this regard is that you cannot expect the profits that can be obtained from daily trades only by HODLing.
A person HODLing his digital currency capital, for example Bitcoin, means that he considers this capital a valuable asset and is optimistic about its future.
Trade trend analysis
When you decide to enter a trade, there are three aspects that you should identify.
First: Your entry point.
This point is very simple and does not need much explanation, so whenever you want to enter a trade, the current price will be your entry point.
Second: You must place a Stop Loss (SL).
The term "stop loss" abbreviated as (SL) is your safety net through which you can reduce your loss and accept the limited loss you have incurred without losing more capital.
The reason for setting a “stop loss” is to prevent losing all of your money. The safety net reduces your losses significantly, and in the case of long-term trading (LONG) , it should be noted that the importance of this criterion is such that if you lose everything in one trade, then for You will not be away for long!
Third: Get profit (TP).
This is your goal and pursuit and it represents the price at which you want to exit the trade when you realize your profit. All of this works together if your trades are short-term rather than long-term.
Crypto trading strategies
Trading cryptocurrency with digital currency: (altcoin transactions)
This trading method, which is the most profitable form of cryptocurrency trading, is generally less understood. In this type, you use digital currency as a base and trade it with other digital currencies (altcoins) to grow your base coin. For example, you start with 0.1 BTC and trade it with other coins like ETH, BNB to increase your bitcoin holdings from 0.1.
This is also popularly known as altcoin trading. During a bull market, this is one of the best ways to increase your Bitcoin holdings. Many beginners stick to fiat trading with digital currency because it seems easy and familiar. However, another group that uses crypto-to-crypto currency trading makes significant profits over time.
Advantages of investing in cryptocurrencies
Investing in digital currencies has many advantages. In this section of free digital currency trading training, we have categorized these advantages for your easy understanding, which are as follows:
High liquidity
This advantage is considered for valid cryptocurrencies, and for this reason, you must be very careful in choosing the right digital currency. This work requires complete knowledge and awareness, and we have provided you with all the content in this free digital currency trading training course. Some cryptocurrencies cannot be liquidated in any way, and this causes some profit-seeking people to take advantage of this situation and abuse investors with pumps and dumps.
High diversity for investment
Diversity in investment is another benefit that you can achieve by investing in the digital currency market. Currently, there are more than thousands of cryptocurrencies in the market, you can make a safe and profitable investment on one of them by choosing well-known and reliable cryptocurrencies.
Low fees
Considering that most investment methods have very high fees, investing in digital currency has low transaction fees. Of course, there are some people who pay a lot of fees by choosing the wrong routes due to not having enough knowledge about the market.
Constantly rising market
The market for digital currencies has had an upward trend in all the years. At some times, they may face a drop, but after some time, they will find an upward trend.
4 common mistakes in cryptocurrency trading
When you buy and sell cryptocurrencies through exchanges, you are actually present in this high-risk market. To start trading digital currency through exchanges, you need to create an account for yourself and then keep your capital in waiting mode to create a suitable buying opportunity. After buying the desired currency, you must save your capital in the wallet. Despite all this knowledge and content, 4 common mistakes are also seen in this market:
Considering cryptocurrencies as assets
Currently, the law of some countries considers cryptocurrencies as an asset. Therefore, natural or legal persons must mention the income, expenses and profit they have earned from crypto trading in their annual tax return. In the United States of America, this issue is more visible than in other countries.
Therefore, digital currency market investors should note the profit rate of their cryptocurrency coins in their tax returns. This issue creates a lot of complexity and confusion for taxpayers. Apart from the disadvantages of digital currency trading, investors will also be involved with such issues and mistakes.
Decentralized status
The decentralized status of digital currencies is one of the great attractions of the cryptocurrency market. But this attraction is considered a big risk for individual investments. Bitcoin or any other cryptocurrency has no physical presence and is not backed by any central authority. While many government institutions are trying to focus on trading cryptocurrency.
Despite all these efforts, Bitcoin and other cryptocurrencies are still not under the control of any institution. People who make large investments are safe from the control and supervision of government institutions. This issue causes many legal problems. As a result, the value and price of each cryptocurrency goes up and down based on the rate of owners and big investors. There is no specific source for price control.
Payment methods in all types of businesses
Currently, with the development of technology, many businesses use digital currencies as a payment method. Some financial areas also use digital currencies for their transactions. As a result, people must register in the cryptocurrency market and enter this market to obtain their financial licenses.
Unfortunately, the legal status of this market is unclear. As a result, using this method to register active business certificates has complications. In many cases, even the users of these businesses cannot participate in these trades, as a result, they are unable to pay the amounts they want. In general, using this payment method or this registration method to obtain a license for all kinds of businesses poses many difficulties for users.
The problem of money laundering
In addition to the disadvantages of trading cryptocurrency, in this section we also mentioned common mistakes in this market. Another of these mistakes is the idea of money laundering. There is an idea among the general public that the digital currency market is a new tool for committing money laundering. This idea has caused the fear of powerful investors who do not intend to commit money laundering. In other words, these investors do not dare to enter the cryptocurrency market.
Keep in mind, all the mistakes mentioned above are related to money laundering. For example, since the state of the digital currency market is decentralized and there is no government regulator for it, people believe that most of the big investors are involved in money laundering. In some cases, exchanges are attacked by hackers and customers' assets are stolen.
How To Trade Cryptocurrency
Conclusion
Buying and selling digital currency and making profit requires sufficient awareness and knowledge about this market. You can make profitable transactions by mastering the price chart analysis and choosing the right time frame. As the most reliable online exchange, Asiasignal’s VIP channel helps you in making profitable transactions with 24-hour support, seven days a week. You can buy and sell digital currencies after a consultation with Asiasignal’s VIP indicator professional experts.
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