To sign up for our daily email newsletter, CLICK HERE
Cryptocurrency trading is a way to earn money from price fluctuations in the crypto market. You can benefit from it by speculating on price movements via CFDs or by buying underlying assets and selling them when the return-to-investment ratio increases. When you trade via CFDs, you don’t own the underlying coin, you just bet how its price will change – increase or decrease.
The crypto industry is more volatile than any other financial market, so it’s difficult to avoid losses when making decisions on long or short positions. Besides, the profit heavily depends on the size of your investment.
Crypto assets are often used as diversifiers that provide a wider market exposure. Alongside this, you should bear in mind that in the crypto market, you can also trade crypto options. These are derivatives, meaning their values are often impacted by the costs of underlying coins.
If you are a complete newbie, you should take some time to understand cryptocurrency trading for beginners. An outrageous investment won’t bring thousands of dollars in return if you don’t understand how this market works and what you should pay attention to. That’s why you should read this guide!
How does one start trading cryptocurrencies?
The crypto market is very big these days, so you can find different ways to trade cryptocurrencies to participate in cryptocurrency investing. But we don’t recommend getting down to this venture without having basic knowledge about where to trade, how to trade, and how to minimize risks. Here are the steps you should take to start cryptocurrency trading.
1. Register a trading account on a crypto exchange
The most common way to buy underlying coins is to sign up for a cryptocurrency exchange. Binance, PrimeXBT, eToro, Coinbase, and Kraken are the leading cryptocurrency exchanges you should have heard about. All these platforms offer a lot of cryptocurrencies to benefit from.
Choose one of them and create your personal account. For that, you will be required to verify your identity by providing personal data. When the KYC requirements are completed and you are verified as a user, you can get down to the second step. Also, make sure they are in good legal standing and have all the licensing required such as a Starlegal crypto license.
2. Make a starting deposit
You need to have some funds in your account in order to be able to buy altcoins. Once you are verified, you can make a starting deposit. Explore the payment methods available with the chosen cryptocurrency exchange. Also, you should find out whether the platform has a limitation regarding the account minimum. Some services might also charge deposit fees, while others offer additional bonuses for your first funding.
3. Select an investment product
For beginners delving into the world of cryptocurrency, understanding the complexities of trading can be daunting. That’s why it’s essential to have the right support. Having this crypto prime broker provides the expertise and tools needed to navigate the intricacies of cryptocurrency trading, making it an excellent choice for those starting their trading journey.
4. Start trading
At this stage, you should know what your trading strategy is. Many beginning crypto traders look for automatic crypto trading software solutions. Such robots offer you the possibility to choose different ways of trading and stick to them so as to fulfill your trading goals.
You can also invest in altcoins and hold them for a long time until you see that there’s a good possibility to get a reward for this holding. This is an investment. You can add an underlying coin to your investment portfolio with other financial products. If you invest in multiple assets, experts recommend allocating no more than 10% of your total investment budget to cryptocurrencies
Anyway, there are different trading styles. We are going to uncover them in the following paragraphs.
5. Store your crypto assets
Crypto exchanges and brokerage platforms offer two basic ways to store your coins. One way is to transfer them to a hot wallet available on the crypto exchange. The other approach is to store cryptocurrencies in hardware wallets, also known as cold storage. If your trading platform offers such a possibility, you should use it. A hardware wallet is a physical object that protects your fund with a physically stored code without an internet connection.
Crypto trading styles
To get down to the fourth step of our beginners’ guide, you should determine which trading style you will be using. Here we have the basic description of the most popular crypto trading styles:
Scalping
Scalping isn’t about holding cryptocurrencies for a long time. You should make quick deals. Scaling is a trading style that brings earnings immediately, although they are quite small and non-guaranteed. One more benefit is that losses are not as significant as well. When scalping, deals are opened and closed every few minutes.
Day Trading
Day trading is different from scalping in terms of the time required to make a deal. In this case, one trade is made over the course of the day but not over the course of several minutes. Day trading can be combined with other trading styles. The crucial peculiarity of this approach is that a trader doesn’t hold positions for too short (several minutes) or too long (several days).
Day trading brings more profits than scalping. At the same time, you should be more tolerant of risks. As a day trader, you can use stop-loss orders that minimize losses.
Range Trading
As a range trader, you should define crypto ranges and set stop limits. The Range trading approach requires a participant to buy the bottom of the range with a stop and then sell the range top.
Intraday Trading
Intraday trading is a simple approach. You act as a day trader. The only crucial difference is that you hold your positions for several days. You can open and close new positions whenever you want since the crypto market is open 24/7. Thus, there’s no end to a trading day when you need to close your positions.
Swing Trading
If you find support and trade to the next resistance level, you are a swing trader. In simple words, you hold the crypto position until it meets your pre-determined target.
Position Trading
Position trading is often referred to as the trading version of investing. This style doesn’t have time limitations – you can stick with the crypto position even for several years.
https://copywritely.com/tools/copywritely/task_sharing/99cf140
