Before getting started, you need to understand what crypto trading is and the basic concepts to be successful and profitable
It seems that crypto trading is taking over the world. And why wouldn’t it? Cryptocurrencies are the future and everyone is looking to get their foot in the door, and for good reason. However amazing and trendy it may sound to own and trade cryptos, it’s a whole other ballgame when it comes to actually going about it. New traders, especially, require a specific set of skills and knowledge before diving into crypto trading, in the hope to avoid any inevitable loopholes or challenges.
Before getting started, you need to understand what crypto trading is and the basic concepts and steps surrounding it, to be successful and profitable.
So, here’s a full guide for beginners to get started with crypto trading:
What is Crypto Trading?
Crypto trading involves buying and selling your assets through an exchange or a trading platform, with the ultimate goal being to make a profit.
How is Crypto Trading Different From Investing?
The thing that differentiates crypto trading from the more traditional concept of investing is in the time in which results are expected. While they have the same end game, investing implies that you are in it for the long haul, which can last for years, whereas crypto trading is more dependent on a short-term or medium-term period of time, which can be from a couple of minutes to a number of weeks.
Different Types of Crypto Trading Strategies
There are a number of different strategies you can choose from to go about crypto trading, depending on the amount of time you are looking to wait before selling your assets for a profit and how urgent that is. It also depends on the level of commitment and time you are willing to invest in your crypto trading.
For example, Scalping is the shortest-term strategy that offers instant profits, as it requires traders to hold onto their assets for seconds or minutes. Day Trading is another short-term strategy, where traders enter and exit their position on the market within the same day. Swing Trading is another option that allows traders to hold their position for up to several weeks. A long-term strategy is that of Position Trading, where the focus shifts to long-term prices with traders being more concerned with larger market trends than smaller day-to-day price fluctuations.
Steps to Crypto Trading
It’s important to know the steps you need to take in order to enter crypto trading in the right way and start gaining from your investments:
- Open an account in a cryptocurrency exchange: The first step is to choose the exchange of your choice and open up an account, through some very simple steps where you provide some of your personal information through a straightforward, user-friendly interface.
- Fund your account: The next step is to add money to your digital wallet, either via a bank deposit from your debit card or a wire transfer.
- Choose your cryptos: You need to select the cryptocurrencies you want to invest in, whether they are the well-known preferrables such as Bitcoin or Ethereum, or if you choose to put a portion into altcoins, which may be riskier, but have a higher chance of increased value over time.
- Select your preferred strategy: As mentioned above, this depends on your own personal profit goals and investment dedication to your crypto trading.
- Store your cryptos: You can choose to store your cryptocurrencies either in the digital wallet of your chosen exchange, or in a hardware wallet that allows for more protection as cryptocurrencies are kept on a physical device and offline.
All in all, crypto trading requires knowledge of tools and techniques, a trustworthy exchange and a lot of dedication from you in investing time and assets. It may not sound like a simple task, but with some good resources, your own research and commitment, you can be on top of your crypto trading game in no time!
Risk Warning: Cryptocurrencies are highly volatile and trading can result in the loss of your invested funds. Before investing you should be aware that cryptocurrencies may not be suitable for all investors. You should therefore carefully consider whether trading or holding digital assets is suitable for you in light of your financial condition and not invest money that you cannot afford to lose.