A Beginner's Guide To Crypto Trading
Everyone seems to be obsessed with cryptocurrency trading! And why shouldn't they? Cryptocurrency is the future. So let's get you started as well!
In the volatile cryptocurrency market, it is critical to have the right strategy in mind to make informed decisions and be aware of the risks that might arise at any time. Given that, you need to broaden your knowledge and learn how to day trade Bitcoin and altcoins, as well as many other techniques.
In this article, we will elaborate on how to trade crypto. Below you will find a step-by-step guide:
Step 1: Find a Cryptocurrency Exchange
The very first step for a newcomer is to hunt for the top crypto exchanges. You have tons of options to choose from, so do your homework to make the right choice and register on a good exchange.
Step 2: Fund Your Account
After you sign up, fund your account. Wire transfers and debit cards are usually both accepted. Typically, the transactions are carried out within 5-30 minutes. When choosing a payment method, take into account not only speed but also transaction fees. Wire transfer is one of the cheapest ways to fill your account.
Step 3: Choose a Cryptocurrency and Buy It
Most professional traders choose Bitcoin and Ethereum in the first place. They are more predictable than other little coins. On the other hand, altcoins may see a roughly 1000 percent increase in just a month, making them a viable option for trading.
Step 4: Decide on a Strategy
Choosing a trading strategy is a critical step. By combining trading indicators with correct fundamental and technical analysis, you can earn huge profits. However, if you are a beginner, it is advised that you enroll in a cryptocurrency trading school and practice first.
Step 5: Store Your Cryptocurrency Safely
Finally, you must keep your cryptocurrencies in a safe place. You can use a software or hardware wallet. Both are a far safer way to hold crypto compared to storing it on an exchange. If you are to choose between software and hardware ones, the latter boasts improved security.
Trading Strategies To Choose From
The act of buying and selling securely while monitoring short-term market trends and profiting from market volatility is referred to as an active trading strategy. According to most experts, active trading approaches differ from long-term strategies in which investors buy and hold assets. Here are top-4 strategies for you to consider:
Scalping allows many professionals to make quick money. It implies that you keep the coins for a few minutes or seconds to make small profits that add up during the day. The optimal time to execute a trade is when the market is extremely busy, enhancing the possibility of profit. Scalping is a strategy employed by professional cryptocurrency traders and specialists to profit from small price fluctuations.
2. Day Trading
This cryptocurrency trading approach implies keeping assets for a single day. Because traders enter and exit positions on the same day, day trading is also known as "intraday trading." You must explore basic technical analysis in this type of trading, which includes technical indicators to help you comprehend current market conditions and detect patterns. This form of trading also produces tiny gains, but it keeps you out of overnight market volatility. Day trading is frequently restricted to a few hours.
3. Swing Trading
Swing trading is used to keep positions open for several days or weeks. This trading strategy is centered on short- to medium-term trends that last between one to thirty days. This type of trading technique can be used by someone who is not trading actively on a daily basis.
Since you will not be holding the coin for a single day, you don’t need to monitor daily ups and downs. On the contrary, keeping up with the trend and reviewing the analysis daily may help you to maximize your profits.
4. Position Trading
Because traders tend to hold positions for extended periods, position trading is sometimes known as "trend trading." Monitoring weekly and monthly price charts are crucial to evaluate market tendencies. Traders who employ this trading strategy are indifferent about minor price changes and focus on long-term price changes and major price fluctuations.
The risks of crypto trading are high. That’s why you must have a cold-blooded approach regardless of what is happening in the market. Study risk management thoroughly, and never trade more than 50% of the balance at the outset. Don't be bothered about little profits; a small profit is better than a loss.
Coin Shark is not responsible for any content, accuracy, quality, advertising, products or other content posted on the site. The review is for informational purposes only, reflects only the opinion of the author and is not a proposal for action. The financial market is dangerous and full of risks, investments in cryptocurrencies can lead to losses. Users should do their own research before taking any action.