Cryptocurrency trading has recently been attracting attention of more and more people. In this article we will explain how to earn money by trading coins, what are the main strategies for this and find out how much the trader can earn.
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- Basics of cryptocurrency trading
- What are the main strategies?
- How much can you earn on trading coins?
The main law of speculation with any assets is extremely simple: “buy at a cheaper price, sell for a more expensive price.” This is the main task of any trader, but beginners are very often subjected to panic, and do everything the exact opposite. What algorithm of actions should be followed in order to achieve results in this field?
– Choosing a reliable exchange. As practice shows, exchanges can be hacked, they can go bankrupt together with all your money. Of course, no one is protected from such force majeure, but in any case, the larger the cryptocurrency exchange is, the less likely it is to encounter problems.
– Choosing currency pairs. You can trade with cryptocurrencies only, for example BTC/ETH, BTC/XRP, etc., or you can choose any fiat currency and trade it with respect to any coin. Experts advise amateurs to choose the latter, because it will be difficult to predict the fluctuations of two very volatile assets in relation to each other without proper experience. A very important factor to pay attention to is the popularity of the pair being traded. It is necessary to choose only those assets that are in good demand on the market, otherwise, the overwhelming amount of time will be spent on waiting for the buyer. Popular pairs are not subject to big up or down jumps due to large capitalization. Much less effort is required to ramp or crash less popular assets.
– Conducting a regular analysis of the situation on the market and act strictly in accordance with it. The ideal option for a novice trader is to buy an asset at a time when its price falls below the average. If the price has already started to rise a little, but has not passed the average value, you can still jump into this train.
– Constant learning of something new, studying trading tools. Using special software, at times increases the efficiency of trading.
– Timely fixing of profits and transferring coins to third-party wallets. Competent money management and diversification of risks are a pledge of a successful trader, investor and any businessman in general.
It is absolutely worth noting that each experienced trader has his/her own personal trading strategy. But, in general, there are several basic ones, which serve as a base for other, more complex advanced strategies:
You can read more about different strategies in our article.
It is rather difficult to talk about specific figures in such an unstable market. Everything depends on the aggressiveness of the trade, the trader’s experience, his/her deposit, etc. In case of constant reinvestment of capital, you can reach a profit of 100% per month. And if you use margin trading cryptocurrency, that there were cases when people made 50000% in a couple of days. The more you are attuned to risk, the higher your potential commissions may be, but you should remember about the “a bird in the hand is worth than two in the bush.” Adequate calm trading may provide around 20-30% per month.
Cryptocurrency trading is a fairly promising activity that can bring huge profits. However, you should not treat it like a gambling game. You need to very concentrated and strictly adhere to a trading strategy in order to make money in this sphere.
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